Registration statement pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934 | |
Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2019 | |
Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |
Shell Company Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered |
N/A | ||
ITEM 1. | ||
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
ITEM 4A. | ||
ITEM 5. | ||
ITEM 6. | ||
ITEM 7. | ||
ITEM 8. | ||
ITEM 9. | ||
ITEM 10. | ||
ITEM 11. | ||
ITEM 12. | ||
ITEM 13. | ||
ITEM 14. | ||
ITEM 15. | ||
ITEM 16. | ||
ITEM 16A. | ||
ITEM 16B. | ||
ITEM 16C. | ||
ITEM 16D. | ||
ITEM 16E. | ||
ITEM 16F. | ||
ITEM 16G. | ||
ITEM 16H. | ||
ITEM 17. | ||
ITEM 18. | ||
ITEM 19. |
• | future operating or financial results and future revenues and expenses; |
• | future, pending or recent acquisitions, business strategy, and other plans and objectives for growth and future operations, areas of possible expansion and expected capital spending or operating expenses; |
• | availability of key employees, crew, length and number of off-hire days, drydocking requirements and fuel and insurance costs; |
• | general market conditions and shipping industry trends, including charter rates, vessel values and factors affecting supply and demand; |
• | competition within our industry; |
• | reputational risks; |
• | our financial condition and liquidity, including our ability to make required payments under our credit facilities, comply with our loan covenants and obtain additional financing in the future to fund capital expenditures, acquisitions and other corporate activities and to comply with the restrictive and other covenants in our financing arrangements; |
• | the strength of world economies and currencies; |
• | general domestic and international political conditions; |
• | the effect of the 2019 Novel Coronavirus (the “2019-nCoV”) on our business and operations and any related remediation measures on our performance and business prospects (including our ability to successfully install sulfur oxide exhaust gas cleaning systems in about half of our fleet); |
• | potential disruption of shipping routes due to accidents or political events; |
• | the overall health and condition of the U.S. and global financial markets, including the value of the U.S. dollar relative to other currencies; |
• | our expectations about availability of vessels to purchase, the time that it may take to construct and deliver new vessels or the useful lives of our vessels; |
• | our continued ability to enter into period time charters with our customers and secure profitable employment for our vessels in the spot market; |
• | vessel breakdowns and instances of off-hire; |
• | our future capital expenditures (including our ability to successfully install ballast water treatment systems in all of our vessels and complete our program for the installation of sulfur oxide exhaust gas cleaning systems in about half of our fleet) and investments in the construction, acquisition and refurbishment of our vessels (including the amount and nature thereof and the timing of completion thereof, the delivery and commencement of operations dates, expected downtime delays, cost overruns and lost revenue); |
• | our ability to realize the expected benefits from sulfur oxide exhaust gas cleaning systems; |
• | availability of financing and refinancing, our level of indebtedness and our need for cash to meet our debt service obligations; |
• | our expectations relating to dividend payments and ability to make such payments; |
• | our ability to leverage our Managers’ relationships and reputation within the drybulk shipping industry to our advantage; |
• | our anticipated general and administrative expenses; |
• | environmental and regulatory conditions, including changes in laws and regulations or actions taken by regulatory authorities; |
• | risks inherent in vessel operation, including terrorism (including cyber terrorism), piracy corruption, militant activities, political instability, terrorism and ethnic unrest in locations where we may operate and discharge of pollutants; |
• | potential liability from pending or future litigation; and |
• | other factors discussed in “Item 3. Key Information—iv. Risk Factors” of this annual report. |
ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE |
ITEM 3. | KEY INFORMATION |
Year Ended December | ||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||
(in thousands of U.S. dollars except share data) | ||||||||||||||||||||
STATEMENT OF OPERATIONS | ||||||||||||||||||||
Revenues | $ | 132,375 | $ | 113,959 | $ | 154,040 | $ | 201,548 | $ | 206,682 | ||||||||||
Commissions | (5,058 | ) | (4,187 | ) | (6,008 | ) | (8,357 | ) | (8,921 | ) | ||||||||||
Net revenues | 127,317 | 109,772 | 148,032 | 193,191 | 197,761 | |||||||||||||||
Voyage expenses | (17,856 | ) | (7,679 | ) | (3,932 | ) | (6,378 | ) | (13,715 | ) | ||||||||||
Vessel operating expenses | (55,469 | ) | (49,519 | ) | (52,794 | ) | (63,512 | ) | (68,569 | ) | ||||||||||
Depreciation | (47,133 | ) | (49,485 | ) | (51,424 | ) | (48,067 | ) | (50,310 | ) | ||||||||||
General and administrative expenses | ||||||||||||||||||||
Management fee to related parties | (10,764 | ) | (11,611 | ) | (13,511 | ) | (16,536 | ) | (18,050 | ) | ||||||||||
Company administration expenses | (3,853 | ) | (3,770 | ) | (2,607 | ) | (2,706 | ) | (2,589 | ) | ||||||||||
Early redelivery cost, net | — | — | (1,263 | ) | (105 | ) | (63 | ) | ||||||||||||
Loss on inventory valuation | (1,432 | ) | — | — | — | — | ||||||||||||||
Other operating income/(cost) | — | 794 | (390 | ) | — | (414 | ) | |||||||||||||
Loss on sale of assets | — | (2,750 | ) | (120 | ) | — | — | |||||||||||||
Impairment loss | (22,826 | ) | (17,163 | ) | (91,293 | ) | — | — | ||||||||||||
Operating (loss)/income | (32,016 | ) | (31,411 | ) | (69,302 | ) | 55,887 | 44,051 | ||||||||||||
Interest expense | (11,650 | ) | (19,576 | ) | (23,224 | ) | (25,713 | ) | (26,815 | ) | ||||||||||
Other finance (costs)/income | (242 | ) | (1,735 | ) | 7,651 | (973 | ) | (714 | ) | |||||||||||
Interest income | 86 | 515 | 799 | 929 | 1,558 | |||||||||||||||
(Loss)/gain on derivatives | (1,676 | ) | (620 | ) | 72 | 18 | (121 | ) | ||||||||||||
Foreign currency gain/(loss) | 347 | (76 | ) | 1,782 | (670 | ) | (76 | ) | ||||||||||||
Amortization and write-off of deferred finance charges | (2,793 | ) | (3,063 | ) | (2,457 | ) | (1,794 | ) | (1,845 | ) | ||||||||||
Net (loss)/income | $ | (47,944 | ) | $ | (55,966 | ) | $ | (84,679 | ) | $ | 27,684 | $ | 16,038 | |||||||
(Loss)/earnings per share of Common Stock, basic and diluted | $ | (0.74 | ) | $ | (0.83 | ) | $ | (0.98 | ) | $ | 0.16 | $ | 0.04 | |||||||
Cash dividends declared per share of Common Stock | $ | 0.04 | $ | — | $ | — | — | — | ||||||||||||
Cash dividends declared per share of Preferred B Shares | $ | 2.00 | $ | 2.00 | $ | 2.00 | $ | 0.62 | $ | — | ||||||||||
Cash dividends declared per share of Preferred C Shares | $ | 2.00 | $ | 2.00 | $ | 2.00 | $ | 2.00 | $ | 2.00 | ||||||||||
Cash dividends declared per share of Preferred D Shares | $ | 2.00 | $ | 2.00 | $ | 2.00 | $ | 2.00 | $ | 2.00 | ||||||||||
Weighted average number of shares of Common Stock outstanding, basic and diluted | 83,479,636 | 84,526,411 | 100,932,876 | 101,604,339 | 101,686,312 |
Year Ended December | ||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||
(in thousands of U.S. dollars) | ||||||||||||||||||||
OTHER FINANCIAL DATA | ||||||||||||||||||||
Net cash provided by operating activities | $ | 25,523 | $ | 13,478 | $ | 50,101 | $ | 85,449 | $ | 58,284 | ||||||||||
Net cash used in investing activities (1) | (125,041 | ) | (39,873 | ) | (39,590 | ) | (63,670 | ) | (36,785 | ) | ||||||||||
Net cash provided by/(used in) financing activities | 180,090 | (83,875 | ) | (47,060 | ) | (15,580 | ) | 8,540 | ||||||||||||
Net increase/(decrease) in cash and cash equivalents and restricted cash (1) | 80,572 | (110,270 | ) | (36,549 | ) | 6,199 | 30,039 |
Year Ended December | |||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||
(in thousands of U.S. dollars) | |||||||||||||||
BALANCE SHEET DATA | |||||||||||||||
Total current assets | 243,162 | 111,008 | 79,086 | 101,262 | 135,989 | ||||||||||
Total fixed assets | 1,056,517 | 1,051,726 | 946,529 | 963,887 | 964,000 | ||||||||||
Other non-current assets | 9,952 | 11,019 | 9,482 | 11,050 | 14,654 | ||||||||||
Total assets | 1,309,631 | 1,173,753 | 1,035,097 | 1,076,199 | 1,114,643 | ||||||||||
Total current liabilities | 105,726 | 23,779 | 36,933 | 54,606 | 86,784 | ||||||||||
Long-term debt, net of current portion and of deferred finance charges | 569,399 | 569,781 | 541,816 | 538,508 | 536,995 | ||||||||||
Total liabilities | 675,485 | 595,217 | 578,749 | 593,367 | 624,701 | ||||||||||
Mezzanine equity | — | — | — | 16,998 | 17,200 | ||||||||||
Common stock, $0.001 par value | 83 | 99 | 102 | 103 | 104 | ||||||||||
Total shareholders’ equity | 634,146 | 578,536 | 456,348 | 465,834 | 472,742 | ||||||||||
Total liabilities and shareholders’ equity | 1,309,631 | 1,173,753 | 1,035,097 | 1,076,199 | 1,114,643 |
• | demand for and production of drybulk products; |
• | global and regional economic and political conditions, including natural or other disasters (including the 2019-nCoV), armed conflicts, terrorist activities and strikes; |
• | environmental and other regulatory developments; |
• | the distance drybulk cargoes are to be moved by sea; |
• | changes in seaborne and other transportation patterns including shifts in transportation demand for drybulk transportation services; |
• | weather and natural disasters; |
• | international sanctions, embargoes, import and export restrictions, nationalizations and wars; and |
• | tariffs on imports and exports that could affect the international trade. |
• | the size of the newbuilding orderbook; |
• | the number of newbuild deliveries, which, among other factors, relates to the ability of shipyards to deliver newbuilds by contracted delivery dates and the ability of purchasers to finance such newbuilds; |
• | the scrapping rate of older vessels, depending, amongst other things, on scrapping rates and international scrapping regulations; |
• | port and canal congestion; |
• | sanctions; |
• | the number of vessels that are in or out of service, including due to vessel casualties; and |
• | changes in environmental and other regulations that may limit the useful lives of vessels. |
• | general economic and market conditions affecting the shipping industry; |
• | prevailing level of charter rates; |
• | distressed asset sales, including newbuild contract sales during weak charter market conditions; |
• | lack of financing and limitations imposed by financial covenants in our credit and loan facilities; |
• | competition from other shipping companies; |
• | configurations, sizes and ages of vessels; |
• | cost of newbuilds; |
• | governmental, environmental or other regulations; and |
• | technological advances. |
• | a failure of the customer to make charter payments because of its financial inability, disagreements with us or otherwise; |
• | the customer’s termination of its charters because of our non-performance, including serious deficiencies with the vessels we provide to that customer or prolonged periods of off-hire; |
• | a prolonged force majeure event that affects the customer may prevent us from performing services for that customer, i.e., damage to or destruction of relevant production facilities and war or political unrest; and |
• | the other reasons discussed in this section. |
• | work stoppages or other hostilities, political or economic disturbances that disrupt the operations of the shipyard; |
• | quality or engineering problems; |
• | bankruptcy or other financial crisis of the shipyard; |
• | a backlog of orders at the shipyard; |
• | disputes between the Company and the shipyard regarding contractual obligations; |
• | weather interference or catastrophic events, such as major earthquakes or fires; |
• | our requests for changes to the original vessel specifications; or |
• | shortages of or delays in the receipt of necessary construction materials, such as steel, or equipment, such as main engines, electricity generators and propellers. |
• | bankruptcy or other financial crisis of the third-party seller; |
• | quality or engineering problems; |
• | disputes between the Company and the third-party seller regarding contractual obligations; or |
• | weather interference or catastrophic events, such as major earthquakes or fires. |
• | pay dividends if an event of default has occurred and is continuing or would occur as a result of the payment of such dividend; |
• | enter into certain long-term charters without the lenders’ consent; |
• | incur additional indebtedness, including through the issuance of guarantees; |
• | change the flag, class or management of the vessel mortgaged under such facility or terminate or materially amend the management agreement relating to such vessel; |
• | create liens on their assets; |
• | make loans; |
• | make investments; |
• | make capital expenditures; |
• | undergo a change in ownership or control or permit a change in ownership and control of our Managers; |
• | sell the vessel mortgaged under such facility; and |
• | permit our chief executive officer to change. |
• | ensure that the market value of the vessel mortgaged under the applicable credit facility, determined in accordance with the terms of that facility, does not fall below 115% or 120%, as the case may be (the “Minimum Value Covenant”); |
• | maintain at all times a minimum cash balance per vessel with the respective lender from $150,000 to $1,000,000 as the case may be; and |
• | ensure that we comply with certain financial covenants under the guarantees described below. |
• | our total consolidated liabilities divided by its total consolidated assets (based on the market value of all vessels owned or leased on a finance lease taking into account their employment, and the book value of all other assets), must not exceed 85% (the “Consolidated Leverage Covenant”); |
• | our total consolidated assets (based on the market value of all vessels owned or leased on a finance lease taking into account their employment, and the book value of all other assets) less its total consolidated liabilities must not be less than $150,000 (the “Net Worth Covenant”); |
• | our ratio of its EBITDA over consolidated interest expense must not be less than 2.0:1, on a trailing 12 months’ basis (the “EBITDA Covenant”); |
• | our consolidated debt in relation to the vessels currently owned by the respective Subsidiaries must not exceed $630,000 (the “Maximum Debt Covenant”); |
• | a minimum of 30% or 35%, as the case may be, of our voting and ownership rights shall remain directly or indirectly beneficially owned by the Hajioannou family for the duration of the relevant credit facilities and in the case of one facility Polys Hajioannou beneficially holds a minimum of 20% of the voting and ownership rights (the “Control Covenant”): and |
• | payment of dividends is subject to no event of default having occurred and be continuing or would occur as a result of the payment of such dividends. |
• | the rates we obtain from our charters as well as the rates obtained upon the expiration of our existing charters; |
• | the level of our operating costs; |
• | the level of our general and administrative costs; |
• | the number of unscheduled off-hire days and the timing of, and number of days required for, scheduled drydocking of our ships; |
• | vessel acquisitions and related financings; |
• | level of indebtedness; |
• | restrictions in our loan and credit facilities and in any future debt facilities; |
• | prevailing global and regional economic and political conditions; |
• | the effect of governmental regulations and maritime self-regulatory organization standards on the conduct of our business; |
• | the amount of cash reserves established by our board of directors; and |
• | restrictions under Marshall Islands and Liberian law. |
• | renew existing charters upon their expiration; |
• | obtain new charters; |
• | successfully interact with shipyards during periods of shipyard construction constraints; |
• | obtain financing on commercially acceptable terms; |
• | maintain satisfactory relationships with our charterers and suppliers; and |
• | successfully execute our business strategies. |
• | limited availability of market quotations for our Common Stock; |
• | a limited amount of news and analyst coverage for us; |
• | a decreased ability for us to issue additional securities or obtain additional financing in the future; |
• | limited liquidity for our shareholders due to thin trading; and |
• | loss of preferential tax rates for dividends received by certain non-corporate United States holders, loss of “mark-to-market” election by United States holders in the event we are treated as a passive foreign investment company (“PFIC”), and loss |
• | authorize our board of directors to issue “blank check” preferred stock without stockholder approval; |
• | provide for a classified board of directors with staggered, three-year terms; |
• | prohibit cumulative voting in the election of directors; |
• | authorize the removal of directors only for cause; |
• | prohibit stockholder action by written consent unless the written consent is signed by all stockholders entitled to vote on the action; |
• | establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings; and |
• | provide that special meetings of our stockholders may only be called by the chairman of our board of directors, chief executive officer or a majority of our board of directors. |
• | changes in our operating cash flow, capital expenditure requirements, working capital requirements and other cash needs; |
• | restrictions under our existing or future credit facilities or any future debt securities, including existing restrictions under our existing credit facilities on our ability to pay dividends if an event of default has occurred and is continuing or if the payment of the dividend would result in an event of default and restrictions on our ability to redeem securities; |
• | the amount of any cash reserves established by our board of directors; and |
• | restrictions under the laws of the Republic of the Marshall Islands, which generally prohibits the payment of dividends other than from surplus (retained earnings and the excess of consideration received for the sale of shares above the par value of the shares) or while a company is insolvent or would be rendered insolvent by the payment of such a dividend. |
ITEM 4. | INFORMATION ON THE COMPANY |
Vessel Name | Dwt | Year Built 1 | Country of Construction | Charter Type | Charter Rate 2 | Commissions 3 | Charter Period 4 | Sister Ship 5 | ||||||||
CURRENT FLEET | ||||||||||||||||
Panamax | ||||||||||||||||
Maria | 76,000 | 2003 | Japan | Period | $9,349 | 5.00% | Feb 2020 - Dec 2020 | A | ||||||||
Koulitsa | 76,900 | 2003 | Japan | Period | $5,986 | 5.00% | Dec 2019 - Apr 2020 | |||||||||
Paraskevi | 74,300 | 2003 | Japan | Spot | $4,500 | 5.00% | Mar 2020 - Apr 2020 | |||||||||
Vassos | 76,000 | 2004 | Japan | Spot | $12,900 | 5.00% | Sep 2019 - Mar 2020 | A | ||||||||
Katerina | 76,000 | 2004 | Japan | Spot | $8,097 | 5.00% | Feb 2020 - Dec 2020 | A | ||||||||
Maritsa | 76,000 | 2005 | Japan | Period | $9,436 | 5.00% | Feb 2020 - Nov 2020 | A | ||||||||
Efrossini | 75,000 | 2012 | Japan | Spot | $5,972 | 3.75% | Jan 2020 - Apr 2020 | B | ||||||||
Zoe 12 | 75,000 | 2013 | Japan | Spot | $7,899 | 5.00% | Jan 2020 - Apr 2020 | B | ||||||||
Kypros Land 12 | 77,100 | 2014 | Japan | Spot | $5,616 | 5.00% | Jan 2020 - Apr 2020 | H | ||||||||
Kypros Sea | 77,100 | 2014 | Japan | Spot | $13,850 | 5.00% | May 2019 - Mar 2020 | H | ||||||||
Kypros Bravery | 78,000 | 2015 | Japan | I | ||||||||||||
Kypros Sky 10 | 77,100 | 2015 | Japan | Spot | $8,926 | 5.00% | Jan 2020 - Mar 2020 | H | ||||||||
Kypros Loyalty | 78,000 | 2015 | Japan | Spot | $6,367 | 5.00% | Feb 2020 - Apr 2020 | I | ||||||||
Kypros Spirit 10 | 78,000 | 2016 | Japan | Spot | $4,044 | 5.00% | Jan 2020 - Apr 2020 | I | ||||||||
Kamsarmax | ||||||||||||||||
Pedhoulas Merchant | 82,300 | 2006 | Japan | Spot | $7,000 | 5.00% | Feb 2020 - Mar 2020 | C | ||||||||
Pedhoulas Trader | 82,300 | 2006 | Japan | Period | $12,000 | 5.00% | May 2019 - Mar 2020 | C | ||||||||
Pedhoulas Leader | 82,300 | 2007 | Japan | Spot | $7,681 | 5.00% | Feb 2020 - Apr 2020 | C | ||||||||
Pedhoulas Commander | 83,700 | 2008 | Japan | Period | $10,850 | 5.00% | Apr 2019 - May 2020 | |||||||||
Pedhoulas Builder | 81,600 | 2012 | China | Spot 14 | $8,321 | 5.00% | Feb 2020 - Apr 2020 | D | ||||||||
Pedhoulas Fighter | 81,600 | 2012 | China | Spot 14 | $9,548 | 5.00% | Jan 2020 - Apr 2020 | D | ||||||||
Pedhoulas Farmer 6 | 81,600 | 2012 | China | Spot 14 | $10,614 | 5.00% | Dec 2019 - Mar 2020 | D |
Vessel Name | Dwt | Year Built 1 | Country of Construction | Charter Type | Charter Rate 2 | Commissions 3 | Charter Period 4 | Sister Ship 5 | ||||||||
Pedhoulas Cherry | 82,000 | 2015 | China | Spot 14 | $10,999 | 5.00% | Jan 2020 - Apr 2020 | K | ||||||||
Pedhoulas Rose 6 | 82,000 | 2017 | China | Spot 14 | $11,529 | 5.00% | Mar 2020 - Jun 2020 | |||||||||
Pedhoulas Cedrus | 82,000 | 2017 | China | Spot 14 | $8,633 | 5.00% | Mar 2020 - Jun 2020 | |||||||||
Post-Panamax | ||||||||||||||||
Marina | 87,000 | 2006 | Japan | Spot 14 | $6,616 | 5.00% | Feb 2020 - Apr 2020 | E | ||||||||
Xenia | 87,000 | 2006 | Japan | Spot 15 | $1,867 | 5.00% | Jan 2020 - Mar 2020 | E | ||||||||
Sophia | 87,000 | 2007 | Japan | Spot 13 | $8,780 | 5.00% | Feb 2020 - Mar 2020 | E | ||||||||
Eleni | 87,000 | 2008 | Japan | Spot 13 | $10,222 | 5.00% | Jan 2020 - Apr 2020 | E | ||||||||
Martine | 87,000 | 2009 | Japan | Spot 14 | $10,710 | 5.00% | Feb 2020 - Mar 2020 | E | ||||||||
Andreas K | 92,000 | 2009 | South Korea | Spot 14 | $6,765 | 5.00% | Feb 2020 - May 2020 | F | ||||||||
Panayiota K 11 | 92,000 | 2010 | South Korea | Spot 14 | $8,743 | 5.00% | Feb 2020 - Mar 2020 | F | ||||||||
Agios Spyridonas 11 | 92,000 | 2010 | South Korea | Spot 14 | $6,901 | 5.00% | Feb 2020 - Apr 2020 | F | ||||||||
Venus Heritage 12 | 95,800 | 2010 | Japan | Spot 14 | $5,951 | 5.00% | Jan 2020 - Mar 2020 | G | ||||||||
Venus History 12 | 95,800 | 2011 | Japan | Spot 14 | $8,681 | 5.00% | Feb 2020 - Apr 2020 | G | ||||||||
Venus Horizon | 95,800 | 2012 | Japan | Spot 14 | $7,166 | 5.00% | Feb 2020 - Apr 2020 | G | ||||||||
Troodos Sun | 85,000 | 2016 | Japan | Spot | $5,193 | 5.00% | Jan 2020 - Mar 2020 | J | ||||||||
Troodos Air | 85,000 | 2016 | Japan | Spot | $5,875 | 5.00% | Feb 2020 - Mar 2020 | J | ||||||||
Capesize | ||||||||||||||||
Mount Troodos | 181,400 | 2009 | Japan | Dry docking 9 | ||||||||||||
Kanaris | 178,100 | 2010 | China | Period 7 | $26,562 | 2.50% | Sep 2011 – Jun 2031 | |||||||||
Pelopidas | 176,000 | 2011 | China | Period | $38,000 | 1.00% | Feb 2012 – Jan 2022 | |||||||||
Lake Despina | 181,400 | 2014 | Japan | Period 8 | $24,376 | 1.25% | Jan 2014 – Jan 2024 | |||||||||
Subtotal | 3,777,000 | |||||||||||||||
NEW BUILD | ||||||||||||||||
Post-Panamax | ||||||||||||||||
1772 TBN | 85,000 | 1H 2020 | Japan | |||||||||||||
Subtotal | 85,000 | |||||||||||||||
TOTAL | 3,862,000 |
(1) | For existing vessels, the year represents the year built. For our newbuild, the date shown reflects the expected delivery dates. |
(2) | Quoted charter rates are the recognized daily gross charter rates. For charter parties with variable rates among periods or consecutive charter parties with the same charterer, the recognized gross daily charter rate represents the weighted average gross daily charter rate over the duration of the applicable charter period or series of charter periods, as applicable. In the case of a charter agreement that provides for additional payments, namely ballast bonus to compensate for vessel repositioning, the gross daily charter rate presented has been adjusted to reflect estimated vessel repositioning expenses. Gross charter rates are inclusive of commissions. Net charter rates are charter rates after the payment of commissions. In the case of voyage charters, the charter rate represents revenue recognized on a pro rata basis over the duration of the voyage from load to discharge port less related voyage expenses. |
(3) | Commissions reflect payments made to third-party brokers or our charterers. |
(4) | The start dates listed reflect either actual start dates or, in the case of contracted charters that had not commenced as of March 13, 2020, the scheduled start dates. Actual start dates and redelivery dates may differ from the referenced scheduled start and redelivery dates depending on the terms of the charter and market conditions and does not reflect the options to extend the period time charter. |
(5) | Each vessel with the same letter is a “sister ship” of each other vessel that has the same letter, and under certain of our charter contracts, may be substituted with its “sister ships.” |
(6) | MV Pedhoulas Farmer and MV Pedhoulas Rose were sold and leased back, in 2015 and 2017, respectively, on a bareboat charter basis for a period of 10 years, with a purchase obligation at the end of the bareboat charter period and purchase options in favor of the Company after the second year of the bareboat charter, at annual intervals and predetermined purchase prices. |
(7) | Charterer agreed to reimburse us for part of the cost of the Scrubbers and BWTS to be installed on the vessel, which is recorded by increasing the recognized daily charter rate by $634 over the remaining tenor of the time charter party. |
(8) | A period time charter of 10 years at a gross daily charter rate of $23,100 for the first two and a half years and of $24,810 for the remaining period. In January 2017, the period time charter was amended to reflect substitution of the initial charterer with its subsidiary guaranteed by the initial charterer and changes in payment terms; all other period charter terms remained unchanged. The charter agreement grants the charterer the option to purchase the vessel at any time beginning at the end of the seventh year of the period time charter period, at a price of $39.0 million less 1.00% commission, decreasing thereafter on a pro-rated basis by $1.5 million per year. The Company holds a right of first refusal to buy back the vessel in the event that the charterer exercises its option to purchase the vessel and subsequently offers to sell such vessel to a third party. The charter agreement also grants the charterer an option to extend the period time charter for an additional twelve months at a time at a gross daily charter rate of $26,330, less 1.25% total commissions, which option may be exercised by the charterer a maximum of two times. |
(10) | MV Kypros Sky and MV Kypros Spirit were sold and leased back in December 2019 on a bareboat charter basis for a period of eight years, with purchase options in favor of the Company commencing three years following the commencement of the bareboat charter period and a purchase obligation at the end of the bareboat charter period, all at predetermined purchase prices. |
• | Annual Surveys. For oceangoing vessels, annual surveys are conducted for their hulls and machinery, including the electrical plants, and for any special equipment classed, at intervals of 12 months from the date of commencement of the class period indicated in the certificate. |
• | Intermediate Surveys. Extended annual surveys are referred to as “intermediate surveys” and typically are conducted on the occasion of the second or third annual survey after commissioning and after each class renewal. |
• | Class Renewal / Special Surveys. Class renewal surveys, also known as “special surveys,” are more extensive than intermediate surveys and are carried out at the end of each five-year period. During the special survey the vessel is thoroughly examined, including thickness-gauging to determine any diminution in the steel structures. Should the thickness be found to be less than class requirements, the classification society would prescribe steel renewals. It may be expensive to have steel renewals pass a special survey if the vessel is aged or experiences excessive wear and tear. A vessel owner has the option of arranging with the classification society for the vessel’s machinery to be on a continuous survey cycle, according to which all machinery would be surveyed within a five-year cycle. At an owner’s application, the surveys required for class renewal may be split according to an agreed schedule to extend over the entire period of class. |
Vessel Name | Drydocking/BWTS/Scrubber(1) | Special Survey(2) | ||
Mount Troodos (3),(4),(5) | March 2020 | December 2019 | ||
Troodos Sun (3),(4),(5) | April 2020 | January 2021 | ||
Troodos Air (3),(4),(5) | April 2020 | March 2021 | ||
Xenia (3),(4),(5) | April 2020 | April 2021 | ||
Kanaris (3),(4),(5) | May 2020 | May 2020 | ||
Kypros Sky (3),(4) | June 2020 | April 2020 | ||
Kypros Bravery (3),(4) | June 2020 | June 2020 | ||
Kypros Loyalty (3),(4) | September 2020 | September 2020 | ||
Venus History (3), (4) | January 2021 | September 2021 | ||
Pedhoulas Merchant (3),(4) | February 2021 | March 2021 | ||
Pedhoulas Trader (3),(4) | March 2021 | May 2021 | ||
Pelopidas (3),(4) | March 2021 | November 2021 | ||
Venus Horizon (3), (4) | March 2021 | February 2022 | ||
Kypros Spirit (3),(4) | April 2021 | July 2021 | ||
Koulitsa(3) | June 2021 | April 2023 | ||
Maria (3) | June 2021 | April 2023 | ||
Vassos (3) | October 2021 | February 2024 | ||
Pedhoulas Leader (3),(4) | November 2021 | February 2022 | ||
Pedhoulas Rose (3) | January 2022 | January 2022 | ||
Pedhoulas Fighter (3), (4) | January 2022 | August 2022 | ||
Efrossini (3),(4) | February 2022 | February 2022 | ||
Pedhoulas Farmer (3), (4) | February 2022 | September 2022 | ||
Pedhoulas Builder (3), (4) | March 2022 | May 2022 | ||
Sophia (3), (4) | March 2022 | June 2022 | ||
Katerina (3) | May 2022 | May 2024 | ||
Eleni (3) | November 2022 | November 2023 | ||
Marina (3) | December 2022 | January 2021 | ||
Lake Despina (3) | December 2022 | January 2024 | ||
Paraskevi (3), (4) | January 2023 | January 2023 | ||
Maritsa (3) | January 2023 | January 2025 | ||
Xenia (3), | April 2023 | April 2021 | ||
Pedhoulas Commander (3) | May 2023 | May 2023 | ||
Pedhoulas Cedrus (3) | June 2023 | June 2023 | ||
Zoe (3) | July 2023 | July 2023 | ||
Andreas K (3) | August 2023 | August 2024 | ||
Pedhoulas Cherry (3) | August 2023 | July 2020 | ||
Panayiota K (3) | October 2023 | April 2020 | ||
Kypros Land (3) | December 2023 | January 2024 | ||
Kypros Sea (3) | January 2024 | March 2024 | ||
Martine (3) | January 2024 | February 2024 | ||
Agios Spyridonas (3) | January 2024 | January 2025 | ||
Venus Heritage (3) | March 2024 | December 2025 |
(2) | Special survey date. |
(3) | Drydocking. |
(4) | BWTS retrofit. |
(5) | Scrubber retrofit. |
• | on-board installation of automatic information systems to enhance vessel-to-vessel and vessel-to-shore communications; |
• | on-board installation of ship security alert systems; |
• | the development of vessel security plans; and |
• | compliance with flag state security certification requirements. |
ITEM 4A. | UNRESOLVED STAFF COMMENTS |
ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
• | Ownership days. We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period. |
• | Available days. We define available days (also referred to as voyage days) as the total number of days in a period during which each vessel in our fleet was in our possession net of off-hire days associated with scheduled maintenance, which includes major repairs, drydockings, vessel upgrades or special or intermediate surveys. Available days are used to measure the number of days in a period during which vessels should be capable of generating revenues. |
• | Operating days. We define operating days as the number of our available days in a period less the aggregate number of days that our vessels are off-hire due to any reason, excluding scheduled maintenance. Operating days are used to measure the aggregate number of days in a period during which vessels actually generate revenues. |
• | Fleet utilization on ownership days. We calculate fleet utilization on ownership days by dividing the number of our operating days during a period by the number of our ownership days during that period.This measure demonstrates the percentage of time in the relevant period our vessels generate revenue. During the three years ended December 31, 2019, our average annual fleet utilization on ownership days rate was approximately 96.24%. |
• | Fleet utilization on available days. We calculate fleet utilization on available days by dividing the number of operating days by the number of our available days during that period. Fleet utilization is used to measure a company’s ability to efficiently find suitable employment for its vessels and minimize the number of days that its vessels are off-hire for reasons such as scheduled repairs, vessel upgrades, drydockings or special surveys. During the three years ended December 31, 2019, our average annual fleet utilization on available days rate was approximately 98.45%. |
