On 10/31/2023, Star Bulk Carriers made an announcement regarding another share repurchase deal with Oaktree Capital
In a nutshell, Oaktree Capital appear to be monetizing their SBLK position. It has been a long-term holding and Oaktree Capital are locking most of their gains.
Oaktree Capital are giving up an additional board seat too.
SBLK management have not provided details on how this new share re-purchase will be financed. My guess, a further clean-up of the fleet via a disposal of older dry bulk vessels. As with what occurred during H1 2023 vessel disposals, the selected vessels might not necessarily be the oldest vessels in the fleet. Then again, as this is the first year of the IMO standards, there might have been insights garnered from what has transpired YTD.
Either way, I don’t think I will be adding to my token SBLK position until their management team provide more clarity to the financing details on this second buyback transaction.
11/13
Star Bulk Carriers (SBLK) released their Q3 2023 results after hours.
Various references to the decision to buy back their shares from Oaktree Capital Management. SBLK mgmt indicate the first tranche of 10M shares has already been purchased and retired. SBLK is working on the acquisition of the second 10M shares, and expect to complete the deal by early Dec 2023. Lots of moving pieces - vessel sales, ATM share sales at a higher level, financing, partial financing, etc. already at play.
I do think Star Bulk Carriers has a good management team. However, at this time there are too many things going on at the company for me to feel comfortable having an investment in this name. Four vessels were sold in October and November. Is that it? Or are there more sales to come? A quick parse of the sold vessels identified a 2003 build, a 2006 build, a 2012 build, and a 2015 build (one old, one fairly old, and two relatively new)
The company has also placed a 2 + 2 order, or 2 + option 2 order (with the options exercisable by mid Dec 2023). Probably not a lot of capital involved initially, but still a capex planning element that starts now and lasts through delivery of the last vessel in mid 2026.