GOGL Announces Vessel Divestment and Adjustments to Newbuilding Program

GOGL has announced the sale of a total of 14 of their Capesize vessels.

Golden Ocean Group Limited (GOGL) Monday announced that in light of the currently weak market it is divesting a number of vessels from its Capesize fleet.

GOGL said Ship Finance International Limited (Ship Finance) has acquired eight Capesize vessels for a total of $272 million, or an average of $34 million per ship, that GOGL had ordered in the period from 2009 to 2013 from yards in Korea and China.

The ships will be leased back to a subsidiary under GOGL for a ten year period, at a rate of $17,600 for the first seven years and $14,900 for the last three years.

After the ten year lease period is complete, GOGL says it will have the option to buy back the ships for $112 million.

GOGL said it will also sell four Capesize vessels, currently under construction, to a third party, three of which are then to be chartered back to GOGL for a six month to one year period.

Two other vessles, Channel Alliance and Channel Navigator, were also said to have been sold to an unnamed third party for delivery in June this year.

In addition the company says it “has reached agreements with several of its yards to delay the construction of the newbuilding contracts with about 75 months on aggregate basis.”

"These various initiatives are taken in order to strengthen the cash position and balance sheet of the company in the current weak market," said GOGL.

“Golden Ocean is not abandoning its strategy to be a much needed consolidator within the industry, but is rather positioning itself for interesting opportunities which are expected to be available over the coming months."

In March GOGL merged with Knightsbridge after posting a $135 million loss.