• | Time charter equivalent rates. We define time charter equivalent rates (“TCE rates”) as our charter revenues less commissions and voyage expenses during a period divided by the number of our available days during the period. TCE rate is a standard shipping industry performance measure used primarily to compare daily earnings generated by vessels on period time charters and spot time charters with daily earnings generated by vessels on voyage charters, because charter rates for vessels on voyage charters are generally not expressed in per day amounts, while charter rates for vessels on period time charters and spot time charters generally are expressed in such amounts. We use TCE to compare period-to-period changes in our |
Year Ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
(in thousands of U.S. dollars except available days and time charter equivalent rate) | ||||||||||||
Time charter revenues | $ | 154,040 | $ | 201,548 | $ | 206,682 | ||||||
Less commissions | 6,008 | 8,357 | 8,921 | |||||||||
Less voyage expenses | 3,932 | 6,378 | 13,715 | |||||||||
Time charter equivalent revenue | $ | 144,100 | $ | 186,813 | $ | 184,046 | ||||||
Available days | 13,788 | 14,258 | 14,373 | |||||||||
Time charter equivalent rate | $ | 10,451 | $ | 13,102 | $ | 12,805 |
• | Daily vessel operating expenses. We define vessel operating expenses to include the costs for crewing, insurance, lubricants, spare parts, provisions, stores, repairs, maintenance, statutory and classification expense, drydocking, intermediate and special surveys, tonnage taxes and other miscellaneous items. Daily vessel operating expenses are calculated by dividing vessel operating expenses by ownership days for the relevant period. Our ability to control our fixed and variable expenses, including our daily vessel operating expenses, also affects our financial results. In addition, factors beyond our control can cause our vessel operating expenses to increase, including developments relating to market premiums for insurance, cost of lubricants and changes in the value of the U.S. dollar compared to currencies in which certain of our expenses are denominated, such as certain crew wages. |
• | Daily vessel operating expenses excluding drydocking and pre-delivery expenses. We calculate daily vessel operating expenses excluding drydocking and pre-delivery expenses by dividing vessel operating expenses excluding drydocking and pre-delivery expenses for the relevant period by ownership days for such period. This measure assists our management and investors by increasing the comparability of our performance from period to period. Drydocking expenses include costs of shipyard, paints and agent expenses, and pre-delivery expenses include initially supplied spare parts, stores, provisions and other miscellaneous items provided to a newbuild or secondhand acquisition prior to their operation, which costs may vary from period to period. |
• | Daily general and administrative expenses. We define general and administrative expenses to include daily management fees and daily company administration expenses as defined below. Daily vessel general and administrative expenses are calculated by dividing general and administrative expenses by ownership days for the relevant period. |
• | Daily management fees. We define management fees to include the fees payable to our Managers for managing our fleet. Daily management fees are calculated by dividing management fees by ownership days for the relevant period. |
• | Daily company administration expenses. We define company administration expenses to include expenses incurred related to the administration of our company such as legal costs, audit fees, independent directors’ compensation, listing fees to NYSE and other miscellaneous expenses. Daily company administration expenses are calculated by dividing company administration expenses by ownership days for the relevant period. |
Year Ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Ownership days | 13,858 | 14,568 | 14,965 | |||||||||
Available days | 13,788 | 14,258 | 14,373 | |||||||||
Operating days | 13,673 | 14,075 | 14,012 | |||||||||
Fleet utilization on ownership days | 98.67 | % | 96.62 | % | 93.63 | % | ||||||
Fleet utilization on available days | 99.17 | % | 98.72 | % | 97.49 | % | ||||||
TCE rates | $ | 10,451 | $ | 13,102 | $ | 12,805 | ||||||
Daily vessel operating expenses | $ | 3,810 | $ | 4,360 | $ | 4,582 | ||||||
Daily vessel operating expenses excluding drydocking and pre-delivery expenses | $ | 3,731 | $ | 4,141 | $ | 4,257 | ||||||
Daily general and administrative expenses consisting of: | $ | 1,163 | $ | 1,321 | $ | 1,379 | ||||||
(a) Daily management fees | $ | 975 | $ | 1,135 | $ | 1,206 | ||||||
(b) Daily company administration expenses | $ | 188 | $ | 186 | $ | 173 |
• | levels of demand and supply in the drybulk shipping industry; |
• | the age, condition and specifications of our vessels; |
• | the duration of our charters; |
• | our decisions relating to vessel acquisitions and disposals; |
• | the amount of time that we spend positioning our vessels; |
• | the availability of our vessels, which is related to the amount of time that our vessels spend in drydock undergoing repairs and the amount of time required to perform necessary maintenance or upgrade work; and |
• | other factors affecting charter rates for drybulk vessels. |
3-Year | Impairment Charge | 5-Year | Impairment Charge | 15-Year | Impairment Charge | ||||||||||||||||
Historical Average Daily Rates | (in USD million) | Historical Average Daily Rates | (in USD million) | Historical Average Daily Rates | (in USD million) | ||||||||||||||||
Panamax Class Vessels | $ | 11,857 | — | $ | 9,865 | 22.7 | $ | 19,666 | — | ||||||||||||
Kamsarmax Class Vessels | $ | 12,569 | — | $ | 10,457 | — | $ | 20,846 | — | ||||||||||||
Post Panamax Class Vessels | $ | 13,280 | — | $ | 11,049 | 28.2 | $ | 22,026 | — | ||||||||||||
Capesize Class Vessels | $ | 16,166 | — | $ | 13,169 | 33.0 | $ | 34,348 | — | ||||||||||||
Total | — | 83.9 | — |
As of December 31, 2018 | As of December 31, 2019 | |||||||||||||||
Number of vessels | Aggregate Carrying Value | Number of vessels | Aggregate Carrying Value | |||||||||||||
($ US Million) | ($ US Million) | |||||||||||||||
Vessels whose fair market value was below their carrying value | 21 | (1) | 616.6 | 29 | (2) | 778.2 | ||||||||||
Vessels whose carrying value was written down to their estimated fair market value | — | — | — | — | ||||||||||||
Vessels whose fair market value, exceeded their carrying value | 20 | 338.7 | 12 | 166.5 | ||||||||||||
Total | 41 | 955.3 | 41 | 944.7 |
(1) | As of December 31, 2018, the aggregate carrying value of these 21 vessels was $120.6 million more than their fair market value, based on broker quotes. |
(2) | As of December 31, 2019, the aggregate carrying value of these 29 vessels was $153.9 million more than their fair market value, based on broker quotes. |
• | Daily general and administrative expenses which consist of daily management fees and daily company administration expenses, increased by 4.4% to $1,379 during the year ended December 31, 2019, from $1,321 during the year ended December 31, 2018; |
• | Daily management fees increased by 6.3% to $1,206 during the year ended December 31, 2019, from $1,135 during the year ended December 31, 2018; and |
• | Daily company administration expenses decreased by 6.9% to $173 during the year ended December 31, 2019, from $186 during the year ended December 31, 2018. |
• | Daily general and administrative expenses increased by 13.6% at $1,321 during the year ended December 31, 2018, from $1,163 during the year ended December 31, 2017; |
• | Daily management fees which are part of daily general and administrative expenses increased by 16.4% to $1,135 during the year ended December 31, 2018, from $975 during the year ended December 31, 2017; and |
• | Daily company administration expenses, which are part of daily general and administrative expenses, decreased by 1.1% to $186 during the year ended December 31, 2018, from $188 during the year ended December 31, 2017. |
• | pay dividends if an event of default has occurred and is continuing or would occur as a result of the payment of such dividends; |
• | enter into certain long-term charters without the lenders’ consent; |
• | incur additional indebtedness, including through the issuance of guarantees; |
• | change the flag, class or management of the vessel mortgaged under such facility or terminate or materially amend the management agreement relating to such vessel; |
• | create liens on their assets; |
• | make loans; |
• | make investments; |
• | make capital expenditures; |
• | undergo a change in ownership or control or permit a change in ownership and control of our Managers; |
• | sell the vessel mortgaged under such facility; and |
• | permit our chief executive officer to change. |
• | meet the Minimum Value Covenant of 115% or 120%, as the case may be, for credit facilities outstanding; |
• | maintain a minimum cash balance per vessel with the respective lender from $150,000 to $1,000,000 as the case may be; and |
• | ensure that we comply with certain financial covenants under the guarantees described below. |
• | under the Consolidated Leverage Covenant, our total consolidated liabilities divided by our total consolidated assets (based on the market value of all vessels owned or leased on a finance lease taking into account their employment, and the book value of all other assets) must not exceed 85%; |
• | under the Net Worth Covenant, our total consolidated assets (based on the market value of all vessels owned or leased on a finance lease taking into account their employment, and the book value of all other assets) less our total consolidated liabilities must not be less than $150,000,000; |
• | under the EBITDA Covenant, the ratio of our EBITDA over consolidated interest expense must not be less than 2.0:1, on a trailing 12 months’ basis, applicable as of January 1, 2018 onwards; |
• | under the Maximum Debt Covenant, our consolidated debt in relation to the 41 vessels currently owned by the our subsidiaries must not exceed $630,000,000; |
• | under the Control Covenant, a minimum of 30% or 35%, as the case may be, of our shares shall remain directly or indirectly beneficially owned by the Hajioannou family for the duration of the relevant credit facilities and, in the case of one facility, Polys Hajioannou beneficially holds a minimum of 20% of the voting and ownership rights; and |
• | payment of dividends is subject to no event of default having occurred and be continuing or would occur as a result of the payment of such dividends. |
Total | Less than 1 year (2020) | 1-3 years (2021- 2022) | 3-5 years (2023- 2024) | More than 5 years (after January 1, 2025) | ||||||||||||||||
(in thousands of U.S. dollars) | ||||||||||||||||||||
Long-term debt obligations | $ | 605,819 | $ | 65,473 | $ | 179,804 | $ | 267,434 | $ | 93,108 | ||||||||||
Interest payments (1) | 100,077 | 25,360 | 41,441 | 27,145 | 6,131 | |||||||||||||||
Payments to our Managers (2) (3) | 79,107 | 18,433 | 35,576 | 25,098 | — | |||||||||||||||
Newbuild contracts (3) | 22,935 | 22,935 | — | — | — | |||||||||||||||
Scrubbers and BWTS (4) | 5,058 | 2,796 | 2,262 | — | — | |||||||||||||||
Total | 812,996 | 134,997 | 259,083 | 319,677 | 99,239 |
(1) | Amounts shown reflect estimated interest payments we expect to make with respect to our long-term debt obligations. The interest payments reflect an assumed LIBOR-based applicable interest rate of 1.912% (the six-month LIBOR rate as of December 31, 2019), plus the relevant margin of the applicable credit facility. Amount shown do not reflect the interest rate swaps concluded in March 2020. See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Interest Rate Swaps” for more information. |
(2) | Represents the daily ship management fee of €875 per vessel and the annual ship management fee of €3,000,000 prorated to the actual days based on the management fees currently in effect calculated based on the exchange rate of €/US$ as of December 31, 2019. In addition, it includes amounts payable to our Managers under the Management Agreements in respect of the acquisition fee and the supervision fee for Hull No. S 1772 which is described elsewhere herein. |
(3) | Represents outstanding contractual payments under the memorandum of agreement for the acquisition of Hull No. S 1772. It does not include the amounts payable to our Managers for supervision fees and commissions, under such memorandum of agreement, which are included under “Payments to our Managers” on the above table. |
(4) | Amounts shown reflect estimated payments we expect to make with respect to our Scrubbers and BWTS obligations calculated based on the exchange rate of €/US$ as of December 31, 2019, according to contracts with the relevant equipment suppliers. It does not include payments we expect to make to the relevant shipyards. |
ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
Name | Age | Position | ||
Polys Hajioannou | 53 | Chief Executive Officer, Chairman of the Board and Class I Director | ||
Dr. Loukas Barmparis | 57 | President, Secretary and Class II Director | ||
Konstantinos Adamopoulos | 57 | Chief Financial Officer and Class III Director | ||
Ioannis Foteinos | 61 | Chief Operating Officer and Class I Director | ||
Christos Megalou | 60 | Class II Director | ||
Frank Sica | 69 | Class III Director | ||
Ole Wikborg | 64 | Class I Director |
• | a Code of Business Conduct and Ethics for all officers and employees, which incorporates a Code of Ethics for directors and a Code of Conduct for corporate officers; |
• | a Corporate Governance, Nominating and Compensation Committee Charter; and |
• | an Audit Committee Charter. |
• | the appointment, compensation, retention and oversight of independent auditors and approving any non-audit services performed by such auditor; |
• | assisting the board in monitoring the integrity of our financial statements, the independent auditors’ qualifications and independence, the performance of the independent accountants and our internal audit function and our compliance with legal and regulatory requirements; |
• | discussing the annual audited financial and quarterly statements with management and the independent auditors; |
• | discussing earnings press releases, as well as financial information and earnings guidance provided to analysts and rating agencies; |
• | discussing policies with respect to risk assessment and risk management; |
• | meeting separately, and periodically, with management, internal auditors and the independent auditor; |
• | reviewing with the independent auditor any audit problems or difficulties and management’s responses; |
• | setting clear hiring policies for employees or former employees of the independent auditors; |
• | annually reviewing the adequacy of the audit committee’s written charter, the internal audit charter, the scope of the annual internal audit plan and the results of internal audits; |
• | reporting regularly to the full board of directors; and |
• | handling such other matters that are specifically delegated to the audit committee by the board of directors from time to time. |
• | nominating candidates, consistent with criteria approved by the full board of directors, for the approval of the full board of directors to fill board vacancies as and when they arise, as well as putting in place plans for succession, in particular, of the chairman of the board of directors and executive officers; |
• | selecting, or recommending that the full board of directors select, the director nominees for the next annual meeting of shareholders; |
• | developing and recommending to the full board of directors corporate governance guidelines applicable to us and keeping such guidelines under review; |
• | overseeing the evaluation of the board and management; |
• | reviewing regularly the board structure, size and composition, taking into account the importance of a diverse composite mix of ethnicities, ages, gender, race, geographic locations, education and professional skills, backgrounds and experience, among other characteristics; |
• | maintaining a commitment to supporting, valuing and leveraging diversity in the composition of the Board among other qualities that the board believes serve the best interest of the Company and its stockholders; and |
• | handling such other matters that are specifically delegated to the corporate governance, nominating and compensation committee by the board of directors from time to time. |
ITEM 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
Identity of Person or Group | Number of Shares of Common Stock Owned | Percentage of Common Stock | Number of Shares of Series C Preferred Shares | Percentage of Series C Preferred Shares | Number of Shares of Series D Preferred Shares | Percentage of Series D Preferred Shares | |||||||||||||||||||||
5% Beneficial Owners: | |||||||||||||||||||||||||||
Vorini Holdings Inc.(1) | 19,426,015 | 19.00 | % | — | — | % | — | — | % | ||||||||||||||||||
Bellapais Maritime Inc.(2) | 5,000,000 | 4.89 | % | — | — | % | — | — | % | ||||||||||||||||||
Kyperounta Maritime Inc.(2) | 5,000,000 | 4.89 | % | — | — | % | — | — | % | ||||||||||||||||||
Lefkoniko Maritime Inc.(2) | 5,000,000 | 4.89 | % | — | — | % | — | — | % | ||||||||||||||||||
Akamas Maritime Inc.(2) | 8,555,412 | 8.37 | % | — | — | % | — | — | % | ||||||||||||||||||
Chalkoessa Maritime Inc.(2) | 5,400,000 | 5.28 | % | — | — | % | — | — | % | ||||||||||||||||||
Nicolaos Hadjioannou(3) | 21,426,015 | 20.95 | % | — | — | % | — | — | % | ||||||||||||||||||
Officers and Directors: | |||||||||||||||||||||||||||
Polys Hajioannou (4) | 48,381,427 | 47.31 | % | — | — | % | 100,000 | 3.13 | % | ||||||||||||||||||
Dr. Loukas Barmparis | * | * | * | * | * | ||||||||||||||||||||||
Konstantinos Adamopoulos | * | * | * | * | * | ||||||||||||||||||||||
Ioannis Foteinos | * | * | * | * | * | ||||||||||||||||||||||
Frank Sica | *(5) | * | * | * | * | ||||||||||||||||||||||
Ole Wikborg | * | * | — | — | % | — | — | % | |||||||||||||||||||
Christos Megalou | * | * | — | — | % | — | — | % | |||||||||||||||||||
All executive officers and directors as a group (7 persons) | 48,868,880 | 47.79 | % | 25,000 | 1.09 | % | 137,000 | 4.28 | % |
(4) | By virtue of shares owned indirectly through Vorini Holdings, Inc., Bellapais Maritime Inc., Kyperounta Maritime Inc., Lefkoniko Maritime Inc., Akamas Maritime Inc., Chalkoessa Maritime Inc. and other entities he controls. |
· | interest, principal and other financial costs; |
· | voyage expenses; |
· | vessel operating expenses including crewing costs, surveyor’s attendance fees, bunkers, lubricant oils, spares, survey fees, classification society fees, maintenance and repair costs, tonnage taxes and vetting expenses; |
· | commissions, remuneration or disbursements due to lawyers, brokers, agents, surveyors, consultants, financial advisors, investment bankers, insurance advisors; |
· | deductibles, insurance premiums and/or P&I calls; and |
· | postage, communication, traveling, victualing and other out of pocket expenses. |
· | an aggregate amount in excess of $100,000 payable by us is not paid when due or if due on demand, within 20 business days following demand by the Manager; |
· | we default in the performance of any other material obligation under the Management Agreement and the matter is unresolved within 20 business days after we receive written notice of such default from the Manager; |
· | the management fee determined by arbitration in respect of any three-year period following the initial term is unsatisfactory to the Manager, in which case the Manager may terminate the Management Agreement effective at the end of such term; |
· | any acquisition of our shares or a merger, consolidation or similar transaction results in any “person” or “group” acquiring 40.0% or more of the total voting power of our or the resulting entity’s outstanding voting securities, and such percentage represents a higher percentage of such voting power than that held directly or indirectly by Polys Hajioannou; |
· | the approval by our shareholders of a proposed merger, consolidation, recapitalization or similar transaction, as a result of which any person acquiring our shares of Common Stock becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 40.0% or more of the total voting power of the outstanding voting securities of the resulting entity following such transaction, and such percentage represents a higher percentage of such voting power than that held directly or indirectly by Polys Hajioannou; or |
· | there is a change in directors after which at least one of the members of our board of directors is not a continuing director. |
· | a member of our board of directors on May 29, 2018; or |
· | the Manager commits a willful and material breach in the performance of any material obligation under our Management Agreement and the matter is not resolved within 40 business days after the Manager receives from us written notice of such default; |
· | an aggregate amount in excess of $100,000 payable by the Manager to us or third parties under our Management Agreement is not paid or accounted for within 10 business days following written notice by us; or |
· | any time after May 29, 2024, upon our delivery of 12 months’ written notice to the Manager (a “Third Term Termination Notice”). |
ITEM 8. | FINANCIAL INFORMATION |
ITEM 9. | THE OFFER AND LISTING |
ITEM 10. | ADDITIONAL INFORMATION |
• | the designation of the series; |
• | the number of shares of the series; |
• | the preferences and relative, participating, option or other special rights, if any, and any qualifications, limitations or restrictions of such series; and |
• | the voting rights, if any, of the holders of the series. |
(i) | 10 days following the first public announcement that a person or group of affiliated or associated persons or an “acquiring person” has acquired or obtained the right to acquire beneficial ownership of 15.0% or more of our outstanding Common Stock; or |
(ii) | 10 business days following the start of a tender or exchange offer that would result, if closed, in a person becoming an “acquiring person.” |
• | our Common Stock certificates will evidence the rights, and the rights will be transferable only with those certificates; and |
• | any new shares of Common Stock will be issued with rights, and new certificates will contain a notation incorporating the rights agreement by reference. |
• | we are acquired in a merger or other business combination transaction; or |
• | 50.0% or more of our assets, cash flows or earning power is sold or transferred. |
• | any person other than our existing stockholder becoming the beneficial owner of Common Stock with voting power equal to 50.0% or more of the total voting power of all shares of Common Stock entitled to vote in the election of directors; or |
• | the occurrence of a flip-over event. |
• | to cure any ambiguity, omission, defect or inconsistency; |
• | to make changes that do not adversely affect the interests of holders of rights, excluding the interests of any acquiring person; or |
• | to shorten or lengthen any time period under the rights agreement, except that we cannot change the time period when rights may be redeemed or lengthen any time period, unless such lengthening protects, enhances or clarifies the benefits of holders of rights other than an acquiring person. |
• | At any time when no rights are outstanding, we may amend any of the provisions of the rights agreement, other than decreasing the redemption price. |
ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Year | Amount | ||||
2020 | $ | 5.4 | million | ||
2021 | 4.6 | million | |||
2022 | 3.8 | million | |||
2023 | 2.8 | million | |||
2024 | 2.1 | million |
ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
ITEM 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
ITEM 15. | CONTROLS AND PROCEDURES |
ITEM 16. | [RESERVED] |
ITEM 16A. | AUDIT COMMITTEE FINANCIAL EXPERT |
ITEM 16B. | CODE OF ETHICS |
ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
2018 | 2019 | |||||||
(in thousands) | ||||||||
Audit fees | $ | 330 | $ | 320 | ||||
All other fees | — | 13 | ||||||
Total fees | $ | 330 | $ | 333 |
ITEM 16D. | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
ITEM 16E. | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
Period | Total Number of Shares of Common Stock Purchased(a) | Average Price Paid per Share of Common Stock | Total Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs | |||||
December 2018 | 345,012 | 1.76 | 345,012 | |||||
January 2019 | 921,957 | 1.87 | 921,957 | |||||
February 2019 | 410,225 | 1.60 | 410,225 | |||||
Total | 1,677,194 | 1.78 | 1,677,194 |
Period | Total Number of Shares of Common Stock Purchased(a) | Average Price Paid per Share of Common Stock | Total Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs | ||||||
June 2019 | 1,361 | 1.45 | 1,361 | ||||||
November 2019 | 845,022 | 1.69 | 845,022 | ||||||
December 2019 | 155,913 | 1.74 | 155,913 | ||||||
January 2020 | 69,788 | 1.39 | 69,788 | ||||||
February 2020 | 1,017,724 | 1.33 | 1,017,724 | ||||||
March 2020 | 917,004 | 1.28 | 917,004 | ||||||
Total | 3,006,812 | 1.44 | 3,006,812 |
ITEM 16F. | CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT |
ITEM 16G. | CORPORATE GOVERNANCE |
ITEM 16H. | MINE SAFETY DISCLOSURE |
ITEM 17. | FINANCIAL STATEMENTS |
ITEM 18. | FINANCIAL STATEMENTS |
ITEM 19. | EXHIBITS |
Exhibit | Description | ||
First Amended and Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.1 on the Company’s Registration Statement on Form F-1 (Reg. No. 333-150995)) | |||
Articles of Amendment of First Amended and Restated Articles of Incorporation (Incorporated by reference to Exhibit 99.1 on the Company’s Form 6-K, filed on October 8, 2009) | |||
First Amended and Restated Bylaws (Incorporated by reference to Exhibit 3.2 on the Company’s Registration Statement on Form F-1 (Reg. No. 333-150995)) | |||
Form of Registration Rights Agreement between Safe Bulkers, Inc. and Vorini Holdings Inc. (Incorporated by reference to Exhibit 4.2 on the Company’s Registration Statement on Form F-1 (Reg. No. 333-150995)) | |||
Stockholder Rights Agreement (Incorporated by reference to Exhibit 10.5 on the Company’s Registration Statement on Form F-1 (Reg. No. 333-150995)) | |||
Specimen Share Certificate (Incorporated by reference to Exhibit 4.1 on the Company’s Registration Statement on Form F-1 (Reg. No. 333-150995)) | |||
Statement of Designation of the 8.00% Series C Cumulative Redeemable Perpetual Preferred Shares (Par Value $0.01 Per Share) (Incorporated by reference to Exhibit 3.4 on the Company’s Form 8-A12B filed on May 7, 2014) | |||
Statement of Designation of the 8.00% Series D Cumulative Redeemable Perpetual Preferred Shares (Par Value $0.01 Per Share) (Incorporated by reference to Exhibit 3.4 on the Company’s Form 8-A12B filed on June 30, 2014) | |||
Description of Securities | |||
Management Agreement, dated May 29, 2018, between Safety Management Overseas S.A. and Safe Bulkers, Inc. | |||
Management Agreement, dated May 29, 2018, between Safe Bulkers Management Limited and Safe Bulkers, Inc. | |||
Second Amended and Restated Restrictive Covenant Agreement, dated August 2, 2017, among Safe Bulkers, Inc., Polys Hajioannou, Vorini Holdings Inc. and Machairiotissa Holdings Inc. (Incorporated by reference to Exhibit 4.3 on the Company’s Form 20-F, filed on March 2, 2018) | |||
Second Amended and Restated Restrictive Covenant Agreement, dated August 2, 2017, between Safe Bulkers, Inc. and Polys Hajioannou (Incorporated by reference to Exhibit 4.4 on the Company’s Form 20-F, filed on March 2, 2018) | |||
Amended and Restated Loan Agreement, dated October 3, 2018, by and among Safe Bulkers, Inc., DNB Bank ASA, as Mandated Lead Arranger, DNB Bank ASA, as Agent, DNB Bank ASA, as Swap Provider, and DNB Bank ASA, as Security Agent | |||
Amended and Restated Loan Agreement, dated March 28, 2019, by and among Safe Bulkers, Inc., DNB Bank ASA, as Mandated Lead Arranger, DNB Bank ASA, as Agent, DNB Bank ASA, as Swap Provider, and DNB Bank ASA, as Security Agent | |||
List of Subsidiaries | |||
Certification of principal executive officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended | |||
Certification of principal financial officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended | |||
Certification of principal executive officer pursuant to 18 U.S.C. Section 1350 as added by Section 906 of the Sarbanes-Oxley Act of 2002 | |||
Certification of principal financial officer pursuant to 18 U.S.C. Section 1350 as added by Section 906 of the Sarbanes-Oxley Act of 2002 | |||
Consent of Deloitte Certified Public Accountants S.A. | |||
101 | The following materials from the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2019, formatted in lnline eXtensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets as of December 31, 2018 and 2019; (ii) Consolidated Statements of Operations for the years ended December 31, 2017, 2018 and 2019; (iii) Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2017, 2018 and 2019; (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2018 and 2019; and (v) Notes to Consolidated Financial Statements |
By: | /s/ KONSTANTINOS ADAMOPOULOS | |
Name: Konstantinos Adamopoulos | ||
Title: Chief Financial Officer and Director |
December 31, | ||||||||||
Notes | 2018 | 2019 | ||||||||
ASSETS | ||||||||||
CURRENT ASSETS: | ||||||||||
Cash and cash equivalents | $ | $ | ||||||||
Time deposits | ||||||||||
Accounts receivable | ||||||||||
Due from Manager | 3 | |||||||||
Inventories | ||||||||||
Accrued revenue | 16 | |||||||||
Restricted cash | ||||||||||
Prepaid expenses and other current assets | ||||||||||
Total current assets | ||||||||||
FIXED ASSETS: | ||||||||||
Vessels, net | 4 | |||||||||
Advances for vessels | 5 | |||||||||
Total fixed assets | ||||||||||
OTHER NON CURRENT ASSETS: | ||||||||||
Deferred financing costs | ||||||||||
Restricted cash | ||||||||||
Accrued revenue | 16 | |||||||||
Other non current assets | ||||||||||
Total assets | ||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
CURRENT LIABILITIES: | ||||||||||
Current portion of long-term debt, net | 6 | |||||||||
Unearned revenue | 16 | |||||||||
Trade accounts payable | ||||||||||
Accrued liabilities | 13 | |||||||||
Derivative liabilities | 12 | |||||||||
Due to Manager | ||||||||||
Total current liabilities | ||||||||||
Long-term debt, net | 6 | |||||||||
Unearned revenue Long-term | 16 | |||||||||
Other liabilities | ||||||||||
Total liabilities | ||||||||||
COMMITMENTS AND CONTINGENCIES | 9 | |||||||||
MEZZANINE EQUITY - Redeemable non-controlling interest | 8 | |||||||||
SHAREHOLDERS’ EQUITY: | ||||||||||
Common stock, $0.001 par value; 200,000,000 authorized, 103,005,748 and 104,251,019 issued and outstanding at December 31, 2018 and 2019, respectively | 7 | |||||||||
Preferred stock, $0.01 par value; 20,000,000 authorized, 2,300,000 and 2,300,000 Series C Preferred Shares, 3,200,000 and 3,200,000 Series D Preferred Shares, issued and outstanding at December 31, 2018 and 2019, respectively | 7 | |||||||||
Treasury stock, $0.001 par value; 458,088 and 0 Common Shares repurchased at December 31, 2018 and December 31, 2019, respectively | 7 | ( | ) | |||||||
Additional paid in capital | ||||||||||
Retained earnings | ||||||||||
Total shareholders’ equity | ||||||||||
Total liabilities, mezzanine equity and shareholders’ equity | $ | $ |
Years Ended December 31, | ||||||||||||||
Notes | 2017 | 2018 | 2019 | |||||||||||
REVENUES: | ||||||||||||||
Revenues | 10 | $ | $ | $ | ||||||||||
Commissions | ( | ) | ( | ) | ( | ) | ||||||||
Net revenues | ||||||||||||||
EXPENSES: | ||||||||||||||
Voyage expenses | ( | ) | ( | ) | ( | ) | ||||||||
Vessel operating expenses | 11 | ( | ) | ( | ) | ( | ) | |||||||
Depreciation | 4 | ( | ) | ( | ) | ( | ) | |||||||
General and administrative expenses | ||||||||||||||
- Management fee to related parties | 3,15 | ( | ) | ( | ) | ( | ) | |||||||
- Company administration expenses | 15 | ( | ) | ( | ) | ( | ) | |||||||
Early redelivery cost, net | ( | ) | ( | ) | ( | ) | ||||||||
Other operating expense | ( | ) | ( | ) | ||||||||||
Loss on sale of assets | 17 | ( | ) | |||||||||||
Impairment loss | 12 | ( | ) | |||||||||||
Operating (loss)/income | ( | ) | ||||||||||||
OTHER (EXPENSE)/INCOME: | ||||||||||||||
Interest expense | 6 | ( | ) | ( | ) | ( | ) | |||||||
Other finance income/(cost) | ( | ) | ( | ) | ||||||||||
Interest income | ||||||||||||||
Gain/(loss) on derivatives | 12 | ( | ) | |||||||||||
Foreign currency gain/(loss) | ( | ) | ( | ) | ||||||||||
Amortization and write-off of deferred finance charges | ( | ) | ( | ) | ( | ) | ||||||||
Net (loss)/income | ( | ) | ||||||||||||
Less preferred dividend | ||||||||||||||
Less preferred deemed dividend | ||||||||||||||
Net (loss)/income available to common shareholders | $ | ( | ) | $ | $ | |||||||||
