Star Bulk could become largest U.S. dry bulk shipping company

Katie Dale - Author

Nov. 26 2019, Updated 10:44 p.m. ET

Will Star Bulk become largest U.S. dry bulk shipping company?

Star Bulk Carriers Corporation (SBLK), a global shipping company focusing on the transportation of dry bulk cargoes, is en route to becoming the largest U.S. listed dry bulk shipping company. Its peers in the industry include Diana Shipping Inc. (DSX), Knightsbridge Shipping Ltd (VLCCF), Navios Maritime Holdings (NM), and Eagle Bulk Shipping Inc. (EGLE). Star Bulk has been taking more ship deliveries and entering into more chartering contracts. We will discuss this more in detail in our upcoming parts.


Star Bulk acquires modern, fuel-efficient Capesize vessel

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In September, Star Bulk (SBLK) took delivery of M/V Leviathan, a 182,000 dead weight tonnage (or DWT) Capesize built by Japan Marine United (or JMU), one of the leading shipyards worldwide. The vessel is a sister ship to M/V Peloreus, already delivered to the company, and is the second of six similar vessels ordered at JMU with expected deliveries until the third quarter of 2015.

The JMU Capesize vessels are built with modern specifications. JMU anticipates these vessels will have among the lowest fuel consumptions and carbon emissions of vessels of similar size and age.

With a modern design and fuel-efficient specification, the vessel is currently employed in the spot market. Star Bulk (SBLK) has partially financed the $34.63 million final delivery installment for the vessel by using $32.5 million proceeds from the previously committed five-year senior secured credit facility by Deutsche Bank AG, while the remaining amount was financed using cash on hand. The vessel was fitted with additional and higher specification equipment worth approximately $0.54 million, the payment of which is included in the aforementioned final delivery installment.

Star Bulk’s fleet is growing

Following the delivery of M/V Levathian and inclusive of the two Kamsarmax vessels to be delivered from Heron Ventures Ltd., Star Bulk will own 42 dry bulk vessels on the water. These vessels include 12 Capesize, four Post Panamax, seven Kamsarmax, five Panamax, two Ultramax, and ten Supramax vessels with an average age of approximately 8.1 years.

The Guggenheim Shipping exchange-traded fund (or ETF) (SEA) helps investors keep a track of shipping industry dynamics and is a tracker of shipping companies


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