Boston, MA 03/12/2014 (wallstreetpr) – Knightsbridge Tankers Ltd (NASDAQ:VLCCF) has announced that in a partnership with Karpasia Shipping Inc.it has agreed to purchase five fuel efficient capesize bulk carrier from Frontline 2012 and one capsize carrier from Karpasia built in 2013. The new carriers are expected to be delivered between May 2014 and September 2014.
Terms of the deal
Knightsbridge Tankers Ltd (NASDAQ:VLCCF) as a result of the agreement, will be required to pay $61 million for each of the capesize new buildings and $55 million for the capesize built in 2013. The whole transaction will cost Knightsbridge a total of $360 million with $186 million being paid in Knightsbridge’s shares at $10 per share. Knightsbridge will pay the remaining $150 million in absorption of new building capex with $24 million being handed in cash.
Knightsbridge has also agreed to offer its 15.5 million shares to Frontline 2012 and another 3.1 million shares to Karpasia. Once the purchase agreement is complete Knightsbridge will raise an additional $30 million in bank debt per vessel. The transaction will see Knightsbridge outstanding shares dropping to 49.1 million shares with the company expecting to have a total of 10 capesizes on the waters as of the end of September.
Knightsbridge Tankers Ltd (NASDAQ:VLCCF) plans to grow its capsize fleet in the current fiscal year as well as its cash flow per share as dry bulk market continues to rise from the economic meltdown of 2008. The company is also planning to acquire more capesize vessels from Frontline 2012 in the near future.
Knightsbridge Rating in the market
Knightsbridge Tankers Ltd (NASDAQ:VLCCF) had its “Overweight” rating reiterated in the market by Morgan Stanley, the firm currently has a share price target of $12 on the company’s stock up from $9.50. The company currently has a 52 week high of $11.54 and a low of $6.10 at the back of a total market capitalization estimated to be worth $342.2 million.