(Loss)/earnings per share in U.S. Dollars, basic and diluted | 19 | $ | ( | ) | $ | $ | ||||||||
Weighted average number of shares, basic and diluted |
Common Stock | Treasury Stock | Preferred Stock | Additional Paid in Capital | Retained Earnings | Total | |||||||||||||||||||
Balance as of January 1, 2017 | $ | $ | ( | ) | $ | $ | $ | $ | ||||||||||||||||
Net loss | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Repurchase and cancellation of preferred stock | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||
Tender offer-redemption of preferred stock | — | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||
Share based compensation | — | — | — | — | ||||||||||||||||||||
Preferred share dividends declared | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Balance as of December 31, 2017 | $ | $ | ( | ) | $ | $ | $ | $ | ||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||
Issuance of common stock | — | — | — | |||||||||||||||||||||
Repurchase of common stock | — | ( | ) | — | — | — | ( | ) | ||||||||||||||||
Repurchase and cancellation of preferred stock | — | — | ( | ) | ( | ) | — | ( | ) | |||||||||||||||
Share based compensation | — | — | — | — | ||||||||||||||||||||
Preferred share dividends declared | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Balance at December 31, 2018 | $ | $ | ( | ) | $ | $ | $ | $ | ||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||
Issuance of common stock | — | — | — | |||||||||||||||||||||
Repurchase and cancellation of common stock | ( | ) | — | — | ( | ) | — | ( | ) | |||||||||||||||
Cancellation of common treasury stock | ( | ) | — | ( | ) | — | ||||||||||||||||||
Share based compensation | — | — | — | — | ||||||||||||||||||||
Mezzanine equity measurement | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Preferred share dividends declared | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | $ | $ |
December 31, | |||||||||
2017 | 2018 | 2019 | |||||||
Cash Flows from Operating Activities: | |||||||||
Net (loss)/income | ( | ) | |||||||
Adjustments to reconcile (net loss)/income to net cash provided by operating activities: | |||||||||
Depreciation | |||||||||
Loss on sale of assets | |||||||||
Impairment loss | |||||||||
Gain on debt extinguishment | ( | ) | |||||||
Other non cash items | |||||||||
Amortization and write-off of deferred finance charges | |||||||||
Unrealized (gain)/loss on derivatives | ( | ) | |||||||
Unrealized foreign exchange (gain)/loss | ( | ) | ( | ) | |||||
Share based compensation | |||||||||
Change in: | |||||||||
Accounts receivable | ( | ) | ( | ) | ( | ) | |||
Due from Manager | ( | ) | |||||||
Inventories | ( | ) | |||||||
Accrued revenue | ( | ) | |||||||
Prepaid expenses and other current assets | ( | ) | ( | ) | |||||
Due to Manager | ( | ) | |||||||
Trade accounts payable | ( | ) | |||||||
Accrued liabilities | ( | ) | ( | ) | |||||
Other liabilities | |||||||||
Unearned revenue | ( | ) | |||||||
Net Cash Provided by Operating Activities | |||||||||
Cash Flows from Investing Activities: | |||||||||
Vessel advances | ( | ) | ( | ) | ( | ) | |||
Proceeds from sale of assets | |||||||||
Increase in bank time deposits | ( | ) | ( | ) | ( | ) | |||
Maturity of bank time deposits | |||||||||
Net Cash Used in Investing Activities | ( | ) | ( | ) | ( | ) | |||
Cash Flows from Financing Activities: | |||||||||
Proceeds from long-term debt | |||||||||
Principal payments of long-term debt | ( | ) | ( | ) | ( | ) | |||
Dividends paid | ( | ) | ( | ) | ( | ) | |||
Payment of deferred financing costs | ( | ) | ( | ) | ( | ) | |||
Payment of common stock offering expenses | ( | ) | ( | ) | |||||
Repurchase of common stock | ( | ) | ( | ) | |||||
Repurchase of preferred stock | ( | ) | ( | ) | |||||
Tender offer-redemption of preferred stock | ( | ) | |||||||
Payment of tender offer expenses | ( | ) | |||||||
Net Cash (Used in)/Provided by Financing Activities | ( | ) | ( | ) | |||||
Net (decrease)/increase in cash, cash equivalents and restricted cash | ( | ) | |||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ) | |||||||
Cash, cash equivalents and restricted cash at beginning of year | |||||||||
Cash, cash equivalents and restricted cash at end of year | |||||||||
Supplemental cash flow information: | |||||||||
Cash paid for interest (excluding capitalized interest): |
Non Cash Investing and Financing Activities: | |||||||||
Unpaid financing fees | |||||||||
Part payment of vessel advances through issuance of common stock and preferred stock | |||||||||
Unpaid dividend on preferred stock | |||||||||
Unpaid capital expenditure | |||||||||
Reconciliation of Cash, Cash Equivalents and Restricted Cash: | |||||||||
Cash and cash equivalents | |||||||||
Restricted cash – Current assets | |||||||||
Restricted cash – Non current assets | |||||||||
Cash, cash equivalents and restricted cash shown in the statement of cash flows |
1. | Basis of Presentation and General Information |
Subsidiary | Vessel Name | Type | Built | |||
Maxeikosiepta Shipping Corporation (“Maxeikosiepta”)(1) | Paraskevi | Panamax | January 2003 | |||
Marindou Shipping Corporation (“Marindou”)(1) | Maria | Panamax | April 2003 | |||
Maxeikosiexi Shipping Corporation (“Maxeikosiexi”)(1) | Koulitsa | Panamax | April 2003 | |||
Avstes Shipping Corporation (“Avstes”)(1) | Vassos | Panamax | February 2004 | |||
Kerasies Shipping Corporation (“Kerasies”)(1) | Katerina | Panamax | May 2004 | |||
Marathassa Shipping Corporation (“Marathassa”)(1) | Maritsa | Panamax | January 2005 | |||
Maxeikositessera Shipping Corporation (“Maxeikositessera”)(2) | Efrossini | Panamax | February 2012 | |||
Glovertwo Shipping Corporation (“Glovertwo”)(2) | Zoe | Panamax | July 2013 | |||
Shikokutessera Shipping Inc. (“Shikokutessera”)(2) | Kypros Land | Panamax | January 2014 | |||
Shikokupente Shipping Inc. (“Shikokupente”)(2) | Kypros Sea | Panamax | March 2014 | |||
Gloverfour Shipping Corporation (“Gloverfour”)(2) | Kypros Bravery | Panamax | January 2015 | |||
Shikokuokto Shipping Corporation. (“Shikokuokto”)(2) | Kypros Sky | Panamax | March 2015 |
Subsidiary | Vessel Name | Type | Built | |||
Gloverfive Shipping Corporation (“Gloverfive”)(2) | Kypros Loyalty | Panamax | June 2015 | |||
Gloversix Shipping Corporation (“Gloversix”)(2) | Kypros Spirit | Panamax | July 2016 | |||
Pemer Shipping Ltd. (“Pemer”)(1) | Pedhoulas Merchant | Kamsarmax | March 2006 | |||
Petra Shipping Ltd. (“Petra”)(1) | Pedhoulas Trader | Kamsarmax | May 2006 | |||
Pelea Shipping Ltd. (“Pelea”)(1) | Pedhoulas Leader | Kamsarmax | March 2007 | |||
Vassone Shipping Corporation (“Vassone”)(2) | Pedhoulas Commander | Kamsarmax | May 2008 | |||
Maxeikosi Shipping Corporation (“Maxeikosi”)(1) | Pedhoulas Builder | Kamsarmax | May 2012 | |||
Maxeikositria Shipping Corporation (“Maxeikositria”)(1) | Pedhoulas Fighter | Kamsarmax | August 2012 | |||
Maxeikosiena Shipping Corporation (“Maxeikosiena”)(1) | Pedhoulas Farmer | Kamsarmax | September 2012 | |||
Youngone Shipping Corporation (“Youngone”)(2) | Pedhoulas Cherry | Kamsarmax | July 2015 | |||
Youngtwo Shipping Corporation (“Youngtwo”)(2) | Pedhoulas Rose | Kamsarmax | January 2017 | |||
Pinewood Shipping Corporation (“Pinewood”)(2)(3) | Pedhoulas Cedrus | Kamsarmax | June 2018 | |||
Marinouki Shipping Corporation (“Marinouki”)(1) | Marina | Post-Panamax | January 2006 | |||
Soffive Shipping Corporation (“Soffive”)(1) | Sophia | Post-Panamax | June 2007 | |||
Vasstwo Shipping Corporation (“Vasstwo”)(1) | Xenia | Post-Panamax | August 2006 | |||
Eniaprohi Shipping Corporation (“Eniaprohi”)(1) | Eleni | Post-Panamax | November 2008 | |||
Eniadefhi Shipping Corporation (“Eniadefhi”)(1) | Martine | Post-Panamax | February 2009 | |||
Maxdodeka Shipping Corporation (“Maxdodeka”)(1) | Andreas K | Post-Panamax | September 2009 | |||
Pentakomo Shipping Corporation (“Pentakomo”)(2) | Agios Spyridonas | Post-Panamax | January 2010 | |||
Maxdekatria Shipping Corporation (“Maxdekatria”)(1) | Panayiota K | Post-Panamax | April 2010 | |||
Maxdeka Shipping Corporation (“Maxdeka”)(2) | Venus Heritage | Post-Panamax | December 2010 | |||
Shikoku Friendship Shipping Company (“Shikoku”)(2) | Venus History | Post-Panamax | September 2011 | |||
Maxenteka Shipping Corporation (“Maxenteka”)(2) | Venus Horizon | Post-Panamax | February 2012 | |||
Shikokuepta Shipping Inc. (“Shikokuepta”)(2) | Troodos Sun | Post-Panamax | January 2016 | |||
Shikokuexi Shipping Inc. (“Shikokuexi”)(2) | Troodos Air | Post-Panamax | March 2016 | |||
Maxpente Shipping Corporation (“Maxpente”)(1) | Kanaris | Capesize | March 2010 | |||
Eptaprohi Shipping Corporation (“Eptaprohi”)(1) | Pelopidas | Capesize | November 2011 | |||
Maxtessera Shipping Corporation (“Maxtessera”)(2) | Lake Despina | Capesize | January 2014 | |||
Shikokuennia Shipping Corporation (“Shikokuennia”)(2) | Mount Troodos | Capesize | November 2009 | |||
Monagrouli Shipping Corporation (“Monagrouli”)(2)(5) | TBN - S 1772 | Post-Panamax | April 2020 | |||
Gloverthree Shipping Corporation (“Gloverthree”)(2) | — | — | — | |||
Staloudi Shipping Corporation (“Staloudi”)(1) | — | — | — | |||
Gloverseven Shipping Corporation (“Gloverseven”)(2) | — | — | — | |||
Kyotofriendo One Shipping Inc. (“Kyotofriendo One”)(2)(4) | — | — | — | |||
Kyotofriendo Two Shipping Inc. (“Kyotofriendo Two”)(2)(3) | — | — | — | |||
Maxeikosipente Shipping Corporation (“Maxeikosipente”)(1) | — | — | — |
(1) | Incorporated under the laws of the Republic of Liberia. |
(2) | Incorporated under the laws of the Republic of the Marshall Islands. |
(3) | On July 29, 2016, the Shipsales Contract relating to Hull No. 1552, initially contracted by Kyotofriendo Two, was novated to Pinewood. Under an agreement with an unaffiliated third party, upon delivery of the vessel, named Pedhoulas Cedrus, to Pinewood in June 2018, |
(4) | Kyotofriendo One had contracted to acquire the Kamsarmax class newbuild vessel with Hull No. 1551, which upon her delivery from the shipyard in January 2017 was sold. Refer to Notes 3 and 17. |
(5) | Estimated completion date for newbuild vessel as of December 31, 2019. |
December 31, | |||||||||
2017 | 2018 | 2019 | |||||||
Glencore Agriculture B.V | % | % | % | ||||||
Bunge S.A. | % | % | % |
2. | Significant Accounting Policies |
3. | Transactions with Related Parties |
Year Ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Ship Management Fees | $ | $ | $ | |||||||||
Supervision Fees | ||||||||||||
Commissions |
4. | Vessels, Net |
Vessel Cost | Accumulated Depreciation | Net Book Value | ||||||||||
Balance, January 1, 2018 | $ | $ | ( | ) | $ | |||||||
Transfer from Advances for vessels | — | |||||||||||
Depreciation expense | — | ( | ) | ( | ) | |||||||
Balance, December 31, 2018 | $ | $ | ( | ) | $ | |||||||
Transfer from Advances for vessels | — | |||||||||||
Depreciation expense | — | ( | ) | ( | ) | |||||||
Balance, December 31, 2019 | $ | $ | ( | ) | $ |
• | During the year ended December 31, 2018: Pedhoulas Cedrus and Mount Troodos; and |
• | During the year ended December 31, 2019: The amounts transferred relate to BWTS and Scrubbers retrofitting. No vessels were delivered to the Company. |
5. | Advances for Vessels |
Balance, January 1, 2018 | $ | ||
Additions for advances, including capitalized expenses and interest | |||
Transferred to vessel cost (refer to Note 4) | ( | ) | |
Balance, December 31, 2018 | |||
Additions for advances, including capitalized expenses and interest | |||
Transferred to vessel cost (refer to Note 4) | ( | ) | |
Balance, December 31, 2019 | $ |
• | During the year ended December 31, 2018: acquisition of the vessels: Pedhoulas Cedrus and Mount Troodos, advances for Hull No. S 1772 and improvements to several vessels; and |
• | During the year ended December 31, 2019: improvements to several vessels and advances for Hull No. S 1772. |
6. | Long Term Debt |
December 31, | ||||||||||
Borrower | Commencement | Maturity | 2018 | 2019 | ||||||
Safe Bulkers | November 2018 | October 2021 | ||||||||
Maxdeka | August 2011 | November 2019 | ||||||||
Shikoku | October 2011 | November 2019 | ||||||||
Maxdekatria | July 2018 | January 2020 | ||||||||
Glovertwo | July 2018 | November 2019 | ||||||||
Shikokutessera | July 2018 | November 2019 | ||||||||
Gloversix - Shikokuokto | December 2018 | December 2019 | ||||||||
Safe Bulkers | April 2019 | March 2022 | ||||||||
Maxtessera | November 2018 | October 2022 | ||||||||
Shikokupente - Shikokuennia - Pemer - Petra | July 2019 | January 2023 | ||||||||
Shikokupente | August 2018 | August 2023 | ||||||||
Shikokuennia | October 2018 | October 2023 | ||||||||
Petra | November 2018 | November 2023 | ||||||||
Pemer | November 2018 | November 2023 | ||||||||
Maxeikosiepta | December 2018 | December 2023 | ||||||||
Shikokuepta | February 2016 | February 2024 | ||||||||
Pentakomo | July 2018 | January 2020 | ||||||||
Avstes | June 2019 | May 2024 | ||||||||
Maxeikositria | September 2017 | August 2024 | ||||||||
Maxeikosi | September 2017 | August 2024 | ||||||||
Maxpente | September 2017 | August 2024 | ||||||||
Maxeikositessera | September 2017 | August 2024 | ||||||||
Maxenteka | September 2017 | August 2024 | ||||||||
Maxeikosiexi | September 2015 | September 2024 | ||||||||
Marathassa | September 2015 | September 2024 | ||||||||
Marinouki | September 2015 | September 2024 | ||||||||
Kerasies | September 2015 | September 2024 | ||||||||
Soffive | September 2015 | September 2024 | ||||||||
Eptaprohi | September 2015 | September 2024 | ||||||||
Safe Bulkers | November 2014 | September 2024 | ||||||||
Pelea - Vasstwo - Eniaprohi - Vassone | December 2018 | December 2024 | ||||||||
Maxdeka | November 2019 | August 2025 | ||||||||
Shikoku Friendship | November 2019 | August 2025 | ||||||||
Shikokutessera | November 2019 | August 2025 | ||||||||
Glovertwo | November 2019 | August 2025 | ||||||||
Maxeikosiena | September 2015 | September 2025 | ||||||||
Youngtwo | January 2017 | January 2027 | ||||||||
Shikokuokto | December 2019 | December 2027 | ||||||||
Gloversix | December 2019 | December 2027 | ||||||||
Total | ||||||||||
Current portion of Long-term debt |
Long-term debt | ||||||||||
Total debt | ||||||||||
Current portion of deferred financing costs | ||||||||||
Deferred financing costs non-current | ||||||||||
Total deferred financing costs | ||||||||||
Total debt | ||||||||||
Less: Total deferred financing costs | ||||||||||
Total debt, net of deferred financing costs | ||||||||||
Less: Current portion of long-term debt, net of current portion of deferred financing costs | ||||||||||
Long-term debt, net of deferred financing costs, non-current |
To December 31, | |||
2020 | $ | ||
2021 | |||
2022 | |||
2023 | |||
2024 | |||
2025 and thereafter | |||
Total | $ |
• | First priority mortgages over the vessels owned by the Company or title of ownership for the vessels under sale and lease back finance arrangements; |
• | For one of the Safe Bulkers credit facilities, second priority mortgages over the vessels Kanaris, Efrossini, Venus Horizon, Pedhoulas Builder and Pedhoulas Fighter; |
• | First priority assignment of all insurances and earnings of the relevant vessels; and |
• | Corporate guarantee from Safe Bulkers in respect of facilities entered into by the Subsidiaries. |
• | its total consolidated liabilities divided by its total consolidated assets (based on the market value of all vessels owned or leased on a finance lease taking into account their employment, and the book value of all other assets), must not exceed |
• | its total consolidated assets (based on the market value of all vessels owned or leased on a finance lease taking into account their employment, and the book value of all other assets) less its total consolidated liabilities must not be less than $ |
• | the ratio of its EBITDA over consolidated interest expense must not be less than |
• | its consolidated debt in relation to the |
• | a minimum of |
• | payment of dividends is subject to no event of default having occurred and be continuing or would occur as a result of the payment of such dividends. |
7. | Share Capital |
8. | Mezzanine equity |
9. | Commitments and Contingencies |
Year Ended December 31, | Due to Shipyards/Sellers | Due to Manager | Other Commitments | Total | ||||||||||||
2020 | $ | $ | $ | $ | ||||||||||||
2021 | ||||||||||||||||
2022 | ||||||||||||||||
2023 | ||||||||||||||||
Total |
10. | Revenues |
Year Ended December 31 | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Time charter revenue (operating leases) | $ | $ | $ | |||||||||
Voyage charter revenue | ||||||||||||
Other income | ||||||||||||
Total |
11. | Vessel Operating Expenses |
Year Ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Crew wages and related costs | $ | $ | $ | |||||||||
Insurance | ||||||||||||
Repairs, maintenance and drydocking costs | ||||||||||||
Spares, stores and provisions | ||||||||||||
Lubricants | ||||||||||||
Taxes | ||||||||||||
Miscellaneous | ||||||||||||
Total | $ | $ | $ |
12. | Fair Value of Financial Instruments and Derivatives Instruments |
Asset Derivatives Fair Values | Liability Derivatives Fair Values | |||||||||||||||||
Type of Contract | Balance sheet location | December 31, 2018 | December 31, 2019 | December 31, 2018 | December 31, 2019 | |||||||||||||
Bunker Fuel | Derivative liabilities / Current liabilities | $ | $ | $ | $ | |||||||||||||
Total Derivatives | $ | $ | $ | $ |
Amount of Gain/(Loss) Recognized on Derivatives Year ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Interest Rate Contracts | $ | $ | $ | |||||||||
Bunker Fuel Contracts | $ | $ | $ | ( | ) | |||||||
Net Gain/(Loss) Recognized | $ | $ | $ | ( | ) |
Significant Other Observable Inputs (Level 2) | ||||||||
December 31, | ||||||||
2018 | 2019 | |||||||
Derivative instruments – asset position | $ | $ | ||||||
Derivative instruments – liability position |
Significant Other Observable Inputs (Level 2) | Loss | |||||||
December 31, 2017 | December 31, 2017 | |||||||
M/V Panayiota K | $ | $ | ||||||
M/V Efrossini | ||||||||
M/V Venus History | ||||||||
M/V Andreas K | ||||||||
Total | $ | $ | ||||||
13. | Accrued Liabilities |
December 31, | ||||||||
2018 | 2019 | |||||||
Interest on long-term debt | $ | $ | ||||||
Vessels’ operating and voyage expenses | ||||||||
Commissions | ||||||||
Interest on derivatives and other finance expenses | ||||||||
General and administrative expenses | ||||||||
Total | $ | $ |
14. | Future Minimum Time Charter Revenue |
December 31, | |||
2020 | $ | ||
2021 | |||
2022 | |||
2023 | |||
2024 | |||
Thereafter | |||
Total | $ |
15. | General and Administrative Expenses |
December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Management fees – related parties | $ | $ | $ | |||||||||
Professional fees (legal and accounting) | ||||||||||||
Directors fess and expenses | ||||||||||||
Listing fees and expenses | ||||||||||||
Miscellaneous | ||||||||||||
Total | $ | $ | $ |
16. | Unearned Revenue /Accrued Revenue |
December 31, | ||||||||
2018 | 2019 | |||||||
Unearned Revenue | ||||||||
Cash received in advance of service provided – Current liability | $ | $ | ||||||
Deferred revenue resulting from varying charter rates – Current liability | ||||||||
Deferred revenue resulting from varying charter rates – Non-Current liability | ||||||||
Total Unearned Revenue | $ | $ | ||||||
Accrued Revenue | ||||||||
Resulting from varying charter rates – Current asset | ||||||||
Resulting from varying charter rates – Non-Current asset | ||||||||
Total Accrued Revenue | $ | $ |
17. | Loss on Sale of Assets |
18. | Dividends |
19. | (Loss)/earnings Per Share |
December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Net (loss)/income | $ | ( | ) | $ | $ | |||||||
Less preferred dividend paid and accrued | ||||||||||||
Less preferred deemed dividend | ||||||||||||
Net (loss)/income available to common shareholders | ( | ) | ||||||||||
Weighted average number of shares, basic and diluted | ||||||||||||
(Loss)/earnings per share in U.S. Dollars, basic and diluted | ( | ) |
20. | Subsequent Events |
• | 10 days following the first public announcement that a person or group of affiliated or associated persons or an “acquiring person” has acquired or obtained the right to acquire beneficial ownership of 15.0% or more of our outstanding Common Stock; or |
• | 10 business days following the start of a tender or exchange offer that would result, if closed, in a person becoming an “acquiring person.” |
• | our Common Stock certificates will evidence the rights, and the rights will be transferable only with those certificates; and |
• | any new shares of Common Stock will be issued with rights, and new certificates will contain a notation incorporating the rights agreement by reference. |
• | we are acquired in a merger or other business combination transaction; or |
• | 50.0% or more of our assets, cash flows or earning power is sold or transferred. |
• | any person other than our existing stockholder becoming the beneficial owner of Common Stock with voting power equal to 50.0% or more of the total voting power of all shares of Common Stock entitled to vote in the election of directors; or |
• | the occurrence of a flip-over event. |
• | to cure any ambiguity, omission, defect or inconsistency; |
• | to make changes that do not adversely affect the interests of holders of rights, excluding the interests of any acquiring person; or |
• | to shorten or lengthen any time period under the rights agreement, except that we cannot change the time period when rights may be redeemed or lengthen any time period, unless such lengthening protects, enhances or clarifies the benefits of holders of rights other than an acquiring person. |
(1) | SAFE BULKERS, INC., a corporation incorporated under the law of the Republic of the Marshall Islands, with its registered address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (the "Borrower") |
(2) | The Financial Institutions listed in Schedule 1 (The Original Lenders), each acting through its Facility Office (together the "Original Lenders" and each an "Original Lender") |
(3) | DNB BANK ASA, acting as mandated lead arranger through its office at 8th Floor, The Walbrook Building, 25 Walbrook, London EC4N 8AF, England (in that capacity, the "Arranger") |
(4) | DNB BANK ASA, acting as agent through its office at 8th Floor, The Walbrook Building, 25 Walbrook, London EC4N 8AF, England (in that capacity, the "Agent") |
(5) | DNB BANK ASA, acting as swap provider through its office at 8th Floor, The Walbrook Building, 25 Walbrook, London EC4N 8AF, England (in that capacity, the "Swap Provider") |
(6) | DNB BANK ASA, acting as security agent through its office at 8th Floor, The Walbrook Building, 25 Walbrook, London EC4N 8AF, England (in that capacity, the "Security Agent") |
(A) | Each Collateral Owner is a wholly owned subsidiary of the Borrower and is the registered owner of the relevant Vessel and has registered that Vessel under an Approved Flag. |
(B) | Each of the Original Lenders had agreed to advance a secured term loan of originally up to $210,000,000 to provide post-delivery financing in respect of the Vessels and for general corporate purposes, of which an amount of $94,250,000 remains outstanding as at the date of the Deed of Amendment and Restatement. |
(C) | By the Deed of Amendment and Restatement, the Borrower, the other Security Parties and the Finance Parties agreed, amongst other things, to further make available to the Borrower a reducing revolver credit of up to $10,000,000 for the purpose of financing part of the Retrofitting Costs of the Scrubber Vessels and for general corporate purposes. |
(D) | This Agreement sets out the terms and conditions of the Loan Agreement as amended and restated by the Deed of Amendment and Restatement. |
1 | DEFINITIONS AND INTERPRETATION |
1.1 | Definitions |
(a) | each Existing Charter Provided that: |
(i) | it has an unexpired term of at least three (3) months' duration; |
(ii) | it remains secured by the Existing Charter Performance Guarantee relevant thereto; |
(iii) | in the opinion of the Agent (at its absolute discretion) the financial condition of the charterer who is a party thereto has not deteriorated; and |
(iv) | it has not been terminated, repudiated, cancelled, suspended, rescinded, revoked or otherwise ceases to remain in full force and effect other than by effluxion of time; and |
(b) | any other time charter or other contract of employment which: |
(i) | has an unexpired term of at least three (3) months' duration; and |
(ii) | has been entered into by and between the respective Collateral Owner or the respective owner of any other Group Vessel (as the case may be) and a charterer which has a minimum credit rating of "BBB-" or better according to Standard and Poor's or "Baa3" or better according to Moody's; and/or |
(iii) | has not been terminated, repudiated, cancelled, suspended, rescinded, revoked or otherwise ceases to remain in full force and effect, at any time during the Facility Period, |
(a) | the Term Loan Facility, the period which ended on 8 February 2016; and |
(b) | the Reducing Revolving Facility, the period commencing on the Effective Date and ending on the Termination Date applicable to the Reducing Revolving Facility. |
(a) | in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and |
(b) | in relation to any other state, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation. |
(a) | the interest (excluding the Margin) which a Lender should have received for the period from the date of receipt of all or any part of its participation in the Loan or an Unpaid Sum to the last day of the current Interest Period in respect of the Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period; |
(b) | the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period. |
(a) | in relation to an Original Lender, the amount set opposite its name under the heading "Commitment" in Schedule 1 (The Original Lenders) and the amount of any other Commitment transferred to it under this Agreement; and |
(b) | in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement, |
(a) | any Security Party or any of its advisers; or |
(b) | another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any Security Party or any of its advisers, |
(i) | is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 35 (Confidentiality); or |
(ii) | is identified in writing at the time of delivery as non-confidential by any Security Party or any of its advisers; or |
(iii) | is known by that Finance Party before the date the information is disclosed to it in accordance with (a) or (b) or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with any Security Party and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality. |
(a) | the then current Market Values of all Group Vessels (in the case of a Vessel and any Group Vessel, the Market Value shall be conclusively determined by reference only to the most recent valuation(s) of such Vessel and such Group Vessel (as the case may be)); |
(b) | the then current aggregate amount of Cash, Marketable Securities (but excluding Marketable Securities accounted for in the definition of Consolidated Total Liabilities below) and receivables due to the Group (less provision for bad and doubtful debts) as shown in the latest financial statements of the Borrower; and |
(c) | the book values of all other assets (other than the assets referred to in sub-paragraphs (a) and (b) hereof) excluding amounts classified as "Accrued revenue resulting from varying charter rates" as shown in the latest financial statements of the Borrower. |
(a) | any amounts payable by the Group under leases, including, but not limited to, time chartering contracts, or similar arrangements over their respective periods; |
(b) | any credit to the Group from a supplier of goods or under any instalment purchase or other similar arrangement; |
(c) | the aggregate amount then outstanding of liabilities and obligations of third parties to the extent that they are guaranteed by the Group; |
(d) | any contingent liabilities (including any taxes or other payments under dispute or arbitration) which have been or, under GAAP, should be recorded in the notes to the Group's financial statements; and |
(e) | any deferred tax liabilities. |
(a) | which has failed to make its participation in a Drawing available (or has notified the Agent or the Borrower (which has notified the Agent) that it will not make its participation in a Drawing available) by the relevant Drawdown Date in accordance with Clause 5.3 (Lenders' participation); |
(b) | which has otherwise rescinded or repudiated a Finance Document; or |
(c) | with respect to which an Insolvency Event has occurred and is continuing, |
(i) | its failure to pay is caused by: |
(A) | administrative or technical error; or |
(B) | a Disruption Event; and |
(ii) | the Lender is disputing in good faith whether it is contractually obliged to make the payment in question. |
(a) | a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Loan (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or |
(b) | the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party: |
(i) | from performing its payment obligations under the Finance Documents; or |
(ii) | from communicating with other Parties in accordance with the terms of the Finance Documents, |
(a) | adding back Interest Expense; |
(b) | taking no account of any exceptional or extraordinary item; |
(c) | adding back depreciation and amortisation; |
(d) | deducting any non-cash income and non-cash gains; and |
(e) | taking no account of any revaluation of an asset or any loss or gain over book value arising on the disposal of an asset (otherwise than in the ordinary course of trading) by a member of the Group. |
(a) | a bank account opened in the name of Eniadefhi with the Account Holder and designated "Eniadefhi Shipping Corporation - Earnings Account" with account number 63646001; |
(b) | a bank account opened in the name of Maxdodeka with the Account Holder and designated "Maxdodeka Shipping Corporation - Earnings Account" with account number 63940001; |
(c) | a bank account opened or to be opened in the name of Gloverfour with the Account Holder and designated "Gloverfour Shipping Corporation - Earnings Account" with account number 65422001; |
(d) | a bank account opened or to be opened in the name of Gloverfive with the Account Holder and designated "Gloverfive Shipping Corporation - Earnings Account" with account number 65423001; |
(e) | a bank account opened or to be opened in the name of Shikokuexi with the Account Holder and designated "Shikokuexi Shipping Inc. - Earnings Account" with account number 65846001; and |
(f) | a bank account opened in the name of Youngone with the Account Holder and designated "Youngone Shipping Corporation - Earnings Account" with account number 66491001, |
(a) | any release, emission, spill or discharge into a Vessel or into or upon the air, sea, land or soils (including the seabed) or surface water of Environmentally Sensitive Material within or from a Vessel; or |
(b) | any incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water from a vessel other than a Vessel and which involves a collision between a Vessel and such other vessel or some other incident of navigation or operation, in either case, in connection with which a Vessel is actually or potentially liable to be arrested, attached, detained or injuncted and/or a Vessel and/or any Security Party and/or any operator or manager of a Vessel is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or |
(c) | any other incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water otherwise than from a Vessel and in connection with which a Vessel is actually or potentially liable to be arrested and/or where any Security Party and/or any operator or manager of a Vessel is at fault or allegedly at fault or otherwise liable to any legal or administrative action, other than in accordance with an Environmental Approval. |
(a) | m.v. "KANARIS", a capesize bulk carrier vessel registered in the ownership of Maxpente Shipping Corporation (the "Kanaris Owner") under the laws and flag of the Marshall Islands, a time charter dated 7 February 2008 as amended and/or supplemented from time to time and made between the Kanaris Owner as owner and Energy Eastern Pte. Ltd. as charterer for a daily charter hire of $25,928 with a termination date not earlier than June 2031; |
(b) | m.v. "PELOPIDAS", a capesize bulk carrier vessel registered in the ownership of Eptaprohi Shipping Corporation (the "Pelopidas Owner") under the laws and flag of the Marshall Islands, a time charter dated 25 June 2008 as amended and/or supplemented from time to time and made between the Pelopidas Owner as owner and Global Chartering Limited as charterer for a daily charter hire of $38,000 with a termination date not earlier than December 2021; and |
(c) | m.v. "LAKE DESPINA", a capesize bulk carrier vessel registered in the ownership of Maxtessera Shipping Corporation (the "Lake Despina Owner") under the laws and flag of Cyprus, a time charter dated 23 November 2010 as amended and/or supplemented from time to time and made between the Lake Despina Owner as owner and Louis Dreyfus as charterer for a daily charter hire of $24,810 with a termination date not earlier than January 2024, |
