Golden Ocean buys back $9.6 million convertibles, deleverages in Q2

By Devika Patel

Knoxville, Tenn., Aug. 17 – Golden Ocean Group Ltd. generated “good” cash flow in the second quarter and was able to deleverage the balance sheet, with plans to continue deleveraging.

The company also took on a $120 million loan facility in the quarter and bought back some of its convertibles.

“With a competitive cash break even level, we are generating good cash flow and have been able to continue our strategy of deleveraging the balance sheet and at the same time returning value to shareholders,” chief executive officer Birgitte Ringstad Vartdal said on the company’s second quarter ended June 30 earnings conference call on Friday.

“Going forward, we aim to find the right balance between returning value to our shareholders and other uses of cash flow, including further deleveraging,” Vartdal said.

The company refinanced 10 vessels with a new $120 million loan facility.

“In May, the company entered into a new $120 million loan facility, refinancing 10 vessels,” chief financial officer Per Heiberg said on the call.

The company also bought back $9.6 million of convertibles in the second quarter.

“In addition, we bought back $9.6 million in nominal value of the convertible bonds maturing in January 2019 and the remainder of the convertible bond is booked as short-term,” Heiberg said.

Adjusted EBITDA was $54 million for the second quarter, compared with $53.3 million for the first quarter and $29.7 million for the second quarter of 2017.

The company had $322 million of cash at the end of the second quarter.

On April 19, Golden Ocean repurchased $400,000 of its 3.07% convertible bonds due 2019 in a market purchase at 97.75.

The company repurchased $1.6 million more of the convertibles in a May 31 market purchase at 98.75.

On June 13, Golden Ocean repurchased $3.6 million more of the convertible bonds at 98.75 in a market purchase.

In market purchases on June 27 and June 28, the company repurchased $600,000 and $3.4 million of the convertibles at 99.

Following these transactions, and a market purchase of $1.4 million of convertibles after the second quarter on July 12 at 99.5, the company has $29.8 million, or 14.9%, of the notes, convertible into 345,748 shares, remaining.

Golden Ocean is a dry bulk shipping company incorporated in Hamilton, Bermuda.

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