Dry bulk shipowner Pacific Basin has proposed an issuance of new shares in exchange for a reduction in 10 existing time-charter rates, allowing the company to save $12.56m over a 24-month period starting 1 November 2016.

Hong Kong-listed Pacific Basin has entered into 10 separate addenda to 10 existing long term inward time-charter contracts with 10 shipowners, for which the company has agreed to issue some 79.98m shares at HKD1.218 per share in exchange for the reduced charter rates.

The total issue price for the new shares amounts to HKD97.41m, equivalent to $12.56m which is the sum of the reduction in the charter fees.

“The issue of the new shares is to compensate the shipowners for their agreements to reduce the existing daily charter-hire rates payable to the charterer to the shipowners,” Pacific Basin stated.

“This enhances the company’s cash balances and its ability to maintain the group’s balance sheet strength in the protracted weak dry bulk market.” it said.

Pacific Basin detailed that the reduction in charter hire cash payments commencing 1 November this year over a 24-month period would lead to cash savings of $1,049,200, $6,278,000 and $5,228,800 in 2016, 2017 and 2018 respectively, totalling $12,556,000.

The news shares to be alloted and issued represent approximately 2.03% of the existing issued share capital of Pacific Basin, and approximately 1.99% of its enlarged issued share capital as enlarged by such allotment and issue.

Source: seatrade-maritime.com