(a) | sections 1471 to 1474 of the Code or any associated regulations; |
(b) | any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in (a); or |
(c) | any agreement pursuant to the implementation of any treaty, law or regulation referred to in (a) or (b) with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction. |
(a) | in relation to a "withholdable payment" described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014; |
(b) | in relation to a "withholdable payment" described in section 1473(1)(A)(ii) of the Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the US), 1 January 2019; or |
(c) | in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within (a) or (b), 1 January 2019, |
(a) | moneys borrowed and debit balances at banks or other financial institutions; |
(b) | any acceptance under any acceptance credit or bill discounting facility (or dematerialised equivalent); |
(c) | any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; |
(d) | the amount of any liability in respect of any finance or capital lease; |
(e) | receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis); |
(f) | any actual amount which is due as a result of the termination or close-out of any Treasury Transaction; |
(g) | any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution in respect of (i) an underlying liability of an entity which is not a Security Party or a member of the Group which liability would fall within one of the other sections of this definition or (ii) any liabilities of any Security Party or any other member of the Group relating to any post-retirement benefit scheme; |
(h) | any amount classified as borrowings under GAAP; |
(i) | any amount of any liability under an advance or deferred purchase agreement if (i) one of the primary reasons behind entering into the agreement is to raise finance or to finance the acquisition or construction of the asset or service in question or (ii) the agreement is in respect of the supply of assets or services and payment is due more than 120 days after the date of supply; |
(j) | any amount raised under any other transaction (including any forward sale or purchase, sale and sale back or sale and leaseback agreement) having the commercial effect of a borrowing or otherwise classified as borrowings under GAAP; and |
(k) | the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in (a) to (j). |
(a) | it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment; |
(b) | the Agent otherwise rescinds or repudiates a Finance Document; |
(c) | (if the Agent is also a Lender) it is a Defaulting Lender under (a) or (b) of the definition of "Defaulting Lender"; or |
(d) | an Insolvency Event has occurred and is continuing with respect to the Agent; |
(i) | its failure to pay is caused by: |
(A) | administrative or technical error; or |
(B) | a Disruption Event; and |
(ii) | the Agent is disputing in good faith whether it is contractually obliged to make the payment in question. |
(a) | is dissolved (other than pursuant to a consolidation, amalgamation or merger); |
(b) | becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; |
(c) | makes a general assignment, arrangement or composition with or for the benefit of its creditors; |
(d) | institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation by it or such regulator, supervisor or similar official; |
(e) | has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in (d) and: |
(i) | results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation; or |
(ii) | is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; |
(f) | has exercised in respect of it one or more of the stabilisation powers pursuant to Part 1 of the Banking Act 2009 and/or has instituted against it a bank insolvency proceeding pursuant to Part 2 of the Banking Act 2009 or a bank administration proceeding pursuant to Part 3 of the Banking Act 2009; |
(g) | has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); |
(h) | seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets (other than, for so long as it is required by law or regulation not to be publicly disclosed, any such appointment which is to be made, or is made, by a person or entity described in (d)); |
(i) | has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; |
(j) | causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in (a) to (i); or |
(a) | the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors; |
(b) | the time barring of claims under the Limitation Acts, the possibility that an undertaking to assume liability for or indemnify a person against non-payment of UK stamp duty may be void and defences of set-off or counterclaim; |
(c) | similar principles, rights and defences under the laws of any Relevant Jurisdiction; and |
(d) | any qualifications contained in any Legal Opinion. |
(a) | any Original Lender; and |
(b) | any bank, financial institution, trust, fund or other entity which has become a Party as a Lender in accordance with Clause 23 (Changes to the Lenders), |
(a) | the applicable Screen Rate; or |
(b) | (if (i) no Screen Rate is available for the currency of the Loan or (ii) no Screen Rate is available for the relevant Interest Period) the Reference Bank Rate, |
(a) | the Term Loan Facility, the loan made available under that Facility; or |
(b) | the Reducing Revolving Facility, the Drawings made or to be made available under that Facility, |
(a) | they will remain the commercial or technical managers of each Vessel (as the case may be); |
(b) | they will not, without the prior written consent of the Agent, such consent not to be unreasonably withheld or delayed, subcontract or delegate the commercial or technical management of each Vessel (as the case may be) to any third party; |
(c) | the interests of the Managers in the Insurances will be assigned to the Security Agent with first priority; and |
(d) | (following the occurrence of an Event of Default) all claims of the Managers against the relevant Collateral Owner shall be subordinated to the claims of the Finance Parties under the Finance Documents. |
(a) | the Term Loan Facility : |
(i) | 2.10 per cent. (2.10%) per annum, for the period commencing on 2 October 2018 and ending on 30 March 2022; and |
(ii) | 2.30 per cent. (2.30%) per annum, for the period commencing on 31 March 2022 and throughout the remainder of the Facility Period; and |
(b) | the Reducing Revolving Facility, 2.20 per cent. (2.20%) per annum. |
(a) | the business and the financial condition of the Group taken as a whole; or |
(b) | the ability of any Security Party to perform its obligations under any Finance Document; or |
(c) | the validity or enforceability of, or the effectiveness or ranking of any Encumbrance granted or purporting to be granted pursuant to any of, the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents. |
(a) | the First Revolver Drawing, an amount not exceeding the lesser of: |
(i) | $10,000,000, as such amount shall be reduced on each Reduction Date or otherwise cancelled or reduced (other than amounts repaid or prepaid) under this Agreement; |
(ii) | an amount which when aggregated with the Term Loan Facility, shall not exceed 70 per cent. of the Revolver Market Value of the Vessels and solely in relation to the Scrubber Vessels taking into account the benefit of the Retrofitting as if it has been completed on the Scrubber Vessels; and |
(iii) | an amount which when aggregated with the Term Loan Facility, shall not exceed 75 per cent. of the Revolver Market Value of the Vessels, excluding, for the avoidance of doubt, the benefit of the Retrofitting (if any) which has not been completed; |
(b) | a Subsequent Revolver Drawing, an amount not exceeding the lesser of: |
(i) | $10,000,000, as such amount shall be reduced on each Reduction Date or otherwise cancelled or reduced (other than amounts repaid or prepaid) under this Agreement; and |
(ii) | an amount which when aggregated with the Loan, shall not exceed 70 per cent. of the Revolver Market Value of the Vessels. |
(a) | of trading stock or cash made by any Security Party; |
(b) | of any asset by any Security Party (the "Disposing Company") to any other Security Party (the "Acquiring Company"), but if: |
(i) | the Disposing Company had given any Encumbrance over the asset, the Acquiring Company must give an equivalent Encumbrance over that asset; and |
(ii) | the Disposing Company is a Guarantor, the Acquiring Company must guarantee at all times an amount no less than that guaranteed by the Disposing Company; |
(c) | of assets in exchange for other assets comparable or superior as to type, value and quality; |
(d) | of obsolete or redundant vehicles, plant and equipment for cash or asset s in accordance with (c); |
(e) | arising as a result of any Permitted Encumbrance; and |
(f) | of assets (other than shares) for cash where the higher of the market value and net consideration receivable (when aggregated with the higher of the market value and net consideration receivable for any other sale, lease, licence, transfer or other disposal not allowed under (a) to (f) or as a Permitted Transaction) does not exceed $3,000,000 (or its equivalent) in total during the term of this Agreement and does not exceed $500,000 (or its equivalent) in any financial year of the Borrower. |
(a) | any Encumbrance which has the prior written approval of the Agent; |
(b) | any Encumbrance arising by operation of law and in the ordinary course of trading and not as a result of any default or omission by a Security Party; |
(c) | any Quasi-Security arising as a result of a disposal which is a Permitted Disposal; or |
(d) | any liens for current crews' wages and salvage and liens incurred in the ordinary course of trading the Vessel up to an aggregate amount at any time no more than 30 days overdue. |
(a) | any disposal required, Financial Indebtedness incurred, guarantee, indemnity or Encumbrance or Quasi-Security given, or other transaction arising, under the Finance Documents; or |
(b) | transactions (other than (i) any sale, lease, license, transfer or other disposal and (ii) the granting or creation of any Encumbrance or the incurring or permitting to subsist of Financial Indebtedness) conducted in the ordinary course of trading on arm's length terms. |
(a) | its Original Jurisdiction; |
(b) | any jurisdiction where any asset subject to or intended to be subject to a Security Document to be executed by it is situated; |
(c) | any jurisdiction where it conducts its business; and |
(a) | that is listed on any Sanctions List (whether designated by name or by reason of being included in a class of person); |
(b) | that is domiciled, registered as located or having its main place of business in, or is incorporated under the laws of, a country which is subject to Sanctions Laws; or |
(c) | that is directly or indirectly owned or controlled by a person referred to in (a) and/or (b) above; or |
(d) | with which any Lender is prohibited from dealing or otherwise engaging in a transaction with by any Sanctions Laws. |
(a) | the Term Loan Facility, 30 September 2024; and |
(b) | the Reducing Revolving Facility, the date falling on the earlier of: |
(i) | 31 March 2022; and |
(ii) | the date falling of the third anniversary of the First Revolver Drawing. |
(a) | an actual, constructive, arranged, agreed or compromised total loss of a Vessel; or |
(b) | the requisition for title or compulsory acquisition of a Vessel by any government or other competent authority (other than by way of requisition for hire); or |
(c) | the capture, seizure, arrest, detention, hijacking, piracy, theft, condemnation as prize, confiscation or forfeiture of a Vessel (not falling within (b)), unless the Vessel in question is released and returned to the possession of the relevant Collateral Owner within 1 month (but in the case of piracy one hundred and eighty (180) days) after the capture, seizure, arrest, detention, hijacking, piracy, theft, condemnation as prize, confiscation or forfeiture in question. |
(a) | the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate; and |
(b) | the date on which the Agent executes the relevant Assignment Agreement or Transfer Certificate. |
(a) | all benefits derived by the Security Agent from Clause 17 (Security Documents and Application of Moneys); and |
(b) | all benefits arising under (including, without limitation, all proceeds of the enforcement of) each of the Security Documents, |
(a) | a Security Party which is resident for tax purposes in the US; or |
(b) | a Security Party some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes. |
(a) | any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and |
(b) | any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in (a), or imposed elsewhere. |
Name of Vessel | Collateral Owner | Defined as | Dwt | IMO number | Year of build |
MARTINE | Eniadefhi | "Vessel A" | 87,000 | 9411537 | 2009 |
ANDREAS K | Maxdodeka | "Vessel B" | 91,800 | 9438121 | 2009 |
KYPROS BRAVERY | Gloverfour | "Vessel C" | 77,078 | 9694490 | 2015 |
KYPROS LOYALTY | Gloverfive | "Vessel D" | 77,078 | 9717424 | 2015 |
TROODOS AIR | Shikokuexi | "Vessel E" | 84,000 | 9698226 | 2016 |
PEDHOULAS CHERRY | Youngone | "Vessel F" | 82,000 | 9738040 | 2015 |
(a) | in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule; and |
(b) | in relation to any other applicable Bail-In Legislation: |
(i) | any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and |
(ii) | any similar or analogous powers under that Bail-In Legislation. |
1.2 | Construction |
(a) | any "Lender", the "Borrower", any "Security Party" the "Arranger", the "Agent", the "Swap Provider", any "Secured Party", the "Security Agent", any "Finance Party" or any "Party" shall be construed so as to include its successors in title, permitted assignees and permitted transferees; |
(b) | a document in "agreed form" is a document which is previously agreed in writing by or on behalf of the Borrower and the Agent; |
(c) | "assets" includes present and future properties, revenues and rights of every description; |
(d) | a "Finance Document", a "Security Document", a "Relevant Document" or any other document is a reference to that Finance Document, Security Document, Relevant Document or other document as amended, novated, supplemented, extended or restated from time to time in accordance with its terms; |
(e) | a "group of Lenders" includes all the Lenders; |
(f) | "indebtedness" includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent; |
(g) | a "person" includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership or other entity (whether or not having separate legal personality); |
(h) | a "regulation" includes any regulation, rule, official directive, request or guideline (whether or not having the force of law, but which the Finance Party applying the same is required to comply with) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organisation; |
(i) | a provision of law is a reference to that provision as amended or re-enacted from time to time; and |
(j) | a time of day (unless otherwise specified) is a reference to London time. |
1.3 | Headings |
1.4 | Defined terms |
1.5 | Default |
1.6 | Currency symbols and definitions "$", "USD" and "dollars" |
1.7 | Third party rights |
1.8 | Offer letter |
2 | THE LOAN |
2.1 | Amount |
(a) | continue to make available to the Borrower a secured term loan in an aggregate amount not exceeding $94,250,000 at any one time; and |
(b) | to make available to the Borrower a reducing revolving credit facility not exceeding the Maximum Available Amount at any one time. |
2.2 | Finance Parties' rights and obligations |
(a) | The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents. |
(b) | The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from a Security Party shall be a separate and independent debt. |
(c) | A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents. |
3 | PURPOSES |
3.1 | Purposes |
3.2 | Monitoring |
4 | CONDITIONS OF UTILISATION |
4.1 | Initial conditions precedent |
(a) | The Lenders will only be obliged to comply with Clause 5.3 (Lenders' participation) in relation to the advance of a Drawing if on or before the relevant Drawdown Date, the Agent has received all of the documents and other evidence listed in Part I of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Agent. The Agent shall notify the Borrower and the Lenders promptly upon being so satisfied. |
(b) | Other than to the extent that the Majority Lenders notify the Agent in writing to the contrary before the Agent gives the notification described in Clause 4.1(a), the Lenders authorise the Agent to give that notification. The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification. |
4.2 | Further conditions precedent |
(a) | no Event of Default is continuing and no notice has been issued pursuant to Clause 22.2 (Acceleration) in respect thereof; and |
(b) | the representations made by the Borrower under Clause 18 (Representations) are true. |
4.3 | Drawing under the Reducing Revolving Facility |
(a) | no other Drawing has been made on the same Business Day; |
(b) | that Drawing will not result in there being more than five (5) Drawings in total; |
(c) | the Agent has received two, or as the case may be, three valuations in accordance with Clause 17.11 (Market Value Determination) for the purpose of determining the Market Value of the Vessels and each such valuation shall be dated not earlier than 30 days of the relevant Drawdown Date; and |
(d) | that Drawing will not exceed the Maximum Available Amount. |
4.4 | Conditions subsequent |
4.5 | No waiver |
4.6 | Form and content |
(a) | be in form and substance acceptable to the Agent; and |
(b) | if required by the Agent, be certified, notarised, legalised or attested in a manner acceptable to the Agent. |
5 | ADVANCE |
5.1 | Delivery of a Drawdown Request |
5.2 | Completion of a Drawdown Request |
(a) | it is signed by an authorised signatory of the Borrower; |
(b) | the proposed Drawdown Date is a Business Day within the Availability Period; and |
(c) | the proposed Interest Period complies with Clause 9 (Interest Periods). |
5.3 | Lenders' participation |
(a) | Subject to Clauses 2 (The Loan), 3 (Purposes) and 4 (Conditions of Utilisation), each Lender shall make its participation in any Drawing available by the Drawdown Date through its Facility Office. |
(b) | The amount of each Lender's participation in any Drawing will be equal to the proportion borne by its Commitment to the Total Commitments. |
5.4 | Cancellation of Commitment |
6 | REPAYMENT |
6.1 | Repayment of Term Loan Facility |
6.2 | Reducing Revolving Facility |
6.3 | Termination Date |
6.4 | Reborrowing |
(a) | The Borrower may not reborrow any part of Term Loan Facility which is repaid or prepaid. |
(b) | Amounts under the Reducing Revolving Facility which are repaid or prepaid shall be available for reborrowing in accordance with Clause 4 (Conditions of Utilisation) prior to the end of the Availability Period applicable to the Reducing Revolving Facility. |
7 | ILLEGALITY, PREPAYMENT AND CANCELLATION |
7.1 | Illegality |
(a) | without limitation to the Agent's right under Clause 7.1(b) to cancel immediately, that Lender shall promptly notify the Agent upon becoming aware of that event and shall use its reasonable endeavours to change its lending office within ten (10) Business Days from the date thereof; |
(b) | upon the expiry of ten (10) Business Days from the time the Agent is notified by the Lender of the relevant Illegality and provided the Lender has been unable to change its lending office and/or otherwise to remedy such Illegality, the Agent shall notify the Borrower in writing that the Commitment of that Lender will be immediately cancelled; and |
(c) | the Borrower shall repay that Lender's participation in the Loan on the last day of its current Interest Period or, if earlier, the date specified by that Lender in the notice delivered to the Agent and notified by the Agent to the Borrower (being no earlier than the last day of any applicable grace period permitted by law). |
7.2 | Voluntary cancellation |
7.3 | Voluntary prepayment of Loan |
(a) | The Borrower may prepay the whole or any part of the Loan (but, if in part, being an amount that reduces the Loan by an amount which is an integral multiple of one million dollars ($1,000,000)) subject to giving the Agent not less than five (5) Business Days' (or such shorter period as the Majority Lenders may agree) prior notice. |
(b) | Any prepayment under this Clause 7.3 (Voluntary prepayment of Loan) made in relation to the Term Loan Facility, shall reduce (at the selection of the Borrower), in inverse chronological order of maturity or in direct chronological order or pro rata, the amount of the Repayment Instalments for each Repayment Date falling after that repayment or prepayment. |
7.4 | Right of cancellation and prepayment in relation to a single Lender |
(a) | If: |
(i) | any sum payable to any Lender by the Borrower is required to be increased under Clause 12.2(b) (Tax gross-up); or |
(ii) | any Lender claims indemnification from the Borrower under Clause 12.3 (Tax indemnity) or Clause 13.1 (Increased costs), |
(b) | On receipt of a cancellation notice referred to in Clause 7.4(a) in relation to a Lender, the Commitment(s) of that Lender shall immediately be reduced to zero. |
(c) | On the last day of the Interest Period in respect of the Loan which ends after the Borrower has given a repayment notice under Clause 7.4(a) in relation to a Lender (or, if earlier, the date specified by the Borrower in that repayment notice), the Borrower shall repay that Lender's participation in the Loan together with all interest and other amounts accrued under the Finance Documents. |
(d) | For the avoidance of doubt, the Borrower has the right to send its Cancellation Notice and its Repayment Notice in one notice. |
7.5 | Mandatory prepayment on sale or Total Loss |
(a) | If a Vessel is sold by a Collateral Owner (subject to Clause 7.6 (Vessel Substitution Option)) or becomes a Total Loss, the Borrower shall, simultaneously with any such sale (the "Sale Mandatory Prepayment Date") or on the earlier of the date falling 150 days after any such Total Loss and the date on which the proceeds of any such Total Loss are realised (the "Total Loss Prepayment Date") prepay the Loan in an amount equal to the higher of: |
(i) | an amount which equals the Market Value of that Vessel, divided by the aggregate Market Value of all Vessels multiplied by the Loan; and |
(ii) | an amount which when applied against the Loan results in the VTL Coverage being at least equal to 120 per cent., |
(b) | The Prepayment Amount or, as the case may be, the Deposit (if the same is not released in accordance with the terms of Clause 7.6(a) (Vessel Substitution Option)) shall be applied proportionately against the Repayment Instalments. |
(c) | Following such prepayment, the Collateral Owner which owns that Vessel, at the cost of and on the request of the Borrower, will be released from its obligations under the Loan Agreement and the Security Documents to which it is a party, unless an Event of Default has occurred and is continuing. |
7.6 | Vessel Substitution Option |
(a) | As an alternative to paying the Prepayment Amount if a Vessel is sold by a Collateral Owner, the Borrower may, on the Sale Mandatory Prepayment Date, transfer to the Restricted Cash Account an amount equal to the Prepayment Amount (a "Deposit"). The Deposit shall be released to the Borrower on the date on which the Agent is satisfied that the conditions in Clause 7.6(b) (Vessel Substitution Option) have been met (so long as this occurs during the Substitution Period). If the Deposit has not been released by the last day (inclusive) of the Substitution Period, it shall be applied in prepayment of the Loan in accordance with Clause 7.4 (Mandatory Prepayment on sale or Total Loss). |
(b) | If a Vessel is sold by a Collateral Owner (and the Borrower has opted to pay a Deposit in accordance with Clause 7.6(a) or becomes a Total Loss (the "Disposed Vessel"), the Borrower may (and, if the Borrower decides to provide a Replacement Vessel, it shall procure that the Replacement Collateral Owner and each other Security Party shall) on the date falling no later than 150 days after any such sale or, in the case of a Total Loss, the Total Loss Prepayment Date (the "Substitution Period"): |
(i) | replace the Disposed Vessel with a Replacement Vessel; |
(ii) | promptly do all such acts or execute all such documents (including agreements, assignments, transfers, mortgages, charges, notices and instructions) as the Security Agent may reasonably specify (and in such form as the Security Agent may reasonably require in favour of the Security Agent); and |
(iii) | provide to the Agent such applicable documents and other evidence listed in Schedule 2 in relation to that Replacement Collateral Owner, each in form and substance reasonably satisfactory to the Agent; and |
(iv) | the Replacement Vessel must be a vessel registered under an Approved Flag in the ownership of a Replacement Collateral Owner, acceptable to the Agent in its absolute discretion (each, a "Replacement Vessel") having a Market Value which, when aggregated with the Market Value of the other Collateral Vessels and any additional security provided by the Borrower, including without limitation, any part of the Deposit referred to in Clause 7.6(a) (and taking into account any prepayment made pursuant to Clause 7.5(b) results in the VTL Coverage being at least equal to the VTL Coverage maintained immediately prior to the sale or Total Loss of the Disposed Vessel. |
7.7 | Ownership and control |
(a) | If: |
(i) | If the Borrower's shares are quoted on the New York Stock Exchange or Nasdaq National Market in New York or any other internationally recognised stock exchange acceptable to the Lenders: |
(A) | the Current Shareholders: |
(1) | hold directly or indirectly less than thirty per cent (30%) of the voting and ownership rights in the shares of the Borrower; or |
(2) | own or Control less shares in the Borrower than any other person or group of persons, acting alone or in consent, without the prior written concent of the Majority Lenders; and |
(B) | Mr. Polys Hadjioannou beneficially holds directly or indirectly less than twenty per cent (20%) of the voting and ownership rights in the shares of the Borrower; and/or |
(ii) | If the Borrower's shares cease to be quoted on the New York Stock Exchange or Nasdaq National Market in New York or any other internationally recognised stock exchange acceptable to the Lender: |
(A) | Mr. Polys Hadjioannou beneficially holds, directly or indirectly, less than fifty one per cent (51%) of the voting and ownership rights in the shares of the Borrower; and |
(B) | the total share capital of the Borrower is not beneficially held directly or indirectly by: |
(1) | the Current Shareholders; or |
(2) | such shareholders as may be approved by the Agent pursuant to the terms of a shareholders' agreement on terms acceptable to the Agent (at its absolute discretion); and/or |
(iii) | any person or group of persons, other than the Current Shareholders, acting alone or in concert gains Control of the Borrower; and/or |
(iv) | Mr. Polys Hadjioannou or any other member of the Hadjioannou Family appointed by the Current Shareholders ceases to be the chief executive officer (CEO) or Chairman of the Borrower, |
(b) | For the purpose of this Clause: |
(a) | the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to: |
(i) | cast, or control the casting of, more than 50 per cent. of the maximum number of votes that might be cast at a general meeting of the Borrower; or |
(ii) | appoint or remove all, or the majority, of the directors or other equivalent officers of the Borrower; or |
(iii) | give directions with respect to the operating and financial policies of the Borrower; and/or |
(b) | the holding beneficially of more than 50 per cent. of the issued share capital of the Borrower (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital). |
7.8 | Right of cancellation in relation to a Defaulting Lender |
7.9 | Mandatory prepayment of Reducing Revolving Facility for non-completed Retrofitting |
(a) | In the event that the Retrofitting has not been completed for any of Vessel A, Vessel B and Vessel F, by not later than 30 July 2019 (the "Retrofitting Test Date"), the Borrower shall on the Retrofitting Test Date prepay the Reducing Revolving Facility in an amount which would result in the aggregate Market Value of the Vessels being equal to 70 per cent. of the aggregate of the amount of the Loan then outstanding and the amount certified by the Swap Provider to be the negative mark-to-market at the time for any derivative products entered into by the Borrower with the Swap Provider. |
(b) | For the avoidance of doubt, the Market Value under paragraph (a) above, shall be calculated on the basis the most recent valuations delivered to the Agent pursuant to Clause 17.11 (Market Value Determination) and Clause 17.12 (Cost of valuation). |
7.10 | Restrictions |
8 | INTEREST |
8.1 | Calculation of interest |
(a) | Margin; and |
(b) | LIBOR. |
8.2 | Payment of interest |
8.3 | Default interest |
(a) | If the Borrower fails to pay any amount payable by it under a Finance Document other than a Master Agreement on its due date, interest shall accrue on the Unpaid Sum from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is 2 per cent. per annum higher than the rate which would have been payable if the Unpaid Sum had, during the period of non-payment, constituted part of the Loan in the currency of the Unpaid Sum for successive Interest Periods, each of a duration selected by the Agent (acting reasonably). Any interest accruing under this Clause 8.3 (Default interest) shall be immediately payable by the Borrower on demand by the Agent. |
(b) | Without prejudice to the rights of the Finance Parties under Clause 22.2 (Acceleration), if the Agent (acting on the instructions of the Majority Lenders) gives written notice to the Borrower of the occurrence of an Event of Default (other than an Event of Default referred to in Clause 22.1(a) (Non-payment)) and demands payment of interest under this paragraph (b) of Clause 8.3 (Default interest), interest shall accrue on the amount of the Loan from the date of such notice up to the date on which the Agent (acting on the instructions of the Majority Lenders) gives notice to the Borrower that such Event of Default is no longer continuing. Interest shall accrue at a rate which is 2 per cent per annum higher than the applicable rate for each part of the Loan. |
(c) | Default interest (if unpaid) arising on an Unpaid Sum or, in the case of paragraph (b), the Loan will be compounded with the Unpaid Sum or, as the case may be, the Loan at the end of each Interest Period applicable to that Unpaid Sum or, as the case may be, the Loan but will remain immediately due and payable. |
8.4 | Notification of rates of interest |
9 | INTEREST PERIODS |
9.1 | Selection of Interest Periods |
(a) | each notice is irrevocable and must be delivered to the Agent by the Borrower not later than 11.00 a.m. on the Quotation Day; |
(b) | if the Borrower fails to give a notice in accordance with Clause 9.1(a), the relevant Interest Period will, subject to Clause 9.2 (Non-Business Days) and Clause 9.3 (Interest Periods to meet Repayment Dates), be three months; |
(c) | subject to this Clause 9 (Interest Periods), the Borrower may select an Interest Period of 3, 6 or 12 months or any other period agreed between the Borrower and the Agent (acting on the instructions of all the Lenders); |
(d) | an Interest Period shall not extend beyond the Termination Date; and |
(e) | each Interest Period shall start on the Drawdown Date in respect of the first Drawing and end on the date which numerically corresponds to the Drawdown Date in the relevant calendar month except that, if there is no numerically corresponding date in that calendar month, the Interest Period shall end on the last Business Day in that month. |
9.2 | Non-Business Days |
9.3 | Interest Periods to meet Repayment Dates or Reduction Dates |
10 | CHANGES TO THE CALCULATION OF INTEREST |
10.1 | Absence of quotations |
10.2 | Market disruption |
(a) | the Margin; and |
(b) | the rate notified to the Agent by that Lender as soon as practicable, and in any event by close of business on the date falling three Business Days after the Quotation Day (or, if earlier, on the date falling three Business Days prior to the date on which interest is due to be paid in respect of that Interest Period), to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in the Loan from whatever source it may reasonably select. |
(i) | at or about noon on the Quotation Day for the relevant Interest Period LIBOR is to be determined by reference to the Reference Banks and none of the Reference Banks supplies a rate to the Agent to determine LIBOR for dollars and the relevant Interest Period; or |
