Star Bulk swallows Excel

Star Bulk has swept up the 34 strong bulker fleet of fellow Oaktree-backed company Excel Maritime Carriers to expand its position as the largest US-listed owner in the dry cargo sector.
Star Bulk chairman, Petros Pappas.

Petros Pappas.

The $634.91m cash plus shares deal, revealed just two months after Star merged with Oceanbulk, will take the fleet of Petros Pappas-led owner to beyond 100 vessels.

Pappas said: “We are excited to announce these vessel purchases that, when completed, will expand our presence as the largest US listed drybulk shipping company, and one of the largest dry bulk owners and operators globally.

“These transactions mark an important next step in the evolution of Star Bulk following our recent merger transaction with Oceanbulk."

Star Bulk will issue 29.917 million shares and pay $288.39m in cash for the six capesizes, 14 kamsarmaxes, 12 panamaxes and two handymax ships in the Excel fleet.

Pappas added: “We believe that these vessel purchases are accretive to earnings and cash flow per share.

“We also believe that after these transactions are completed, Star Bulk will be well positioned to capitalize on an improving dry bulk shipping market with significant operating leverage to rising rates.”

Oaktree and fellow Excel investor Angelo Gordon & Co are offering up a $231m bridging loan to support the deal.

Oaktree stake trimmed

Oaktree, shipping’s largest private equity investor, will see its stake in the enlarged company trimmed to 57.3%. Angelo Gordon Investors will own 7.8% of the Star stock.

"This is consistent with our strategy to be an active consolidator in the dry bulk shipping industry, using moderate levels of debt," Pappas said.

While the expansion of the Star Bulk fleet to 103 vessels and the lifting of its market capitalisation to $1.49bn is impressive, this deal has been mooted for some time.


Pappas took over management of the Excel fleet when Oaktree and former Excel chief executive Gabriel “Villy” Panayotides parted company this summer.

Since that time speculation has centered on if and when Star would take over Excel and Oaktree’s third dry cargo company, Eagle Bulk.

Erik Nikolai Stavseth of Arctic Securities, said: "Oaktree is biggest investor in Star Bulk and was biggest investor in Excel Maritime – this is a clear way of cashing out for Oaktree on these investments – although only partial thus far.

"Given this transaction showing Oaktree’s approach, we would not be surprised to see also Eagle Bulk be acquired by Star Bulk at a later point in time."

Seward & Kissel was Star Bulk’s legal counsel on the deal. Paul, Weiss, Rifkind, Wharton & Garrison worked with Excel and Oaktree, while Willkie, Farr & Gallagher was counsel to the Excel board and Angelo Gordon.

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