(ii) | before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders (whose participations in the Loan exceed fifty per cent (50%) of the Loan) that the cost to it of funding its participation in the Loan from whatever source it may reasonably select would be in excess of LIBOR. |
10.3 | Alternative basis of interest or funding |
(a) | If a Market Disruption Event occurs and the Agent or the Borrower so requires, the Agent and the Borrower shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest. |
(b) | Any alternative basis agreed pursuant to Clause 10.3(a) shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties. |
10.4 | Break Costs |
11 | FEES |
11.1 | Upfront Fee |
11.2 | Commitment Fee |
11.3 | Structuring fee |
11.4 | Agency fee |
11.5 | Amendment fee |
12 | TAX GROSS UP AND INDEMNITIES |
12.1 | Definitions |
(a) | where it relates to a Treaty Lender that is an Original Lender, contains the scheme reference number and jurisdiction of tax residence stated opposite that Lender's name in Part A of Schedule 1 (The Original Lenders) and is filed with HM Revenue & Customs within 30 days of the date of this Agreement; or |
(b) | where it relates to a Treaty Lender that is a New Lender, contains the scheme reference number and jurisdiction of tax residence stated in respect of that Lender in the relevant Transfer Certificate or Assignment Agreement, and is filed with HM Revenue & Customs within 30 days of that Transfer Date. |
(a) | which is a bank (as defined for the purpose of section 879 of the ITA) making an advance under a Finance Document and is within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance or would be within such charge as respects such payments apart from section 18A of the CTA; or in respect of an advance made under a Finance Document by a person that was a bank (as defined for the purpose of section 879 of the ITA) at the time that that advance was made and within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance; or |
(b) | which is: |
(i) | a company resident in the United Kingdom for United Kingdom tax purposes; |
(ii) | a partnership each member of which is: |
(A) | a company so resident in the United Kingdom; or |
(B) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or |
(iii) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company; or |
(c) | which is a Treaty Lender. |
(a) | a company resident in the United Kingdom for United Kingdom tax purposes; |
(b) | a partnership each member of which is: |
(i) | a company so resident in the United Kingdom; or |
(ii) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or |
(c) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company. |
(a) | is treated as a resident of a Treaty State for the purposes of the Treaty; |
(b) | does not carry on a business in the United Kingdom through a permanent establishment with which that Lender's participation in the Loan is effectively connected. |
(a) | where a Lender becomes a Party on the day on which this Agreement is entered into, a Lender listed in Part B of Schedule 1 (The Original Lenders); and |
(b) | where a Lender becomes a Party after the day on which this Agreement is entered into, a Lender which gives a Tax Confirmation in the Transfer Certificate which it executes on becoming a Party. |
12.2 | Tax gross-up |
(a) | the Borrower shall promptly upon becoming aware that it or any other Security Party must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Borrower and any such other Security Party; |
(b) | if a Tax Deduction is required by law to be made by the Borrower or any other Security Party, the amount of the payment due from the Borrower or that other Security Party shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required; |
(c) | a payment shall not be increased under Clause 12.2(b) by reason of a Tax Deduction on account of Tax imposed by the United Kingdom, if on the date on which the payment falls due: |
(i) | the payment could have been made to the relevant Lender without a Tax Deduction if the Lender had been a Qualifying Lender, but on that date that Lender is not or has ceased to be a Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty or any published practice or published concession of any relevant taxing authority; or |
(ii) | the relevant Lender is a Qualifying Lender solely by virtue of (b) of the definition of Qualifying Lender and: |
(A) | an officer of H.M. Revenue & Customs has given (and not revoked) a direction (a "Direction") under section 931 of the ITA which relates to the payment and that Lender has received from the Borrower or from the other Security Party making the payment a certified copy of that Direction; and |
(B) | the payment could have been made to the Lender without any Tax Deduction if that Direction had not been made; or |
(iii) | the relevant Lender is a Qualifying Lender solely by virtue of (b) of the definition of Qualifying Lender and: |
(A) | the relevant Lender has not given a Tax Confirmation to the Borrower; and |
(B) | the payment could have been made to the Lender without any Tax Deduction if the Lender had given a Tax Confirmation to the Borrower, on the basis that the Tax Confirmation would have enabled the Borrower to have formed a reasonable belief that the payment was an "excepted payment" for the purpose of section 930 of the ITA; or |
(iv) | the relevant Lender is a Treaty Lender and the Borrower or the other Security Party making the payment is able to demonstrate that the payment could have been made to that Lender without the Tax Deduction had that Lender complied with its obligations under Clause 12.2(f) or Clause 12.2(g) (as applicable); |
(d) | if the Borrower or any other Security Party is required to make a Tax Deduction, the Borrower shall (and shall procure that such other Security Party shall) make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law; |
(e) | within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Borrower shall (and shall procure that such other Security Party shall) deliver to the Agent for the Finance Party entitled to the payment a statement under section 975 of the ITA or other evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority; |
(i) | Subject to (ii), a Treaty Lender and the Borrower shall co-operate (and the Borrower shall procure that each other Security Party which makes a payment to which that Treaty Lender is entitled shall co-operate) in completing any procedural formalities necessary for the Borrower or that other Security Party to obtain authorisation to make that payment without a Tax Deduction. |
(A) | A Treaty Lender which becomes a Party on the day on which this Agreement is entered into that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall confirm its scheme reference number and its jurisdiction of tax residence opposite its name in Part A of Schedule 1 (The Original Lenders); and |
(B) | a New Lender that is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall confirm its scheme reference number and its jurisdiction of tax residence in the Transfer Certificate or Assignment Agreement which it executes, |
(g) | If a Lender has confirmed its scheme reference number and its jurisdiction of tax residence in accordance with Clause 12.2(f)(ii) and: |
(i) | the Borrower making a payment to that Lender has not made a Borrower DTTP Filing in respect of that Lender; or |
(ii) | the Borrower making a payment to that Lender has made a Borrower DTTP Filing in respect of that Lender but: |
(A) | that Borrower DTTP Filing has been rejected by HM Revenue & Customs; or |
(B) | HM Revenue & Customs has not given the Borrower authority to make payments to that Lender without a Tax Deduction within 60 days of the date of the Borrower DTTP Filing, |
(h) | If a Lender has not confirmed its scheme reference number and jurisdiction of tax residence in accordance with Clause 12.2(f)(ii), the Borrower shall not make a Borrower DTTP Filing or file any other form relating to the HMRC DT Treaty Passport scheme in respect of that Lender's Commitment(s) or its participation in the Loan unless the Lender otherwise agrees. |
(i) | The Borrower shall, promptly on making a Borrower DTTP Filing, deliver a copy of that Borrower DTTP Filing to the Agent for delivery to the relevant Lender. |
(j) | A UK Non-Bank Lender which becomes a Party on the day on which this Agreement is entered into gives a Tax Confirmation to the Borrower by entering into this Agreement. |
(k) | A UK Non-Bank Lender shall promptly notify the Borrower and the Agent if there is any change in the position from that set out in the Tax Confirmation. |
12.3 | Tax indemnity |
(a) | The Borrower shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document. |
(b) | Clause 12.3(a) shall not apply: |
(i) | with respect to any Tax assessed on a Finance Party: |
(A) | under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or |
(B) | under the law of the jurisdiction in which that Finance Party's Facility Office is located in respect of amounts received or receivable in that jurisdiction, |
(ii) | to the extent a loss, liability or cost: |
(A) | is compensated for by an increased payment under Clause 12.2 (Tax gross-up); |
(B) | would have been compensated for by an increased payment under Clause 12.2 (Tax gross-up) but was not so compensated solely because one of the exclusions in Clause 12.2(c) (Tax gross-up) applied; or |
(C) | relates to a FATCA Deduction required to be made by a Party. |
(c) | A Protected Party making, or intending to make a claim under Clause 12.3(a) shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Borrower. |
(d) | A Protected Party shall, on receiving a payment from the Borrower under this Clause 12.3 (Tax indemnity), notify the Agent. |
12.4 | Tax Credit |
(a) | a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was required; and |
(b) | that Finance Party has obtained and utilised that Tax Credit, |
12.5 | Lender status confirmation |
(a) | not a Qualifying Lender; |
(b) | a Qualifying Lender (other than a Treaty Lender); or |
(c) | a Treaty Lender. |
12.6 | Stamp taxes |
12.7 | VAT |
(a) | All amounts expressed to be payable under a Finance Document by any Party or any Security Party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to Clause 12.7(b), if VAT is or becomes chargeable on any supply made by any Finance Party to any Party or any Security Party under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that Party or Security Party must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to the Borrower). |
(b) | If VAT is or becomes chargeable on any supply made by any Finance Party (the "Supplier") to any other Finance Party (the "Recipient") under a Finance Document, and any Party other than the Recipient (the "Relevant Party") is required by the terms of any Finance Document to pay an amount equal to the consideration for that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration): |
(i) | (where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this Clause 12.7(b)(i) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and |
(ii) | (where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT. |
(c) | Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority. |
(d) | Any reference in this Clause 12.7 (VAT) to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term "representative member" to have the same meaning as in the Value Added Tax Act 1994). |
(e) | In relation to any supply made by a Finance Party to any Party under a Finance Document, if reasonably requested by such Finance Party, that Party must promptly provide such Finance Party with details of that Party's VAT registration and such other information as is reasonably requested in connection with such Finance Party's VAT reporting requirements in relation to such supply. |
12.8 | FATCA information |
(a) | Subject to Clause 12.8(c), each Party shall, within ten Business Days of a reasonable request by another Party: |
(i) | confirm to that other Party whether it is: |
(A) | a FATCA Exempt Party; or |
(B) | not a FATCA Exempt Party; |
(ii) | supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; and |
(iii) | supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party's compliance with any other law, regulation, or exchange of information regime. |
(b) | If a Party confirms to another Party pursuant to Clause 12.3(b)(i)(A) that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly. |
(c) | Clause 12.8(a) shall not oblige any Finance Party to do anything, and Clause 12.8(a)(iii) shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of: |
(i) | any law or regulation; |
(ii) | any fiduciary duty; or |
(iii) | any duty of confidentiality. |
(d) | If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with Clause 12.8(a)(i) or Clause 12.8(a)(ii) (including, for the avoidance of doubt, where Clause 12.8(c) applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information. |
12.9 | FATCA Deduction |
(a) | Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction. |
(b) | Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction) notify the Party to whom it is making the payment and, in addition, shall notify the Borrower and the Agent and the Agent shall notify the other Finance Parties. |
13 | INCREASED COSTS |
13.1 | Increased costs |
(a) | a reduction in the rate of return from the Loan or on a Finance Party's (or its Affiliate's) overall capital; |
(b) | an additional or increased cost; or |
(c) | a reduction of any amount due and payable under any Finance Document, |
13.2 | Increased cost claims |
(a) | A Finance Party intending to make a claim pursuant to Clause 13.1 (Increased costs) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrower. |
(b) | Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs in reasonable detail, provided that the relevant Finance Party shall be under no obligation to disclose any information which it in its absolute discretion deems to be confidential to its business. |
13.3 | Exceptions |
(a) | attributable to a Tax Deduction required by law to be made by the Borrower; |
(b) | attributable to a FATCA Deduction required to be made by a Party; |
(c) | compensated for by Clause 12.3 (Tax indemnity) (or would have been compensated for under Clause 12.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in Clause 12.3 (Tax indemnity) applied); |
(d) | attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation; or |
(e) | attributable to an election made by the relevant Finance Party voluntarily. |
14 | OTHER INDEMNITIES |
14.1 | Currency indemnity |
(a) | making or filing a claim or proof against the Borrower, or |
(b) | obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings, |
14.2 | Other indemnities |
(a) | The Borrower shall, within three Business Days of demand, indemnify each Finance Party against any documented cost, loss or liability incurred by that Finance Party as a result of: |
(i) | the occurrence of any Event of Default; |
(ii) | a failure by the Borrower to pay any amount due under a Finance Document on its due date( after taking into account any applicable grace period), including without limitation, any documented cost, loss or liability arising as a result of Clause 27 (Sharing among the Finance Parties); |
(iii) | funding, or making arrangements to fund, a Drawing following delivery by the Borrower of a Drawdown Request but that Drawing not being advanced by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by a Finance Party alone); or |
(iv) | the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower. |
(b) | The Borrower shall promptly indemnify each Finance Party, each Affiliate of a Finance Party and each officer or employee of a Finance Party or its Affiliate (each such person for the purposes of this Clause 14.2 (Other indemnities) an "Indemnified Person") against any documented cost, loss or liability incurred by that Indemnified Person pursuant to or in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry, in connection with or arising out of the entry into and the transactions contemplated by the Finance Documents, having the benefit of any Encumbrance constituted by the Finance Documents or which relates to the condition or operation of, or any incident occurring in relation to, a Vessel, unless such cost, loss or liability is caused by the gross negligence or wilful misconduct of that Indemnified Person. |
(c) | Subject to any limitations set out in Clause 14.2(b), the indemnity in that Clause shall cover any cost, loss or liability incurred by each Indemnified Person in any jurisdiction: |
(i) | arising or asserted under or in connection with any law relating to safety at sea, the ISM Code, any Environmental Law or any Sanctions Laws; or |
(ii) | in connection with any Environmental Claim. |
14.3 | Indemnity to the Agent |
(a) | Any documented cost, loss or liability incurred by the Agent (acting reasonably) as a result of: |
(i) | investigating any event which it reasonably believes is a Default; or |
(ii) | acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or |
(iii) | instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under this Agreement; and |
(b) | any documented cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Agent reasonably (otherwise than by reason of the Agent's gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 28.12 (Disruption to payment systems etc.) notwithstanding the Agent's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) in acting as Agent under the Finance Documents. |
14.4 | Indemnity to the Security Agent |
(a) | any failure by the Borrower to comply with its obligations under Clause 16 (Costs and Expenses); |
(b) | acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; |
(c) | the taking, holding, protection or enforcement of the Security Documents; |
(d) | the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Security Agent and each Receiver and Delegate by the Finance Documents or by law; |
(e) | any default by any Security Party in the performance of any of the obligations expressed to be assumed by it in the Finance Documents; or |
(f) | acting as Security Agent, Receiver or Delegate under the Finance Documents or which otherwise relates to any of the Charged Property (otherwise, in each case, than by reason of the relevant Security Agent's, Receiver's or Delegate's gross negligence or wilful misconduct). |
14.5 | Indemnity survival |
15 | MITIGATION BY THE LENDERS |
15.1 | Mitigation |
15.2 | Limitation of liability |
16 | COSTS AND EXPENSES |
16.1 | Transaction expenses |
(a) | the negotiation, preparation, printing, execution and perfection of this Agreement and any other documents referred to in this Agreement; |
(b) | the negotiation, preparation, printing, execution and perfection of any other Finance Documents executed after the date of this Agreement and any amendments to the Finance Documents; |
(c) | any other document which may at any time be required by a Finance Party to give effect to any Finance Document or which a Finance Party is entitled to call for or obtain under any Finance Document (including, without limitation, any valuation of a Vessel and all premiums and other sums from time to time payable by the Security Agent in relation to the Mortgagee's Insurances); and |
(d) | any discharge, release or reassignment of any of the Security Documents. |
16.2 | Amendment costs |
16.3 | Enforcement and preservation costs |
16.4 | Other costs |
17 | SECURITY DOCUMENTS AND APPLICATION OF MONEYS |
17.1 | Security Documents |
(a) | in relation to each Vessel, a first preferred or priority statutory mortgage over each Vessel together with a collateral deed of covenants (if applicable); |
(b) | in relation to each Vessel a first priority deed or deeds of assignment of the Insurances, Earnings and Requisition Compensation of each Vessel; and the first priority assignment of Insurances from the Managers contained in the Managers' Undertakings; |
(c) | a guarantee and indemnity from each Guarantor; |
(d) | a first priority account security deed in respect of all amounts from time to time standing to the credit of the Earnings Accounts; and |
(e) | a first priority deed of charge over the Master Agreement Benefits. |
17.2 | Earnings Accounts |
17.3 | Earnings |
17.4 | Relocation of Accounts |
17.5 | Access to information |
17.6 | Statements |
17.7 | Application after acceleration |
17.8 | Application of moneys by Security Agent |
(a) | pursuant to a sale or other disposition of a Vessel or any right, title or interest in a Vessel; or |
(b) | by way of payment of any sum in respect of the Insurances, Earnings or Requisition Compensation; or |
(c) | by way of transfer of any sum from any of the Earnings Accounts; or |
(d) | otherwise under or in connection with any Security Document, |
(e) | first, any unpaid fees, costs, expenses and default interest due to the Agent and the Security Agent (and, in the case of the Security Agent, to any Receiver or Delegate) under all or any of the Finance Documents, such application to be apportioned between the Agent and the Security Agent pro rata to the aggregate amount of such items due to each of them; |
(f) | second, any unpaid fees, costs, expenses (including any sums paid by the Lenders under Clause 25.11 (Lenders' indemnity to the Agent)) of the Lenders due under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such items due to each of them; |
(g) | third, any accrued but unpaid default interest due to the Lenders under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such default interest due to each of them; |
(h) | fourth, any other accrued but unpaid interest due to the Lenders under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such interest due to each of them; |
(i) | fifth, any principal of the Term Loan Facility due and payable but unpaid under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such principal due to each of them; |
(j) | sixth, any outstanding principal of the Reducing Revolving Facility under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such principal due to each of them and a respective reduction of the Maximum Available Amount applicable at such time, such reduction to be apportioned between the Lenders' Commitment pro rata; |
(k) | seventh, any other sum due and payable to any Finance Party but unpaid under all or any of the Finance Documents, such application to be apportioned between the Finance Parties pro rata to the aggregate amount of any such sum due to each of them; |
17.9 | Retention on account |
17.10 | Additional security |
(a) | make a cash deposit to the Restricted Cash Account secured in favour of the Security Agent as additional security for the payment of the Indebtedness; or |
(b) | give to the Security Agent other additional security in amount and form acceptable to the Security Agent in its discretion; or |
(c) | prepay the Loan, |
17.11 | Market Value Determination |
17.12 | Cost of valuation |
18 | REPRESENTATIONS |
18.1 | Representations |
(a) | Status |
(i) | is a limited liability corporation, duly incorporated and validly existing under the law of its jurisdiction of incorporation; and |
(ii) | has the power to own its assets and carry on its business as it is being conducted. |
(b) | Binding obligations |
(i) | the obligations expressed to be assumed by each of the Security Parties in each of the Relevant Documents to which it is a party are legal, valid, binding and enforceable obligations; and |
(ii) | (without limiting the generality of Clause 18.1(b)(i)), each Security Document to which it is a party creates the security interests which that Security Document purports to create and those security interests are valid and effective. |
(c) | Non-conflict with other obligations |
(i) | any law or regulation applicable to such Security Party; |
(ii) | the constitutional documents of such Security Party; or |
(iii) | any agreement or instrument binding upon such Security Party or any of such Security Party's assets or constitute a default or termination event (however described) under any such agreement or instrument. |
(d) | Power and authority |
(i) | Each of the Security Parties has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Relevant Documents to which it is or will be a party and the transactions contemplated by those Relevant Documents. |
(ii) | No limit on the powers of any Security Party will be exceeded as a result of the borrowing, grant of security or giving of guarantees or indemnities contemplated by the Relevant Documents to which it is a party. |
(e) | Validity and admissibility in evidence |
(i) | to enable each of the Security Parties lawfully to enter into, exercise its rights and comply with its obligations in the Relevant Documents to which it is a party or to enable each Finance Party to enforce and exercise all its rights under the Relevant Documents; and |
(ii) | to make the Relevant Documents to which any Security Party is a party admissible in evidence in its Relevant Jurisdictions, |
(f) | Governing law and enforcement |
(i) | The choice of governing law of any Finance Document will be recognised and enforced in the Relevant Jurisdictions of each relevant Security Party. |
(ii) | Any judgment obtained in relation to any Finance Document in the jurisdiction of the governing law of that Finance Document will be recognised and enforced in the Relevant Jurisdictions of each relevant Security Party. |
(g) | Insolvency |
(h) | No filing or stamp taxes |
(i) | Deduction of Tax |
(i) | a Qualifying Lender falling within (a) of the definition of Qualifying Lender; or, except where a Direction has been given under section 931 of the ITA in relation to the payment concerned, a Qualifying Lender falling within (b) of the definition of Qualifying Lender; or |
(ii) | a Treaty Lender and the payment is one specified in a direction given by the Commissioners of Revenue & Customs under Regulation 2 of the Double Taxation Relief (Taxes on Income) (General) Regulations 1970 (SI 1970/488). |
(j) | No default |
(k) | No misleading information |
(i) | all material information provided to a Finance Party by or on behalf of any of the Security Parties on or before the date of this Agreement and not superseded before that date is accurate and not misleading in any material respect and all projections provided to any Finance Party on or before the date of this Agreement have been prepared in good faith on the basis of assumptions which were reasonable at the time at which they were prepared and supplied; and |
(ii) | all other written information provided by any of the Security Parties (including its advisers) to a Finance Party was true, complete and accurate in all material respects as at the date it was provided and is not misleading in any respect. |
(l) | Financial statements |
(i) | The Original Financial Statements were prepared in accordance with GAAP consistently applied. |
(ii) | The Original Financial Statements and the unaudited quarterly financial statements provided under Clause 19.1 (Financial statements) fairly represent the Group's financial condition and results of operations for the relevant financial quarter. |
(iii) | The Original Financial Statements give a true and fair view of the Group's financial condition and results of operations during the relevant financial year. |
(iv) | There has been no material adverse change in the financial condition or consolidated financial condition of the Group since the date of the Original Financial Statements. |
(v) | Each Security Party's (other than the Manager) most recent financial statements delivered pursuant to Clause 19.1 (Financial statements): |
(A) | have been prepared in accordance with GAAP as applied to the Original Financial Statements; and |
(B) | give a true and fair view of (if audited) or fairly represent (if unaudited) its consolidated financial condition as at the end of, and consolidated results of operations for, the period to which they relate. |
(vi) | Since the date of the most recent financial statements delivered pursuant to Clause 19.1 (Financial statements) there has been no material adverse change in the business, assets or financial condition of any of the Security Parties. |
(m) | No proceedings pending or threatened |
(n) | No breach of laws |
(o) | Environmental laws |
(i) | Each of the Security Parties and each other member of the Group is in compliance with Clause 21.3 (Environmental compliance) and to the best of its knowledge and belief (having made due and careful enquiry) no circumstances have occurred which would prevent such compliance in a manner or to an extent which has or is reasonably likely to have a Material Adverse Effect. |
(ii) | No Environmental Claim has been commenced or (to the best of its knowledge and belief (having made due and careful enquiry)) is threatened against any of the Security Parties or any other member of the Group where that claim has or is reasonably likely, if determined against that Security Party or other member of the Group, to have a Material Adverse Effect. |
(p) | Taxation |
(i) | None of the Security Parties nor any other member of the Group is materially overdue in the filing of any Tax returns or is overdue in the payment of any amount in respect of Tax which may have a Material Adverse Effect. |
(ii) | No claims or investigations are being, or are reasonably likely to be, made or conducted against any of the Security Parties or any other member of the Group with respect to Taxes such that a liability of, or claim against, any of the Security Parties or any other member of the Group which may have a Material Adverse Effect. |
(iii) | Each of the Security Parties and each other member of the Group is resident for Tax purposes outside its Original Jurisdiction. |
(q) | Anti-corruption law |
(r) | No Encumbrance or Financial Indebtedness |
(i) | No Encumbrance exists over all or any of the present or future assets of any of the Security Parties (other than the Borrower or the Manager). |
(ii) | None of the Security Parties (other than the Borrower or the Manager) has any Financial Indebtedness outstanding other than as permitted by this Agreement. |
(s) | Pari passu ranking |
(t) | Disclosure of material facts |
(u) | Completeness of Relevant Documents |
(v) | Money laundering |
(w) | Sanctions |
(i) | Each Security Party, each Affiliate of any of them or other member of the Group, their joint ventures, and their respective directors, officers, employees, agents or representatives has been and is in compliance with Sanctions Laws; |
(ii) | No Security Party, nor any Affiliate of any of them or other member of the Group, their joint ventures, and their respective directors, officers, employees, agents or representatives: |
(A) | is a Restricted Party, or is involved in any transaction through which it is likely to become a Restricted Party; or |
(B) | is subject to or involved in any inquiry, claim, action, suit, proceeding or investigation against it with respect to Sanctions Laws by any Sanctions Authority. |
(x) | Ownership and control of Collateral Owners |
(y) | No rebates etc. |
18.2 | Repetition |
19 | INFORMATION UNDERTAKINGS |
19.1 | Financial statements |
(a) | as soon as the same become available, but in any event within 150 days after the end of each of its financial years its audited consolidated financial statements for that financial year; and |
(b) | as soon as the same become available, but in any event within 90 days after the end of each quarter during each of its financial years its unaudited consolidated quarterly financial statements for that quarter; and |
(c) | if requested by the Agent, as soon as the same become available, but in any event within 90 days after the end of each quarter during each of the Collateral Owner's financial years, the unaudited financial statements of the Collateral Owners for that quarter. |
19.2 | Compliance Certificate |
(a) | The Borrower shall supply to the Agent, with each set of its annual financial statements delivered pursuant to Clause 19.1(a) (Financial statements) and each set of its quarterly financial statements in respect of the financial quarters ending in June and December of each calendar year pursuant to Clause 19.1(b) (Financial statements), a Compliance Certificate setting out (in reasonable detail) computations as to compliance with Clause 20 (Financial Covenants) as at the date as at which those financial statements were drawn up. |
(b) | Each Compliance Certificate shall be signed by two officers of the Borrower, one being the Chief Financial Officer. |
19.3 | Requirements as to financial statements |
(a) | shall be certified by an officer of the relevant company as giving a true and fair view of (in the case of annual financial statements), or fairly representing (in other cases), its financial condition as at the date as at which those financial statements were drawn up; and |
(b) | shall be prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements unless, in relation to any set of financial statements, it notifies the Agent that there has been a change in GAAP, the accounting practices or reference periods and its auditors deliver to the Agent: |
(i) | a description of any change necessary for those financial statements to reflect the GAAP, accounting practices and reference periods upon which the Original Financial Statements were prepared; and |
(ii) | sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Agent to determine whether Clause 20 (Financial Covenants) has been complied with and make an accurate comparison between the financial position indicated in those financial statements and the Original Financial Statements. |
19.4 | Information: miscellaneous |
(a) | promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any Security Party, and which, if adversely determined, are reasonably likely to have a Material Adverse Effect; |
(b) | promptly, such information as the Security Agent may reasonably require about the Charged Property and compliance of the Security Parties with the terms of any Security Documents including without limitation cash flow analyses and details of the operating costs of the Vessels; |
(c) | promptly on request, such further information regarding the financial condition, assets and operations of any Security Party (including any requested amplification or explanation of any item in the financial statements, budgets or other material provided by any Security Party under this Agreement as any Finance Party through the Agent may reasonably request); |
(d) | promptly upon becoming aware of them, the details of any inquiry, claim, action, suit, proceeding or investigation pursuant to Sanctions Laws by any Sanctions Authority against it, any of its direct or indirect owners, Subsidiaries or other member of the Group, any of their joint ventures or any of their respective directors, officers, employees, agents or representatives, as well as information on what steps are being taken with regards to answer or oppose such; and |
(e) | promptly upon becoming aware that it, any of its direct or indirect owners, Subsidiaries or other member of the Group, any of their joint ventures or any of their respective directors, officers, employees, agents or representatives has become or is likely to become a Restricted Party. |
19.5 | Notification of default |
19.6 | "Know your customer" checks |
(a) | If: |
(i) | the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement; |
(ii) | any change in the status of a Security Party after the date of this Agreement; or |
(iii) | an assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer, |
(b) | Each Lender shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the Agent to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents. |
19.7 | Provision of information |
20 | FINANCIAL COVENANTS |
20.1 | Consolidated Group Leverage |
20.2 | EBITDA to Interest Expense |
20.3 | Net Worth |
21 | GENERAL UNDERTAKINGS |
21.1 | Authorisations |
(a) | obtain, comply with and do all that is necessary to maintain in full force and effect; and |
(b) | supply certified copies to the Agent of, |
(i) | enable any Security Party to perform its obligations under the Finance Documents to which it is a party; |
(ii) | ensure the legality, validity, enforceability or admissibility in evidence of any Finance Document; and |
(iii) | enable any Security Party to carry on its business where failure to do so has or is reasonably likely to have a Material Adverse Effect. |
21.2 | Compliance with laws |
(a) | The Borrower shall comply (and shall procure that each other Security Party and each Affiliate of any of them shall comply), in all respects with all laws. |
(b) | The Borrower shall comply (and shall procure that each other Security Party, each other member of the Group and each Affiliate of any of them shall comply) in all respects with all Sanctions Laws. |
21.3 | Environmental compliance |
(a) | comply with all Environmental Laws; |
(b) | obtain, maintain and ensure compliance with all requisite Environmental Approvals; and |
(c) | implement procedures to monitor compliance with and to prevent liability under any Environmental Law, |
21.4 | Environmental Claims |
(a) | any Environmental Claim against any of the Security Parties which is current, pending or threatened; and |
(b) | any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any of the Security Parties, |
21.5 | Anti-corruption law |
(a) | The Borrower shall not (and shall procure that no other Security Party will) directly or indirectly use the proceeds of the Loan for any purpose which would breach the Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other jurisdictions. |
(b) | The Borrower shall (and shall procure that each other Security Party shall): |
(i) | conduct its businesses in compliance with applicable anti-corruption laws; and |
(ii) | maintain policies and procedures designed to promote and achieve compliance with such laws. |
21.6 | Taxation |
(a) | The Borrower shall (and shall procure that each other Security Party shall) pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that: |
(i) | such payment is being contested in good faith; |
(ii) | adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to the Agent under Clause 19.1 (Financial statements); and |
(iii) | such payment can be lawfully withheld. |
(b) | The Borrower may not (and no other Security Party may) change its residence for Tax purposes. |
21.7 | Evidence of good standing |
21.8 | Pari passu ranking |
21.9 | Negative pledge |
(a) | The Borrower shall procure that no Collateral Owner will create nor permit to subsist any Encumbrance over any of its present or future assets |
(b) | The Borrower shall procure that no Collateral Owner will: |
(i) | sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by a Security Party; |
(ii) | sell, transfer or otherwise dispose of any of its receivables on recourse terms; |
(iii) | enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or |
(iv) | enter into any other preferential arrangement having a similar effect, |
(c) | Clauses 21.9(a) and 21.9(b) do not apply to any Encumbrance or (as the case may be) Quasi-Security, which is a Permitted Encumbrance or a Permitted Transaction. |
21.10 | Disposals |
(a) | Except as permitted under Clause 21.10(a), or for the sale of a Vessel provided the relevant prepayment is made in accordance with Clause 7.5 (Mandatory prepayment on sale or Total Loss), the Borrower shall procure that no other Security Party (other than the Manager) will enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset. |
(b) | Clause 21.10(a) does not apply to any sale, lease, transfer or other disposal which is a Permitted Disposal or a Permitted Transaction. |
21.11 | Arm's length basis |
(a) | Except as permitted under Clause 21.11(c), the Borrower shall not (and shall procure that no other Security Party will) enter into any transaction with any third party except on arm's length terms and for full market value. |
(b) | The Borrower shall not (and shall procure that no Collateral Owner will) enter into transactions that are not on arm's length basis with any associated companies, unless any off-market terms agreed are to the benefit of the Borrower or the relevant Collateral Owner. |
(c) | The following transactions shall not be a breach of this Clause 21.11 (Arm's length basis): |
(i) | fees, costs and expenses payable under the Relevant Documents in the amounts set out in the Relevant Documents delivered to the Agent under Clause 4.1 (Initial conditions precedent) or agreed by the Agent; and |
(ii) | any Permitted Transaction. |
21.12 | Merger |
21.13 | Change of business |
21.14 | No other business |
21.15 | No acquisitions |
21.16 | No Joint Ventures |
(a) | enter into, invest in or acquire (or agree to acquire) any shares, stocks, securities or other interest in any Joint Venture; or |
(b) | transfer any assets or lend to or guarantee or give an indemnity for or give security for the obligations of a Joint Venture or maintain the solvency of or provide working capital to any Joint Venture (or agree to do any of the foregoing). |
21.17 | No borrowings |
(a) | the Loan; |
(b) | any normal trade credits in the ordinary course of business and loans from shareholders and loans from other members of the Group, which are fully subordinated to the Loan and for such trade credits or loans there shall be no payment of principal or interest if an Event of Default has occurred and is continuing. |
21.18 | No loans or credit |
21.19 | No guarantees or indemnities |
21.20 | Inspection of records |
21.21 | No change in Relevant Documents |
21.22 | Further assurance |
(a) | The Borrower shall (and shall procure that each other Security Party shall) promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Security Agent may reasonably specify (and in such form as the Security Agent may reasonably require in favour of the Security Agent or its nominee(s)): |
(i) | to perfect any Encumbrance created or intended to be created under or evidenced by the Security Documents (which may include the execution of a mortgage, charge, assignment or other Encumbrance over all or any of the assets which are, or are intended to be, the subject of the Security Documents) or for the exercise of any rights, powers and remedies of the Security Agent or the Finance Parties provided by or pursuant to the Finance Documents or by law; |
(ii) | to confer on the Security Agent or confer on the Finance Parties an Encumbrance over any property and assets of the Borrower (or that other Security Party as the case may be) located in any jurisdiction equivalent or similar to the Encumbrance intended to be conferred by or pursuant to the Security Documents; and/or |
(iii) | to facilitate the realisation of the assets which are, or are intended to be, the subject of the Security Documents. |
(b) | The Borrower shall (and shall procure that each other Security Party shall) take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Encumbrance conferred or intended to be conferred on the Security Agent or the Finance Parties by or pursuant to the Finance Documents. |
21.23 | No dealings with Master Agreement |
21.24 | Liquidity |
21.25 | Subordination of shareholder loans |
21.26 | No Subsidiaries |
21.27 | No transfer of shares |
21.28 | Ownership of Collateral Owners |
(a) | each Collateral Owner shall remain a wholly owned direct or indirect Subsidiary of the Borrower; and |
(b) | there shall be no change in the legal ownership and control of a Collateral Owner (which change would result in that Collateral Owner ceasing to be a wholly owned direct or indirect Subsidiary of the Borrower) or the beneficial ownership and control of the Managers without the prior written consent of the Agent such consent not to be unreasonably withheld or delayed. |
21.29 | Master Agreement |
21.30 | Use of proceeds |
21.31 | Sanctions |
21.32 | Stock exchange requirements |
21.33 | Dividends |
(a) | at the relevant time an Event of Default has occurred and remains continuing or would result from the making of such dividend or distribution; and |
(b) | the Borrower cannot demonstrate compliance with the requirements of Clause 20 (Financial Covenants) both before and after the making of such dividend or distribution. |
21.34 | Retrofitting |
(a) | The Borrower shall advise the Agent in writing in relation to (i) the date on which the Retrofitting of a Scrubber Vessel is scheduled to take place (and the actual date on which the Retrofitting commences) and (ii) the date on which the Retrofitting of that Scrubber Vessel is completed. |
(b) | The Borrower shall provide the Agent within 30 days after the completion of the Retrofitting of a Scrubber Vessel with a written confirmation by way of attestation or otherwise by the relevant class evidencing the successful completion of the Retrofitting on that Scrubber Vessel; and |
(c) | The Borrower shall provide the Agent within 70 days after the completion of the Retrofitting of a Scrubber Vessel with: |
(i) | evidence, in form satisfactory to the Agent, that all the invoices relating to the Retrofitting Cost of that Scrubber Vessel have been paid in full; |
(ii) | the relevant class certificate of that Scrubber Vessel evidencing the successful completion of the Retrofitting; and |
(iii) | any other evidence requested by the Lender for the purpose of determining (i) and (ii) above. |
22 | EVENTS OF DEFAULT |
22.1 | Events of Default |
(a) | Non-payment |
(b) | Other specific obligations |
(i) | Any requirement of Clause 20 (Financial Covenants) is not satisfied. |
(ii) | A Security Party does not comply with any obligation in a Finance Document relating to the Insurances, with Clause 17.10 (Additional security) and Clause 21.28 (Ownership of Collateral Owners)). |
(c) | Other obligations |
(d) | Misrepresentation |
(e) | Cross default |
(i) | is not paid when due nor within any originally applicable grace period; or |
(ii) | is declared to be, or otherwise becomes, due and payable prior to its specified maturity as a result of an event of default (however described). |
(f) | Insolvency |
(i) | A Security Party is unable or admits inability to pay its debts as they fall due, is deemed to, or is declared to, be unable to pay its debts under applicable law, suspends or threatens to suspend making payments on any of its debts. |
(ii) | The value of the assets of a Security Party is less than its liabilities (taking into account contingent and prospective liabilities). |
(iii) | A moratorium is declared in respect of any indebtedness of a Security Party. |
(g) | Insolvency proceedings |
(i) | the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration, bankruptcy or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of a Security Party; |
(ii) | a composition, compromise, assignment or arrangement with any creditor of a Security Party; |
(iii) | the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager, or trustee or other similar officer in respect of a Security Party or any of its assets; or |
(iv) | enforcement of any Encumbrance over a substantial portion of the Borrower's assets which has not been remedied within 15 days, |
(h) | Creditors' process |
(i) | Unlawfulness and invalidity |
(i) | It is or becomes unlawful for a Security Party to perform any of its obligations under the Finance Documents or any Encumbrance created or expressed to be created or evidenced by the Security Documents ceases to be effective. |
(ii) | Any obligation or obligations of any Security Party under any Finance Documents are not (subject to the Legal Reservations) or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and adversely affects the interests of the Lenders under the Finance Documents. |
(iii) | Any Finance Document ceases to be in full force and effect or any Encumbrance created or expressed to be created or evidenced by the Security Documents ceases to be legal, valid, binding, enforceable or effective or is alleged by a party to it (other than a Finance Party) to be ineffective. |
(j) | Cessation of business |
(k) | Change in ownership or control of a Collateral Owner |
(l) | Expropriation |
(m) | Repudiation and rescission of agreements |
(i) | A Security Party rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document or evidences an intention to rescind or repudiate a Finance Document. |
(ii) | Subject to Clause 22.1(m)(iii), any party to any of the Relevant Documents that is not a Finance Document rescinds or purports to rescind or repudiates or purports to repudiate that Relevant Document in whole or in part where to do so has or is, in the reasonable opinion of the Majority Lenders, likely to have a material adverse effect on the interests of the Lenders under the Finance Documents. |
(iii) | Any of the Management Agreements is terminated, cancelled or otherwise ceases to remain in full force and effect at any time prior to its contractual expiry date and is not immediately replaced by a similar agreement in form and substance satisfactory to the Majority Lenders. |
(n) | Conditions precedent and subsequent |
(o) | Revocation or modification of Authorisation |
(p) | Reduction of capital |
(q) | Loss of Vessel |
(i) | the relevant prepayment is made in accordance with Clause 7.5 (Mandatory prepayment on sale or Total Loss); or |
(ii) | that Vessel or other vessel is insured in accordance with the Security Documents and a claim for Total Loss is available under the terms of the relevant insurances; and |
(iii) | no insurer has refused to meet or has disputed the claim for Total Loss and it is not apparent to the Agent that any such refusal or dispute is likely to occur; and |
(iv) | payment of all insurance proceeds in respect of the Total Loss is made in full to the Security Agent within 150 days of the occurrence of the casualty giving rise to the Total Loss in question or such longer period as the Agent may in its discretion agree. |
(r) | Challenge to registration |
(s) | War |
(t) | Notice of determination |
(u) | Litigation |
(v) | Material adverse change |
(w) | Sanctions |
(i) | Any of the Security Parties or any Affiliate of any of them becomes a Restricted Party or becomes owned or controlled by, or acts directly or indirectly on behalf of, a Restricted Party or any of such persons becomes the owner or controller of a Restricted Party. |
(ii) | Any proceeds of the Loan are made available, directly or indirectly, to or for the benefit of a Restricted Party or otherwise is, directly or indirectly, applied in a manner or for a purpose prohibited under Sanctions Laws. |
(iii) | Any of the Security Parties or any Affiliate of any of them is not in compliance with all Sanctions Laws. |
(x) | Arrest |
22.2 | Acceleration |
(a) | by notice to the Borrower cancel the Total Commitments, at which time they shall immediately be cancelled; |
(b) | by notice to the Borrower declare that the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents are immediately due and payable, at which time they shall become immediately due and payable; |
(c) | by notice to the Borrower declare that the Loan is payable on demand, at which time it shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders; and/or |
(d) | exercise or direct the Security Agent to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents. |
23 | CHANGES TO THE LENDERS |
23.1 | Assignments and transfers by the Lenders |
(a) | assign any of its rights; or |
(b) | transfer by novation any of its rights and obligations, |
23.2 | Conditions of assignment or transfer |
(a) | No assignment or transfer in accordance with Clause 23.1 (Assignments and transfers by the Lenders) can be made without the Borrower's prior written consent unless it is: |
(i) | to an Affiliate of the Original Lender; or |
(ii) | to a bank or financial institution and is made 60 days after the occurrence of an Event of Default which is continuing; or |
(iii) | to a trust or fund and is made 270 days after the occurrence of an Event of Default which is continuing. |
(b) | In the cases where the prior written consent of the Borrower is required for an assignment or transfer under Clause 23.2(a), the consent of the Borrower must not be unreasonably withheld or delayed if such assignment or transfer is to a bank or financial institution which has experience in providing financing to the shipping industry. |
(c) | An assignment will only be effective on: |
(i) | receipt by the Agent of written confirmation from the New Lender (in form and substance satisfactory to the Agent) that the New Lender will assume the same obligations to the other Finance Parties as it would have been under if it was an Original Lender; and |
(ii) | performance by the Agent of all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to such assignment to a New Lender, the completion of which the Agent shall promptly notify to the Existing Lender and the New Lender. |
(d) | A transfer will only be effective if the procedure set out in Clause 23.5 (Procedure for transfer) is complied with. |
(e) | If: |
(i) | a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and |
(ii) | as a result of circumstances existing at the date the assignment, transfer or change occurs, the Borrower would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 12 (Tax Gross Up and Indemnities) or Clause 13 (Increased Costs), |
(iii) | in relation to Clause 12.2 (Tax gross-up), to a Treaty Lender that has included a confirmation of its scheme reference number and its jurisdiction of tax residence in accordance with Clause 12.2(f)(ii)(B) (Tax gross-up) if the Borrower making the payment has not made a Borrower DTTP Filing in respect of that Treaty Lender. |
(f) | Each New Lender confirms, for the avoidance of doubt, that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the transfer or assignment becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender. |
23.3 | Assignment or transfer fee |
23.4 | Limitation of responsibility of Existing Lenders |
(a) | Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for: |
(i) | the legality, validity, effectiveness, adequacy or enforceability of the Relevant Documents or any other documents; |
(ii) | the financial condition of any Security Party; |
(iii) | the performance and observance by any Security Party or any other member of the Group of its obligations under the Relevant Documents or any other documents; or |
(iv) | the accuracy of any statements (whether written or oral) made in or in connection with any of the Relevant Documents or any other document, |
(b) | Each New Lender confirms to the Existing Lender and the other Finance Parties that it: |
(i) | has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Security Party and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any of the Relevant Documents; and |
(ii) | will continue to make its own independent appraisal of the creditworthiness of each Security Party and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force. |
(c) | Nothing in any Finance Document obliges an Existing Lender to: |
(i) | accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 23 (Changes to the Lenders); or |
(ii) | support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Security Party of its obligations under the Relevant Documents or otherwise. |
23.5 | Procedure for transfer |
(a) | Subject to the conditions set out in Clause 23.2 (Conditions of assignment or transfer) a transfer is effected in accordance with Clause 23.5(c) when the Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to Clause 23.2(c)(ii), as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate. |
(b) | The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the transfer to such New Lender. |
(c) | On the Transfer Date: |
(i) | to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents the Borrower and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and their respective rights against one another shall be cancelled (being the "Discharged Rights and Obligations"); |
(ii) | the Borrower and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as the Borrower and the New Lender have assumed and/or acquired the same in place of the Borrower and the Existing Lender; |
(iii) | the Agent, the Security Agent, the Arranger, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Agent, the Security Agent, the Arranger and the Existing Lender shall each be released from further obligations to each other under this Agreement; and |
(iv) | the New Lender shall become a Party as a "Lender". |
23.6 | Procedure for assignment |
(a) | Subject to the conditions set out in Clause 23.2 (Conditions of assignment or transfer) an assignment may be effected in accordance with Clause 23.6(c) when the Agent executes an otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to Clause 23.6(b), as soon as reasonably practicable after receipt by it of a duly completed Assignment Agreement appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Assignment Agreement. |
(b) | The Agent shall only be obliged to execute an Assignment Agreement delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary "know your customer" or similar checks under all applicable laws and regulations in relation to the assignment to such New Lender. |
(c) | On the Transfer Date: |
(i) | the Existing Lender will assign absolutely to the New Lender its rights under the Finance Documents and in respect of any Encumbrance created or expressed to be created or evidenced by the Security Documents and expressed to be the subject of the assignment in the Assignment Agreement; |
(ii) | the Existing Lender will be released from the obligations (the "Relevant Obligations") expressed to be the subject of the release in the Assignment Agreement (and any corresponding obligations by which it is bound in respect of any Encumbrance created or expressed to be created or evidenced by the Security Documents); and |
(iii) | the New Lender shall become a Party as a "Lender" and will be bound by obligations equivalent to the Relevant Obligations. |
(d) | Lenders may utilise procedures other than those set out in this Clause 23.6 (Procedure for assignment) to assign their rights under the Finance Documents (but not, without the consent of the relevant Security Party or unless in accordance with Clause 23.5 (Procedure for transfer), to obtain a release by that Security Party from the obligations owed to that Security Party by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in Clause 23.2 (Conditions of assignment or transfer). |
23.7 | Copy of Transfer Certificate or Assignment Agreement to Borrower |
24 | CHANGES TO THE SECURITY PARTIES |
24.1 | No assignment or transfer by Security Parties |
25 | ROLE OF THE AGENT, THE SECURITY AGENT AND THE ARRANGER |
25.1 | Appointment of the Agent |
(a) | Each of the Arranger and the Lenders appoints the Agent to act as its agent under and in connection with the Finance Documents and each of the Arranger, the Lenders and the Agent appoints the Security Agent to act as its security agent for the purpose of the Security Documents. |
(b) | Each of the Arranger and the Lenders authorises the Agent and each of the Arranger, the Lenders and the Agent authorises the Security Agent to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Agent or the Security Agent (as the case may be) under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions. |
(c) | The Swap Provider appoints the Security Agent to act as its security agent for the purpose of the Security Documents and authorises the Security Agent to exercise the rights, powers, authorities and discretions specifically given to the Security Agent under or in connection with the Security Documents together with any other incidental rights, powers, authorities and discretions. |
(d) | Except in Clause 25.14 (Replacement of the Agent) or where the context otherwise requires, references in this Clause 25 (Role of the Agent, the Security Agent and the Arranger) to the "Agent" shall mean the Agent and the Security Agent individually and collectively and references in this Clause 25 (Role of the Agent, the Security Agent and the Arranger) to the "Finance Documents" or to any "Finance Document" shall not include the Master Agreement. |
25.2 | Instructions |
(a) | The Agent shall: |
(i) | unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Agent in accordance with any instructions given to it by: |
(A) | all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and |
(B) | in all other cases, the Majority Lenders; and |
(ii) | not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with Clause 25.2(a)(i). |
(b) | The Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Lender or group of Lenders, from that Lender or group of Lenders) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Agent may refrain from acting unless and until it receives any such instructions or clarification that it has requested. |
(c) | Save in the case of decisions stipulated to be a matter for any other Lender or group of Lenders under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties save for the Security Agent. |
(d) | The Agent may refrain from acting in accordance with any instructions of any Lender or group of Lenders until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability which it may incur in complying with those instructions. |
(e) | In the absence of instructions, the Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders. |
(f) | The Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender's consent) in any legal or arbitration proceedings relating to any Finance Document. This Clause 25.2(f) shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Finance Documents or the enforcement of the Finance Documents. |
25.3 | Duties of the Agent |
(a) | The Agent's duties under the Finance Documents are solely mechanical and administrative in nature. |
(b) | Subject to Clause 25.3(c), the Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party. |
(c) | Without prejudice to Clause 23.7 (Copy of Transfer Certificate or Assignment Agreement to Borrower), Clause 25.3(a) shall not apply to any Transfer Certificate or any Assignment Agreement. |
(d) | Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party. |
(e) | If the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the Finance Parties. |
(f) | If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent, the Arranger or the Security Agent) under this Agreement it shall promptly notify the other Finance Parties. |
(g) | The Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied). |
25.4 | Role of the Arranger |
25.5 | No fiduciary duties |
(a) | Subject to Clause 25.12 (Trust) which relates to the Security Agent only, nothing in any Finance Document constitutes the Agent or the Arranger as a trustee or fiduciary of any other person. |
(b) | Neither the Agent nor the Arranger shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account. |
25.6 | Business with Security Parties |
25.7 | Rights and discretions of the Agent |
(a) | The Agent may: |
(i) | rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised; |
(ii) | assume that: |
(A) | any instructions received by it from the Majority Lenders, any Lenders or any group of Lenders are duly given in accordance with the terms of the Finance Documents; and |
(B) | unless it has received notice of revocation, that those instructions have not been revoked; and |
(C) | rely on a certificate from any person: |
(1) | as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or |
(2) | to the effect that such person approves of any particular dealing, transaction, step, action or thing, |
(b) | The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders or security agent for the Finance Parties (as the case may be)) that: |
(i) | no Default has occurred (unless it has actual knowledge of a Default arising under Clause 22.1 (Events of Default)); |
(ii) | any right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised; and |
(iii) | any notice or request made by the Borrower (other than a Drawdown Request) is made on behalf of and with the consent and knowledge of all the Security Parties. |
(c) | The Agent may engage and pay for the advice or services of any lawyers, accountants, surveyors or other experts. |
(d) | Without prejudice to the generality of Clause 25.7(c) or Clause 25.7(e), the Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Agent (and so separate from any lawyers instructed by the Lenders) if the Agent in its reasonable opinion deems this to be desirable. |
(e) | The Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying. |
(f) | The Agent may act in relation to the Finance Documents through its officers, employees and agents and the Agent shall not: |
(i) | be liable for any error of judgment made by any such person; or |
(ii) | be bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct, omission or default on the part, of any such person, |
(g) | Unless a Finance Document expressly provides otherwise the Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement. |
(h) | Without prejudice to the generality of Clause 25.7(g), the Agent: |
(i) | may disclose; and |
(ii) | on the written request of the Borrower or the Majority Lenders shall, as soon as reasonably practicable, disclose, |
(i) | Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor the Arranger is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality. |
(j) | The Agent is not obliged to disclose to any Finance Party any details of the rate notified to the Agent by any Lender or the identity of any such Lender for the purpose of Clause 10.2(b) (Market Disruption). |
(k) | Notwithstanding any provision of any Finance Document to the contrary, the Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it. |
25.8 | Responsibility for documentation |
(a) | the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, the Arranger, a Security Party or any other person given in or in connection with any Relevant Document or the transactions contemplated in the Finance Documents; or |
(b) | the legality, validity, effectiveness, adequacy or enforceability of any Relevant Document or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with any Relevant Document; or |
(c) | any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise. |
25.9 | No duty to monitor |
(a) | whether or not any Default has occurred; |
(b) | as to the performance, default or any breach by any Party of its obligations under any Finance Document; or |
(c) | whether any other event specified in any Finance Document has occurred. |
25.10 | Exclusion of liability |
(a) | Without limiting Clause 25.10(b) (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Agent) the Agent shall not be liable (including, without limitation, for negligence or any other category of liability whatsoever) for: |
(i) | any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Finance Document or any Encumbrance created or expressed to be created or evidenced by the Security Documents, unless caused by its gross negligence or wilful misconduct; |
(ii) | exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Finance Document, any Encumbrance created or expressed to be created or evidenced by the Security Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Finance Document or any Encumbrance created or expressed to be created or evidenced by the Security Documents; |
(iii) | any shortfall which arises on the enforcement or realisation of the Trust Property; or |
(iv) | without prejudice to the generality of Clauses 25.10(a)(i), 25.10(a)(ii) and 25.10(a)(iii), any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of: |
(A) | any act, event or circumstance not reasonably within its control; or |
(B) | the general risks of investment in, or the holding of assets in, any jurisdiction, |
(b) | No Party (other than the Agent) may take any proceedings against any officer, employee or agent of the Agent in respect of any claim it might have against the Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Relevant Document and any officer, employee or agent of the Agent may rely on this Clause subject to Clause 1.7 (Third party rights) and the provisions of the Third Parties Act. |
(c) | The Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Agent if the Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Agent for that purpose. |
(d) | Nothing in this Agreement shall oblige the Agent or the Arranger to carry out: |
(i) | any "know your customer" or other checks in relation to any person; |
(ii) | any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Lender, |
(e) | Without prejudice to any provision of any Finance Document excluding or limiting the Agent's liability, any liability of the Agent arising under or in connection with any Finance Document or any Encumbrance created or expressed to be created or evidenced by the Security Documents shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Agent or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Agent at any time which increase the amount of that loss. In no event shall the Agent be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Agent has been advised of the possibility of such loss or damages. |
25.11 | Lenders' indemnity to the Agent |
(a) | Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Agent and every Receiver and Delegate, within three Business Days of demand, against any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by any of them (otherwise than by reason of the relevant Agent's, Receiver's or Delegate's gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 28.12 (Disruption to payment systems etc.) notwithstanding the Agent's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) in acting as Agent, Receiver or Delegate under, or exercising any authority conferred under, the Finance Documents (unless the relevant Agent, Receiver or Delegate has been reimbursed by a Security Party pursuant to a Finance Document). |
(b) | Subject to Clause 25.11(c), the Borrower shall immediately on demand reimburse any Lender for any payment that Lender makes to the Agent pursuant to Clause 25.11(a) |
(c) | Clause 25.11(b) shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Agent to a Security Party. |
25.12 | Trust |
(a) | the Security Agent and any Delegate may indemnify itself or himself out of the Trust Property against all liabilities, costs, fees, damages, charges, losses and expenses sustained or incurred by it or him in relation to the taking or holding of any of the Trust Property or in connection with the exercise or purported exercise of the rights, trusts, powers and discretions vested in the Security Agent or any Delegate by or pursuant to the Security Documents or in respect of anything else done or omitted to be done in any way relating to the Security Documents; |
(b) | the other Finance Parties acknowledge that the Security Agent shall be under no obligation to insure any property nor to require any other person to insure any property and shall not be responsible for any loss which may be suffered by any person as a result of the lack or insufficiency of any insurance; |
(c) | the Finance Parties agree that the perpetuity period applicable to the trusts declared by this Agreement shall be the period of 125 years from the date of this Agreement; |
(d) | the Security Agent shall not be liable for any failure, omission, or defect in perfecting the security constituted or created by any Finance Document including, without limitation, any failure to register the same in accordance with the provisions of any of the documents of title of any Security Party to any of the assets thereby charged or effect or procure registration of or otherwise protect the security created by any Security Document under any registration laws in any jurisdiction and may accept without enquiry such title as any Security Party may have to any asset; |
(e) | the Security Agent shall not be under any obligation to hold any title deed, Finance Document or any other documents in connection with the Finance Documents or any other documents in connection with the property charged by any Finance Document or any other such security in its own possession or to take any steps to protect or preserve the same, and may permit any Security Party to retain all such title deeds, Finance Documents and other documents in its possession; and |
(f) | save as otherwise provided in the Finance Documents, all moneys which under the trusts therein contained are received by the Security Agent may be invested in the name of or under the control of the Security Agent in any investment for the time being authorised by English law for the investment by trustees of trust money or in any other investments which may be selected by the Security Agent, and the same may be placed on deposit in the name of or under the control of the Security Agent at such bank or institution (including the Security Agent) and upon such terms as the Security Agent may think fit. |
25.13 | Resignation of the Agent |
(a) | The Agent may resign and appoint one of its Affiliates acting through an office in the United Kingdom as successor by giving 30 days' prior written notice to the other Finance Parties and the Borrower. |
(b) | Alternatively the Agent may resign by giving 30 days' prior written notice to the other Finance Parties and the Borrower, in which case the Majority Lenders (after prior consultation and agreement with the Borrower) may appoint a successor Agent. |
(c) | If the Majority Lenders have not appointed a successor Agent in accordance with Clause 25.13(a) within 20 days after notice of resignation was given, the retiring Agent (after consultation with the Borrower) may appoint a successor Agent (acting through an office in the United Kingdom). |
(d) | If the Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent and the Agent is entitled to appoint a successor Agent under Clause 25.13(b), the Agent may (if it concludes (acting reasonably) that it is necessary to do so in order to persuade the proposed successor Agent to become a party to this Agreement as Agent) agree with the proposed successor Agent amendments to this Clause 25 (Role of the Agent, the Security Agent and the Arranger) and any other term of this Agreement dealing with the rights or obligations of the Agent consistent with then current market practice for the appointment and protection of corporate trustees together with any reasonable amendments to the agency fee payable under this Agreement which are consistent with the successor Agent's normal fee rates and those amendments will bind the Parties. |
(e) | The retiring Agent shall, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents. The Borrower shall, within three Business Days of demand, reimburse the retiring Agent for the amount of all costs and expenses (including legal fees) properly incurred by it in making available such documents and records and providing such assistance. |
(f) | The Agent's resignation notice shall only take effect upon the appointment of a successor and (in the case of the Security Agent) the transfer of all the Trust Property to that successor. |
(g) | Upon the appointment of a successor, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under Clause 25.13(e)) but shall remain entitled to the benefit of Clause 14.3 (Indemnity to the Agent) and this Clause 25 (Role of the Agent, the Security Agent and the Arranger) (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date). Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party. |
(h) | The Agent shall resign in accordance with Clause 25.13(a) (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Agent pursuant to Clause 25.13(b)) if on or after the date which is three months before the earliest FATCA Application Date relating to any payment to the Agent under the Finance Documents, either: |
(i) | the Agent fails to respond to a request under Clause 12.8 (FATCA information) and the Borrower or a Lender reasonably believes that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; |
(ii) | the information supplied by the Agent pursuant to Clause 12.8 (FATCA information) indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or |
(iii) | the Agent notifies the Borrower and the Lenders that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; |
25.14 | Replacement of the Agent |
(a) | After consultation with the Borrower, the Majority Lenders may, by giving 30 days' notice to the Agent (or, at any time the Agent is an Impaired Agent, by giving any shorter notice determined by the Majority lenders) replace the Agent by appointing a successor Agent (acting through an office in the United Kingdom). |
(b) | The retiring Agent shall (at its own cost if it is an Impaired Agent and otherwise at the expense of the Lenders) make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its function as Agent under the Finance Documents. |
(c) | The appointment of the successor Agent shall take effect on the date specified in the notice from the Majority Lenders to the retiring Agent. As from this date, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under Clause 25.14(b)) but shall remain entitled to the benefit of Clause 14.3 (Indemnity to the Agent) and this Clause 25 (Role of the Agent, the Security Agent and the Arranger) (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date). |
(d) | Any successor Agent and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party. |
25.15 | Confidentiality |
(a) | In acting as agent for the Finance Parties, the Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments. |
(b) | If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent shall not be deemed to have notice of it. |
25.16 | Relationship with the Lenders |
(a) | The Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Agent's principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office: |
(i) | entitled to or liable for any payment due under any Finance Document on that day; and |
(ii) | entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day, |
(b) | Any Lender may by notice to the Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or dispatched to that Lender under the Finance Documents. Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under Clause 30.6 (Electronic communication)) electronic mail address and/or any other information required to enable the sending and receipt of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic mail address, department and officer by that Lender for the purposes of Clause 30.2 (Addresses) and Clause 30.6(a)(ii) (Electronic communication) and the Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender. |
25.17 | Credit appraisal by the Lenders |
(a) | the financial condition, status and nature of each Security Party and each other member of the Group; |
(b) | the legality, validity, effectiveness, adequacy or enforceability of any Relevant Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Relevant Document; |
(c) | whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Relevant Document, the transactions contemplated by the Relevant Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of under or in connection with any Relevant Document; |
(d) | the right or title of any person in or to, or the value or sufficiency of any part of the Charged Property, the priority of any Encumbrance created or expressed to be created or evidenced by the Security Documents or the existence of any Encumbrance affecting the Charged Property. |
25.18 | Reference Banks |
25.19 | Deduction from amounts payable by the Agent |
26 | CONDUCT OF BUSINESS BY THE FINANCE PARTIES |
(a) | interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit; |
(b) | oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or |
(c) | other than where expressly provided for, oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax. |
27 | SHARING AMONG THE FINANCE PARTIES |
27.1 | Payments to Finance Parties |
(a) | the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Agent; |
(b) | the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in accordance with Clause 28 (Payment Mechanics), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and |
(c) | the Recovering Finance Party shall, within three Business Days of demand by the Agent, pay to the Agent an amount (the "Sharing Payment") equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 28.6 (Partial payments). |
27.2 | Redistribution of payments |
27.3 | Recovering Finance Party's rights |
27.4 | Reversal of redistribution |
(a) | each Sharing Finance Party shall, upon request of the Agent, pay to the Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the "Redistributed Amount"); and |
(b) | as between the relevant Security Party and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Security Party. |
27.5 | Exceptions |
(a) | This Clause 27 (Sharing among the Finance Parties) shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Security Party. |
(b) | A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if: |
(i) | it notified that other Finance Party of the legal or arbitration proceedings; and |
(ii) | that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings. |
28 | PAYMENT MECHANICS |
28.1 | Payments to the Agent |
28.2 | Distributions by the Agent |
28.3 | Distributions to a Security Party |
28.4 | Clawback and pre-funding |
(a) | Where a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum. |
(b) | Unless Clause 28.4(c) applies, if the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds. |
(c) | If the Agent has notified the Lenders that it is willing to make available amounts for the account of the Borrower before receiving funds from the Lenders then if and to the extent that the Agent does so but it proves to be the case that it does not then receive funds from a Lender in respect of a sum which it paid to the Borrower: |
(i) | the Agent shall notify the Borrower of that Lender's identity and the Borrower shall on demand refund it to the Agent; and |
(ii) | the Lender by whom those funds should have been made available or, if that Lender fails to do so, the Borrower, shall on demand pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender. |
28.5 | Impaired Agent |
(a) | If, at any time, the Agent becomes an Impaired Agent, a Security Party or a Lender which is required to make a payment under the Finance Documents to the Agent in accordance with Clause 28.1 (Payments to the Agent) may instead either: |
(i) | pay that amount direct to the required recipient(s); or |
(ii) | if in its absolute discretion it considers that it is not reasonably practicable to pay that amount direct to the required recipient(s), pay that amount or the relevant part of that amount to an interest-bearing account held with an Acceptable Bank in relation to which no Insolvency Event has occurred and is continuing, in the name of the Security Party or the Lender making the payment (the "Paying Party") and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents (the "Recipient Party" or "Recipient Parties"). |
(b) | All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the Recipient Party or the Recipient Parties pro rata to their respective entitlements. |
(c) | A Party which has made a payment in accordance with this Clause 28.5 (Impaired Agent) shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account. |
(d) | Promptly upon the appointment of a successor Agent in accordance with Clause 25.14 (Replacement of the Agent), each Paying Party shall (other than to the extent that that Party has given an instruction pursuant to Clause 28.5(e)) give all requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the successor Agent for distribution to the relevant Recipient Party or Recipient Parties in accordance with Clause 28.2 (Distributions by the Agent). |
(e) | A Paying Party shall, promptly upon request by a Recipient Party and to the extent: |
(i) | that it has not given an instruction pursuant to Clause 28.5(d); and |
(ii) | that it has been provided with the necessary information by that Recipient Party, |
28.6 | Partial payments |
(a) | If the Agent receives a payment that is insufficient to discharge all the amounts then due and payable by a Security Party under the Finance Documents, the Agent shall apply that payment towards the obligations of that Security Party under the Finance Documents in the following order: |
(i) | first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent or the Security Agent under the Finance Documents; |
(ii) | secondly, in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under this Agreement; |
(iii) | thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and |
(iv) | fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents. |
(b) | The Agent shall, if so directed by the Majority Lenders, vary the order set out in Clauses 28.6(a)(ii) to 28.6(a)(iv). |
(c) | Clauses 28.6(a) and 28.6(b) will override any appropriation made by a Security Party. |
28.7 | No set-off by Security Parties |
28.8 | Business Days |
28.9 | Currency of account |
(a) | Subject to Clauses 28.9(b) to 28.9(e), dollars is the currency of account and payment for any sum due from a Security Party under any Finance Document. |
(b) | A repayment or payment of all or part of a Loan or an Unpaid Sum shall be made in the currency in which that Loan or Unpaid Sum is denominated on its due date. |
(c) | Each payment of interest shall be made in the currency in which the sum in respect of which the interest is payable was denominated when that interest accrued. |
(d) | Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred. |
(e) | Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency. |
28.10 | Control account |
28.11 | Change of currency |
(a) | Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then: |
(i) | any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Agent (after consultation with the Borrower); and |
(ii) | any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Agent (acting reasonably). |
(b) | If a change in any currency of a country occurs, this Agreement will, to the extent the Agent (acting reasonably and after consultation with the Borrower) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Interbank Market and otherwise to reflect the change in currency. |
28.12 | Disruption to payment systems etc. |
(a) | the Agent may, and shall if requested to do so by the Borrower, consult with the Borrower with a view to agreeing with the Borrower such changes to the operation or administration of the Loan as the Agent may deem necessary in the circumstances; |
(b) | the Agent shall not be obliged to consult with the Borrower in relation to any changes mentioned in Clause 28.12(a) if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to any such changes; |
(c) | the Agent may consult with the Finance Parties in relation to any changes mentioned in Clause 28.12(a) but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances; |
(d) | any such changes agreed upon by the Agent and the Borrower shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of Clause 34 (Amendments and Waivers); |
(e) | the Agent shall not be liable for any damages, costs or losses whatsoever (including, without limitation, for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause 28.12 (Disruption to payment systems etc.); and |
(f) | the Agent shall notify the Finance Parties of all changes agreed pursuant to Clause 28.12(d) |
29 | SET-OFF |
29.1 | Set-off |
29.2 | Master Agreement rights |
30 | NOTICES |
30.1 | Communications in writing |
30.2 | Addresses |
(a) | in the case of the Borrower, that identified with its name below; |
(b) | in the case of each Lender, that notified in writing to the Agent on or prior to the date on which it becomes a Party; |
(c) | in the case of the Swap Provider, that identified with its name below; and |
(d) | in the case of the Agent or the Security Agent, that identified with its name below, |
30.3 | Delivery |
(a) | if by way of fax, when received in legible form; or |
(b) | if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address; |
30.4 | Notification of address and fax number |
30.5 | Communication when Agent is Impaired Agent |
30.6 | Electronic communication |
(a) | Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted form of communication and if those two Parties: |
(i) | notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and |
(ii) | notify each other of any change to their address or any other such information supplied by them by not less than five Business Days' notice. |
(b) | Any electronic communication made between those two Parties will be effective only when actually received in readable form and in the case of any electronic communication made by a Party to the Agent or the Security Agent only if it is addressed in such a manner as the Agent or the Security Agent shall specify for this purpose. |
(c) | Any electronic communication which becomes effective, in accordance with Clause 30.6(b), after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day. |
30.7 | Use of websites |
(a) | The Borrower may satisfy its obligations under this Agreement to deliver any information in relation to those Lenders (the "Website Lenders") who accept this method of communication by posting this information onto an electronic website designated by the Borrower and the Agent (the "Designated Website") if: |
(i) | the Agent expressly agrees (after consultation with each of the Lenders) that it will accept communication of the information by this method; |
(ii) | both the Borrower and the Agent are aware of the address of and any relevant password specifications for the Designated Website; and |
(iii) | the information is in a format previously agreed between the Borrower and the Agent. |
(b) | The Agent shall supply each Website Lender with the address of and any relevant password specifications for the Designated Website following designation of that website by the Borrower and the Agent. |
(c) | The Borrower shall promptly upon becoming aware of its occurrence notify the Agent if: |
(i) | the Designated Website cannot be accessed due to technical failure; |
(ii) | the password specifications for the Designated Website change; |
(iii) | any new information which is required to be provided under this Agreement is posted onto the Designated Website; |
(iv) | any existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or |
(v) | the Borrower becomes aware that the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software. |
(d) | Any Website Lender may request, through the Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the Designated Website. The Borrower shall comply with any such request within ten Business Days. |
(e) | The Borrower shall be liable for any cost incurred by the Agent or any Website Lender under this Clause. |
30.8 | English language |
(a) | in English; or |
(b) | if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document. |
31 | CALCULATIONS AND CERTIFICATES |
31.1 | Accounts |
31.2 | Certificates and determinations |
31.3 | Day count convention |
32 | PARTIAL INVALIDITY |
33 | REMEDIES AND WAIVERS |
34 | AMENDMENTS AND WAIVERS |
34.1 | Required consents |
(a) | Subject to Clause 34.2 (Exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Borrower and any such amendment or waiver will be binding on all Parties. |
(b) | The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause 34 (Amendments and Waivers). |
(c) | Without prejudice to the generality of Clauses 25.7(c), 25.7(d) and 25.7(e) (Rights and discretions of the Agent), the Agent may engage, pay for and rely on the services of lawyers in determining the consent level required for and effecting any amendment, waiver or consent under this Agreement. |
34.2 | Exceptions |
(a) | An amendment, waiver or (in the case of a Security Document) a consent of, or in relation to, any term of any Finance Document that has the effect of changing or which relates to: |
(i) | the definition of "Majority Lenders" in Clause 1.1 (Definitions); |
(ii) | an extension to the date of payment of any amount under the Finance Documents; |
(iii) | a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable; |
(iv) | a change in currency of payment of any amount under the Finance Documents; |
(v) | an increase in any Commitment, an extension of the Availability Period or any requirement that a cancellation of Commitments reduces the Commitments of the Lenders rateably; |
(vi) | any provision which expressly requires the consent of all the Lenders; |
(vii) | Clause 2.2 (Finance Parties' rights and obligations), Clause 23 (Changes to the Lenders), this Clause 34 (Amendments and Waivers), Clause 38 (Governing Law) or Clause 39.1 (Jurisdiction of English courts); |
(viii) | (other than as expressly permitted by the provisions of any Finance Document) the nature or scope of: |
(A) | any Guarantee; |
(B) | the Charged Property; or |
(C) | the manner in which the proceeds of enforcement of the Security Documents are distributed; or |
(ix) | the release of any Guarantee or of any Encumbrance created or expressed to be created or evidenced by the Security Documents unless permitted under this Agreement or any other Finance Document or relating to a sale or disposal of an asset which is the subject of any Encumbrance created or expressed to be created or evidenced by the Security Documents where such sale or disposal is expressly permitted under this Agreement or any other Finance Document; |
(b) | An amendment or waiver which relates to the rights or obligations of the Agent, the Security Agent or the Arranger (each in their capacity as such) may not be effected without the consent of the Agent, the Security Agent or, as the case may be, the Arranger. |
34.3 | Replacement of Lender |
(a) | If the Borrower or any other Security Party becomes obliged to repay any amount in accordance with Clause 7.1 (Illegality) or to pay additional amounts pursuant to Clause 12.2 (Tax gross-up), Clause 12.3 (Tax indemnity) or Clause 13.1 (Increased costs) to any Lender: then the Borrower may, on five Business Days' prior written notice to the Agent and such Lender, replace such Lender by requiring such Lender to (and, to the extent permitted by law, such Lender shall) transfer pursuant to Clause 23 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial institution, trust, fund or other entity (a "Replacement Lender") selected by the Borrower, which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with Clause 23 (Changes to the Lenders) for a purchase price in cash payable at the time of transfer in an amount equal to the outstanding principal amount of such Lender's participation in the outstanding Loan and all accrued interest, Break Costs and other amounts payable in relation thereto under the Finance Documents. |
(b) | The replacement of a Lender pursuant to this Clause 34.3 (Replacement of Lender) shall be subject to the following conditions: |
(i) | the Borrower shall have no right to replace the Agent or Security Agent; |
(ii) | neither the Agent nor the Lender shall have any obligation to the Borrower to find a Replacement Lender; |
(iii) | in no event shall the Lender replaced under this Clause 34.3 (Replacement of Lender) be required to pay or surrender to such Replacement Lender any of the fees received by such Lender pursuant to the Finance Documents; and |
(iv) | the Lender shall only be obliged to transfer its rights and obligations pursuant to Clause 34.3 (Replacement of Lender) once it is satisfied that it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to that transfer. |
(c) | A Lender shall perform the checks described in Clause 34.3(b)(iv) as soon as reasonably practicable following delivery of a notice referred to in Clause 34.3 (Replacement of Lender) and shall notify the Agent and the Borrower when it is satisfied that it has complied with those checks. |
34.4 | Disenfranchisement of Defaulting Lenders |
(a) | For so long as a Defaulting Lender has any Commitment, in ascertaining: |
(i) | the Majority Lenders; or |
(ii) | whether: |
(A) | any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments; or |
(B) | the agreement of any specified group of Lenders, |
(b) | For the purposes of this Clause 34.4 (Disenfranchisement of Defaulting Lenders), the Agent may assume that the following Lenders are Defaulting Lenders: |
(i) | any Lender which has notified the Agent that it has become a Defaulting Lender; |
(ii) | any Lender in relation to which it is aware that any of the events or circumstances referred to in (a), (b) or (c) of the definition of "Defaulting Lender" has occurred, |
34.5 | Replacement of a Defaulting Lender |
(a) | The Borrower may, at any time a Lender has become and continues to be a Defaulting Lender, by giving ten Business Days' prior written notice to the Agent and such Lender, replace such Lender by requiring such Lender to (and, to the extent permitted by law, such Lender shall) transfer pursuant to Clause 23 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial institution, trust, fund or other entity (a "Replacement Lender") selected by the Borrower which confirms its willingness to assume and does assume all the obligations, or all the relevant obligations, of the transferring Lender in accordance with Clause 23 (Changes to the Lenders) for a purchase price in cash payable at the time of transfer which is either: |
(i) | in an amount equal to the outstanding principal amount of such Lender's participation in the outstanding Loan and all accrued interest, Break Costs and other amounts payable in relation thereto under the Finance Documents; or |
(ii) | in an amount agreed between that Defaulting Lender, the Replacement Lender and the Borrower and which does not exceed the amount described in (a). |
(b) | Any transfer of rights and obligations of a Defaulting Lender pursuant to this Clause 34.5 (Replacement of a Defaulting Lender) shall be subject to the following conditions: |
(i) | the Borrower shall have no right to replace the Agent or Security Agent; |
(ii) | neither the Agent nor the Defaulting Lender shall have any obligation to the Borrower to find a Replacement Lender; |
(iii) | the transfer must take place no later than 7 days after the notice referred to in Clause 34.5(a); |
(iv) | in no event shall the Defaulting Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Defaulting Lender pursuant to the Finance Documents; and |
(v) | the Defaulting Lender shall only be obliged to transfer its rights and obligations pursuant to Clause 34.5(a) once it is satisfied that it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to that transfer to the Replacement Lender. |
(c) | The Defaulting Lender shall perform the checks described in Clause 34.5(b)(v) as soon as reasonably practicable following delivery of a notice referred to in Clause 34.5(a) and shall notify the Agent and the Borrower when it is satisfied that it has complied with those checks. |
35 | CONFIDENTIALITY |
35.1 | Confidential Information |
35.2 | Disclosure of Confidential Information |
(a) | to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this Clause 35.2(a) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information; |
(b) | to any person: |
(i) | to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Agent or Security Agent and, in each case, to any of that person's Affiliates, Related Funds, Representatives and professional advisers; |
(ii) | with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Security Parties and to any of that person's Affiliates, Related Funds, Representatives and professional advisers; |
(iii) | appointed by any Finance Party or by a person to whom Clause 35.2(b)(i) or 35.2(b)(ii) applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under Clause 25.16(b) (Relationship with the Lenders)); |
(iv) | who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in Clause 35.2(b)(i) or 35.2(b)(ii); |
(v) | to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation; |
(vi) | to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes; |
(vii) | who is a Party; or |
(viii) | with the consent of the Borrower; |
(A) | in relation to Clauses 35.2(b)(i), 35.2(b)(ii) and 35.2(b)(iii), the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information; |
(B) | in relation to Clause 35.2(b)(iv), the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information; |
(C) | in relation to Clauses 35.2(b)(v), 35.2(b)(vi), the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances; and |
(c) | to any person appointed by that Finance Party or by a person to whom Clause 35.2(b)(i) or 35.2(b)(ii) applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this Clause 35.2(c) if the service provider to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking; and |
(d) | to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Security Parties and/or the Group. |
35.3 | Disclosure to numbering service providers |
(a) | Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Loan and/or one or more Security Parties the following information: |
(i) | names of Security Parties; |
(ii) | country of domicile of Security Parties; |
(iii) | place of incorporation of Security Parties; |
(iv) | date of this Agreement; |
(v) | Clause 38 (Governing Law); |
(vi) | the names of the Agent and the Arranger; |
(vii) | date of each amendment and restatement of this Agreement; |
(viii) | amount of Total Commitments; |
(ix) | currencies of the Loan; |
(x) | type of Loan; |
(xi) | ranking of the Loan; |
(xii) | Termination Date; |
(xiii) | changes to any of the information previously supplied pursuant to (i) to (xii); and |
(xiv) | such other information agreed between such Finance Party and that Security Party, |
(b) | The Parties acknowledge and agree that each identification number assigned to this Agreement, the Loan and/or one or more Security Parties by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider. |
(c) | The Borrower represents that none of the information set out in Clauses 35.3(a)(i) to 35.3(a)(xiv) is, nor will at any time be, unpublished price-sensitive information. |
(d) | The Agent shall notify the Borrower and the other Finance Parties of: |
(i) | the name of any numbering service provider appointed by the Agent in respect of this Agreement, the Loan and/or one or more Security Parties; and |
(ii) | the number or, as the case may be, numbers assigned to this Agreement, the Loan and/or one or more Security Parties by such numbering service provider. |
35.4 | Entire agreement |
35.5 | Inside information |
35.6 | Notification of disclosure |
(a) | of the circumstances of any disclosure of Confidential Information made pursuant to Clause 35.2(b)(v) (Disclosure of Confidential Information) except where such disclosure is made to any of the persons referred to in that Clause during the ordinary course of its supervisory or regulatory function; and |
(b) | upon becoming aware that Confidential Information has been disclosed in breach of this Clause 35 (Confidentiality). |
35.7 | Continuing obligations |
36 | DISCLOSURE OF LENDER DETAILS BY AGENT |
36.1 | Supply of Lender details to Borrower |
36.2 | Supply of Lender details at Borrower's direction |
(a) | The Agent shall, at the request of the Borrower, disclose the identity of the Lenders and the details of the Lenders' Commitments to any: |
(i) | other Party or any other person if that disclosure is made to facilitate, in each case, a refinancing of the Financial Indebtedness arising under the Finance Documents or a material waiver or amendment of any term of any Finance Document; and |
(ii) | Security Party. |
(b) | Subject to Clause 36.2(c), the Borrower shall procure that the recipient of information disclosed pursuant to Clause 36.2(a) shall keep such information confidential and shall not disclose it to anyone and shall ensure that all such information is protected with security measures and a degree of care that would apply to the recipient's own confidential information. |
(c) | The recipient may disclose such information to any of its officers, directors, employees, professional advisers, auditors and partners as it shall consider appropriate if any such person is informed in writing of its confidential nature, except that there shall be no such requirement to so inform if that person is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by duties of confidentiality in relation to the information. |
36.3 | Supply of Lender details to other Lenders |
(a) | If a Lender (a "Disclosing Lender") indicates to the Agent that the Agent may do so, the Agent shall disclose that Lender's name and Commitment to any other Lender that is, or becomes, a Disclosing Lender. |
(b) | The Agent shall, if so directed by the Requisite Lenders, request each Lender to indicate to it whether it is a Disclosing Lender. |
36.4 | Lender enquiry |
(a) | that entity ceases to have an Investment Grade Rating; or |
(b) | an Insolvency Event occurs in relation to that entity, |
36.5 | Lender details definitions |
36.6 | Consent to publication |
37 | COUNTERPARTS |
38 | GOVERNING LAW |
39 | ENFORCEMENT |
39.1 | Jurisdiction of English courts |
39.2 | Service of process |
(a) | Without prejudice to any other mode of service allowed under any relevant law, the Borrower: |
(i) | irrevocably appoints Mr. John Georgiou, 42 Marble Drive, London, NW2 1XA, England (tel/fax: +44 208 361 2606) as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and |
(ii) | agrees that failure by a process agent to notify the Borrower of the process will not invalidate the proceedings concerned. |
(b) | If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process or terminates its appointment as agent for service of process, the Borrower must immediately (and in any event within five days of such event taking place) appoint another agent on terms acceptable to the Agent. Failing this, the Agent may appoint another agent for this purpose. |
40 | BAIL-IN |
(a) | any Bail-In Action in relation to any such liability, including (without limitation): |
(i) | a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability; |
(ii) | a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and |
(iii) | a cancellation of any such liability; and |
(b) | a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability. |
Name of Original Lender | Commitment | Treaty Passport scheme reference number and jurisdiction of residence |
DNB (UK) Limited 8th Floor The Walbrook Building 25 Walbrook London EC4N 8AF, England | 100% | DDTP NUMBER: 58/D/305668/DTTP England |
1 | SECURITY PARTIES |
1.1 | Constitutional documents |
1.2 | Certificates of good standing |
1.3 | Board resolutions |
(a) | approving the terms of, and the transactions contemplated by, the Finance Documents to which it is a party and resolving that it execute those Finance Documents; and |
(b) | authorising a specified person or persons to execute those Relevant Documents (and all documents and notices to be signed and/or dispatched under those documents) on its behalf. |
1.4 | Copy passports |
1.5 | Shareholder resolutions |
1.6 | Officer's certificates |
(a) | certifying that each copy document relating to it specified in this Part I of Schedule 2 is correct, complete and in full force and effect; |
(b) | setting out the names of the directors, officers and shareholders of that Security Party and the proportion of shares held by each shareholder; and |
(c) | confirming that borrowing or guaranteeing or securing, as appropriate, the Loan would not cause any borrowing, guarantee, security or similar limit binding on that Security Party to be exceeded. |
1.7 | Evidence of registration |
1.8 | Powers of attorney |
2 | SECURITY AND RELATED DOCUMENTS |
2.1 | Vessel documents |
(a) | any charterparty or other contract of employment of the Vessels which will be in force on the Drawdown Date; |
(b) | the Management Agreements in respect of the Vessels; |
(c) | the Vessels' current Safety Construction, Safety Equipment, Safety Radio Oil Pollution Prevention and Load Line Certificates; |
(d) | evidence of the Vessel's current Certificate of Financial Responsibility issued pursuant to the United States Oil Pollution Act 1990; |
(e) | the Vessels' current SMC; |
(f) | the ISM Company's current DOC; |
(g) | the Vessels' current ISSC; |
(h) | the Vessels' current IAPPC; |
(i) | the Vessels' current Tonnage Certificate; |
2.2 | Evidence of Collateral Owner's title |
2.3 | Evidence of insurance |
2.4 | Confirmation of class |
2.5 | Valuation |
2.6 | Security Documents |
2.7 | Mandates |
2.8 | No disputes |
2.9 | Account Holder's confirmation |
2.10 | Master Agreement |
2.11 | Other Relevant Documents |
3 | LEGAL OPINIONS |
3.1 | a legal opinion of Watson Farley & Williams, legal advisers to the Agent as to English law substantially in the form distributed to the Lenders prior to signing this Agreement; |
3.2 | a legal opinion of the following legal advisers to the Agent: |
(a) | Watson Farley & Williams, as to Liberian law; and |
(b) | Watson Farley & Williams, as to Marshall Islands law; |
(c) | Chrysses Demetriades & Co. LLC, as to Cypriot law; |
(d) | Arias B. & Associates, as to Panamanian law; and |
4 | OTHER DOCUMENTS AND EVIDENCE |
4.1 | Drawdown Request |
4.2 | Process agent |
4.3 | Other Authorisations |
4.4 | Financial statements |
4.5 | Fees |
4.6 | "Know your customer" documents |
4.7 | Side LetterF |
4.8 | Amount in the Earnings Accounts |
1 | LETTERS OF UNDERTAKING |
2 | ACKNOWLEDGEMENTS OF NOTICES |
3 | LEGAL OPINIONS |
4 | COMPANIES ACT REGISTRATIONS |
5 | MASTER'S RECEIPT |
6 | MORTGAGEE'S INSURANCES FEES |
7 | OFFICER'S CERTIFICATE |
8 | SECURITY AND RELATED DOCUMENTS |
8.1 | Vessel documents |
(a) | the builder's certificate and/or bill of sale transferring title in the Newbuilding Vessel to the Collateral Owner free of all encumbrances, maritime liens or other debts; |
(b) | the protocol of delivery and acceptance evidencing the unconditional physical delivery of the Newbuilding Vessel by the Builder to the Collateral Owner pursuant to the Building Contract; |
(c) | the commercial invoice issued by the Builder in respect of the final contract price of the Newbuilding Vessel; |
(d) | the declaration of warranty issued by the Builder to the Collateral Owner pursuant to the Building Contract; |
(e) | any charterparty or other contract of employment of the Newbuilding Vessel which will be in force on the Delivery Date; |
(f) | the Management Agreements; |
(g) | the Vessel's current Safety Construction, Safety Equipment, Safety Radio and Load Line Certificates; |
(h) | evidence of the Vessel's current Certificate of Financial Responsibility issued pursuant to the United States Oil Pollution Act 1990; |
(i) | the Vessel's current SMC, or an application form submitted by the Borrower; |
(j) | the ISM Company's current DOC; |
(k) | the Vessel's current ISSC, or an application form submitted by the Borrower; |
(l) | the Vessel's current IAPPC, or any application form submitted by the Borrower; |
(m) | the Vessel's current Tonnage Certificate; |
8.2 | Evidence of Collateral Owner's title |
8.3 | Evidence of insurance |
8.4 | Confirmation of class |
8.5 | Survey report |
8.6 | Valuation |
8.7 | Security Documents |
8.8 | Mandates |
8.9 | Account Holder's confirmation |
8.10 | Other Relevant Documents |
9 | LEGAL OPINIONS |
9.1 | a legal opinion of Watson Farley & Williams, legal advisers to the Agent as to English law substantially in the form distributed to the Lenders prior to signing this Agreement; |
9.2 | a legal opinion of the following legal advisers to the Agent: |
(a) | Watson Farley & Williams, as to Liberian law; and |
(b) | Watson Farley & Williams, as to Marshall Islands law; |
(c) | Chrysses Demetriades & Co. LLC, as to Cypriot law; |
(d) | Arias B. & Associates, as to Panamanian law; and |
10 | OTHER DOCUMENTS AND EVIDENCE |
10.1 | Process agent |
10.2 | Other Authorisations |
10.3 | Fees |
11 | EVIDENCE OF COLLATERAL OWNER'S TITLE |
12 | LETTERS OF UNDERTAKING |
13 | ACKNOWLEDGEMENTS OF NOTICES |
14 | LEGAL OPINIONS |
15 | COMPANIES ACT REGISTRATIONS |
16 | MASTER'S RECEIPT |
17 | MORTGAGEE'S INSURANCES FEES |
18 | SAFETY MANAGEMENT CERTIFICATE |
19 | INTERNATIONAL SHIP SECURITY CERTIFICATE |
20 | INTERNATIONAL AIR POLLUTION PREVENTION CERTIFICATE |
1 | We refer to the Agreement. This is a Drawdown Request. Terms defined in the Agreement have the same meaning in this Drawdown Request unless given a different meaning in this Drawdown Request. |
2 | We wish to [make a Drawing under the Term Loan Facility] [draw down the Loan] on the following terms: |
3 | We confirm that each condition specified in Clause 4.2 (Further conditions precedent) is satisfied on the date of this Drawdown Request. |
4 | The proceeds of the [Drawing][Loan] should be credited to [account] [towards repayment in full of the [l]. |
5 | This Drawdown Request is irrevocable. |
1 | We refer to the Loan Agreement. This agreement (the "Agreement") shall take effect as a Transfer Certificate for the purposes of the Loan Agreement. Terms defined in the Loan Agreement have the same meaning in this Agreement unless given a different meaning in this Agreement. |
2 | We refer to Clause 23.5 (Procedure for transfer) of the Loan Agreement: |
(a) | The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation and in accordance with Clause 23.5 (Procedure for transfer) all of the Existing Lender's rights and obligations under the Loan Agreement and the other Finance Documents which relate to that portion of the Existing Lender's Commitment(s) and participations in the Loan under the Loan Agreement as specified in the Schedule. |
(b) | The proposed Transfer Date is [l]. |
(c) | The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 30.2 (Addresses) are set out in the Schedule. |
3 | The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in Clause 23.4(a)(iii) (Limitation of responsibility of Existing Lenders). |
4 | The New Lender confirms, for the benefit of the Agent and without liability to any Security Party, that it is: |
(a) | [a Qualifying Lender other than a Treaty Lender;] |
(b) | [a Treaty Lender;] |
(c) | [not a Qualifying Lender]. |
(a) | a company resident in the United Kingdom for United Kingdom tax purposes; |
(b) | a partnership each member of which is: |
(i) | a company so resident in the United Kingdom; or |
(ii) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or |
(c) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.] |
[5] | [The New Lender confirms that it holds a passport under the HMRC DT Treaty Passport scheme (reference number [l]) and is tax resident in [l], so that interest payable to it by borrowers is generally subject to full exemption from UK withholding tax, and requests that the Agent notify the Borrower that it wishes that scheme to apply to the Agreement.] |
[6] | This Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement. |
[7] | This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law. |
1 | We refer to the Loan Agreement. This is an Assignment Agreement. This agreement (the "Agreement") shall take effect as an Assignment Agreement for the purpose of the Loan Agreement. Terms defined in the Loan Agreement have the same meaning in this Agreement unless given a different meaning in this Agreement. |
2 | We refer to Clause 23.6 (Procedure for assignment) of the Loan Agreement: |
(a) | The Existing Lender assigns absolutely to the New Lender all the rights of the Existing Lender under the Loan Agreement, the other Finance Documents and in respect of any Encumbrance created or expressed to be created or evidenced by the Security Documents which correspond to that portion of the Existing Lender's Commitment(s) and participations in the Loan under the Loan Agreement as specified in the Schedule. |
(b) | The Existing Lender is released from all the obligations of the Existing Lender which correspond to that portion of the Existing Lender's Commitment(s) and participations in the Loan under the Loan Agreement specified in the Schedule. |
(c) | The New Lender becomes a Party as a Lender and is bound by obligations equivalent to those from which the Existing Lender is released under paragraph (b). |
3 | The proposed Transfer Date is [l]. |
4 | On the Transfer Date the New Lender becomes: |
5 | The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 30.2 (Addresses) are set out in the Schedule. |
6 | The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in Clause 23.4(c) (Limitation of responsibility of Existing Lenders). |
7 | The New Lender confirms, for the benefit of the Agent and without liability to any Security Party, that it is: |
(a) | [a Qualifying Lender (other than a Treaty Lender);] |
(b) | [a Treaty Lender;] |
(c) | [not a Qualifying Lender]. |
8 | [The New Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either: |
(a) | a company resident in the United Kingdom for United Kingdom tax purposes; |
(b) | a partnership each member of which is: |
(i) | a company so resident in the United Kingdom; or |
(ii) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or |
(c) | a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.] |
9 | [The New Lender confirms that it holds a passport under the HMRC DT Treaty Passport scheme (reference number [l]) and is tax resident in [l], so that interest payable to it by borrowers is generally subject to full exemption from UK withholding tax and hereby notifies the Borrower that it wishes that scheme to apply to the Loan Agreement.] |
10 | This Agreement acts as notice to the Agent (on behalf of each Finance Party) and, upon delivery in accordance with Clause 23.7 (Copy of Transfer Certificate or Assignment Agreement to Borrower), to the Borrower (on behalf of each Security Party) of the assignment referred to in this Agreement. |
11 | This Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement. |
12 | This Agreement [and any non-contractual obligations arising out of or in connection with it] [is/are] governed by English law. |
13 | This Agreement has been entered into on the date stated at the beginning of this Agreement. |
1 | We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate. |
2 | We confirm that: |
3 | We confirm that the VTL Coverage as at the date hereof is [l] per cent. |
4 | [We confirm that no Default is continuing.]* |
Signed: | ……………………………………………… | ……………………………………………… |
Officer | Officer | |
of | of | |
SAFE BULKERS, INC. | SAFE BULKERS, INC. |
Reducing Revolving Facility | ||
Reduction Dates (save as previously repaid or prepaid) | Reduction Amount $ | Maximum Available Amount: $10,000,000 as of the date of the Deed of Amendment and Restatement |
March 29, 2020 June 29, 2020 September 29, 2020 December 29, 2020 March 29, 2021 June 29, 2021 September 29, 2021 December 29, 2021 March 29, 2022 | $500,000 $500,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,500,000 $1,500,000 $2,000,000 | $9,500,000 $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $3,500,000 $2,000,000 - |
Subsidiary | Jurisdiction of Incorporation |
Agros Shipping Corporation | Marshall Islands |
Avstes Shipping Corporation | Liberia |
Eniadefhi Shipping Corporation | Liberia |
Eniaprohi Shipping Corporation | Liberia |
Eptaprohi Shipping Corporation | Liberia |
Glovertwo Shipping Corporation | Marshall Islands |
Gloverthree Shipping Corporation | Marshall Islands |
Gloverfour Shipping Corporation | Marshall Islands |
Gloverfive Shipping Corporation | Marshall Islands |
Gloversix Shipping Corporation | Marshall Islands |
Gloverseven Shipping Corporation | Marshall Islands |
Kerasies Shipping Corporation | Liberia |
Kyotofriendo One Shipping Inc. | Marshall Islands |
Kyotofriendo Two Shipping Inc. | Marshall Islands |
Lofou Shipping Corporation | Marshall Islands |
Marathassa Shipping Corporation | Liberia |
Marindou Shipping Corporation | Liberia |
Marinouki Shipping Corporation | Liberia |
Maxdeka Shipping Corporation | Marshall Islands |
Maxdekatria Shipping Corporation | Liberia |
Maxdodeka Shipping Corporation | Liberia |
Maxeikosi Shipping Corporation | Liberia |
Maxeikosiena Shipping Corporation | Liberia |
Maxeikositria Shipping Corporation | Liberia |
Maxeikositessera Shipping Corporation | Marshall Islands |
Maxeikosipente Shipping Corporation | Liberia |
Maxeikosiexi Shipping Corporation | Liberia |
Maxeikosiepta Shipping Corporation | Liberia |
Maxenteka Shipping Corporation | Marshall Islands |
Maxpente Shipping Corporation | Liberia |
Maxtessera Shipping Corporation | Marshall Islands |
Monagrouli Shipping Corporation | Marshall Islands |
Pelea Shipping Ltd. | Liberia |
Pemer Shipping Ltd. | Liberia |
Petra Shipping Ltd. | Liberia |
Pentakomo Shipping Corporation | Marshall Islands |
Pinewood Shipping Corporation | Marshall Islands |
Shikoku Friendship Shipping Company | Marshall Islands |
Shikokutessera Shipping Inc. | Marshall Islands |
Shikokupente Shipping Inc. | Marshall Islands |
Shikokuexi Shipping Inc. | Marshall Islands |
Shikokuepta Shipping Inc. | Marshall Islands |
Shikokuokto Shipping Corporation | Marshall Islands |
Shikokuennia Shipping Corporation | Marshall Islands |
Soffive Shipping Corporation | Liberia |
Staloudi Shipping Corporation | Liberia |
Vassone Shipping Corporation | Marshall Islands |
Vasstwo Shipping Corporation | Liberia |
Youngone Shipping Corporation | Marshall Islands |
Youngtwo Shipping Coproration | Marshall Islands |
Date: March 25, 2020 | |
By: | /s/ POLYS HAJIOANNOU |
Name: Polys Hajioannou | |
Title: Chairman and Chief Executive Officer | |
(Principal Executive Officer) |
Date: March 25, 2020 | |
By: | /s/ KONSTANTINOS ADAMOPOULOS |
Name: Konstantinos Adamopoulos | |
Title: Chief Financial Officer and Director |
1. | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Report. |
Date: March 25, 2020 | |
By: | /s/ POLYS HAJIOANNOU |
Name: Polys Hajioannou | |
Title: Chairman and Chief Executive Officer | |
(Principal Executive Officer) |
1. | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Report. |
Date: March 25, 2020 | |
By: | /s/ KONSTANTINOS ADAMOPOULOS |
Name: Konstantinos Adamopoulos | |
Title: Chief Financial Officer and Director |
53@9#,VY6YXG=<_+6[^W__ ,FE^-_]_3__ $X6U3[-0:\)^.WA7XBV/[1G@KX@^"_ __":VNCZ5
M<6DUL=7M[ >9(9%QNE.> X/"D=LT44J
Future Minimum Time Charter Revenue, Detail (Details) $ in Thousands |
Dec. 31, 2019
USD ($)
|
---|---|
Future Minimum Time Charter Revenue | |
2020 | $ 40,395 |
2021 | 31,293 |
2022 | 19,405 |
2023 | 17,805 |
2024 | 9,719 |
Thereafter | 59,798 |
Total | $ 178,415 |
Long Term Debt (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Long term debt is comprised of the following borrowings:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Maturities of Long-term Debt | The estimated minimum annual principal payments required to be made after December 31, 2019, based on the loan and credit facility agreements as amended, are as follows:
|
Fair Value of Financial Instruments and Derivatives Instruments (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Financial Instruments And Derivative Insturments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | Derivatives not designated as hedging instruments
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments, Gain (Loss) |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table summarizes the valuation of the Company’s financial instruments as of December 31, 2018 and 2019.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets Measured at Fair Value on Non-Recurring Basis | The following tables summarize the valuation of assets measured at fair value on a non-recurring basis during the year ended December 31, 2017.
|
Accrued Liabilities |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities | Accrued Liabilities Accrued liabilities are comprised of the following:
|
Commitments and Contingencies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies (a) Capital expenditure commitments relating to our vessels and vessels under construction are as follows:
Other commitments represent contracted costs related to the purchase of BWTS and Scrubbers to be installed on certain of our vessels. (b) Other contingent liabilities The Company and its Subsidiaries have not been involved in any legal proceedings, that may have, or have had, a significant effect on their business, financial position, results of operations or liquidity, nor is the Company aware of any proceedings that are pending or threatened that may have a significant effect on its business, financial position, results of operations or liquidity. From time to time various claims, suits and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping business. In addition, losses may arise from disputes with charterers, agents, shipyards, insurance providers and other claims relating to the operation of the Company’s vessels. Management is not aware of any material claims or contingent liabilities which should be disclosed, or for which a provision should be established in the accompanying consolidated financial statements. The Company accrues for the cost of environmental liabilities when management becomes aware that a liability is probable and is able to reasonably estimate the probable exposure. Management is not aware of any such claims or contingent liabilities which should be disclosed, or for which a provision should be established in the accompanying consolidated financial statements. A maximum of $1,000,000 of the liabilities associated with the individual vessel actions, mainly for sea pollution, is covered by P&I Club insurance.
|
Advances for Vessels |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||
Advances For Assets Acquisition And Assets Under Construction | |||||||||||||||||||||||||||||||||||||||||
Advances For Assets Acquisitions And Assets Under Construction | Advances for Vessels Advances for vessels are comprised of the following:
Advances paid for vessels represent advances paid for vessels acquisitions, vessels under construction and vessel improvements and comprise payments of instalments that were due to the respective shipyard or third-party sellers, capitalized interest, certain capitalized expenses and expenditures for major improvements and regulatory compliance. During 2018 and 2019, such payments were made for the following vessels:
• During the year ended December 31, 2019: improvements to several vessels and advances for Hull No. S 1772.
|
Significant Accounting Policies (Policies) |
12 Months Ended |
---|---|
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation: The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include all accounts of the Company. All intercompany balances and transactions have been eliminated upon consolidation.
|
Use of Estimates | Use of Estimates: The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates may include vessel valuations, the valuation of amounts due from charterers, residual value of vessels and the useful life of vessels. Actual results may differ from these estimates.
|
Stockholders' Equity | Other Comprehensive Income/(Loss): The Company follows the accounting guidance relating to Statement of Comprehensive Income, which requires separate presentation of certain transactions that are recorded directly as components of shareholders’ equity. The Company has no other comprehensive income/(loss) and accordingly comprehensive income/(loss) equals net income/(loss) for the periods presented. Treasury stock: The Company records the repurchase of its shares at cost based on the settlement dates of repurchase transactions. These shares are classified as treasury stock, which is a reduction to shareholders’ equity. Treasury shares are included in authorized and issued shares but excluded from outstanding shares.Dividends: Dividends are recorded in the period in which they are declared by the Company’s board of directors.
|
Foreign Currency Translation | Foreign Currency Translation: The reporting and functional currency of the Company is the U.S. dollar (“USD”). Transactions incurred in other currencies are translated into USD using the exchange rates in effect at the time of the transaction. On the balance sheet date, monetary assets and liabilities that are denominated in other currencies are translated into USD to reflect the end-of-period exchange rates. Resulting gains or losses from foreign currency transactions are recorded within Foreign currency gain/(loss) in the accompanying consolidated statements of operations in the period in which they arise.
|
Cash and Cash Equivalents | Cash and Cash Equivalents: Cash and cash equivalents consist of current, call, time deposits and certificates of deposit with original maturities of three months or less and which are not restricted for use or withdrawal.
|
Time Deposits | Time Deposits: Time deposits are held with banks with original maturities longer than three months. In the event remaining maturities are shorter than 12 months, such deposits are classified as current assets; if original maturities are longer than 12 months, such deposits are classified as non-current assets.
|
Restricted Cash | Restricted Cash: Restricted cash represents minimum cash deposits or cash collateral deposits required to be maintained with certain banks under the Company’s borrowing arrangements or in relation to bank guarantees issued on behalf of the Company. In the event that the obligation relating to such deposits is expected to be terminated within the next 12 months, these deposits are classified as current assets; otherwise they are classified as non-current assets.
|
Accounts Receivable | Accounts Receivable: Accounts receivable reflect trade receivables from time or voyage charters and other receivables from operational activities, net of an allowance for doubtful accounts. On each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. |
Inventories | Inventories: Inventories consist of bunkers and lubricants owned by the Company remaining on board the vessels at the end of each reporting period, which are stated at the lower of cost and net realizable value. Cost is determined using the first–in, first-out method. |
Vessels Net, Depreciation, Special Survey and Drydocking Costs, Repairs and Maintenance | Vessels, Net: Vessels are stated at their cost, which consists of the contracted purchase price and any direct material expenses incurred upon acquisition (including improvements, on-site supervision expenses and financing costs incurred during the construction period for vessels under construction, commissions paid, delivery expenses and other expenditures to prepare the vessel for her initial voyage), less accumulated depreciation and impairment, if any. Certain subsequent expenditures for conversions, major improvements and regulatory requirements are also capitalized if it is determined that they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels. Vessels’ Depreciation: Depreciation is computed using the straight-line method over the estimated useful life of the vessels, after considering the estimated residual value. The Company estimates the useful life of its vessels to be 25 years from the date of initial delivery from the shipyard. Secondhand vessels are depreciated from the date they become available for use through their remaining estimated useful life. Accounting for Special Survey and Drydocking Costs: Special survey and drydocking costs are expensed in the period incurred and are included in vessel operating expenses in the accompanying consolidated statements of operations. Repairs and Maintenance: Repair and maintenance expenses, including major overhauling and underwater inspection expenses, are expensed when incurred and are included in vessel operating expenses in the accompanying consolidated statements of operations.
|
Impairment of Long-lived Assets and Assets Held for Sale | Impairment of Long-lived Assets: The Company follows the Accounting Standards Codification (“ASC”) Subtopic 360-10, “Property, Plant and Equipment” (“ASC 360-10”), which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. If indicators of impairment are present, the Company performs an analysis of the anticipated undiscounted future net cash flows of the related long-lived assets. Various factors including anticipated future charter rates, estimated scrap values, future drydocking costs and estimated voyage and vessel operating costs are included in this analysis. If the carrying value of the related asset exceeds the undiscounted cash flows, the carrying value is reduced to its estimated fair value and the difference is recorded as an impairment loss in the consolidated statements of operations. Assets Held for Sale: The Company may dispose of certain of its vessels when suitable opportunities occur, including prior to the end of their useful lives. The Company classifies assets as being held for sale when the following criteria are met: (i) management is committed to sell the asset; (ii) the asset is available for immediate sale in its present condition; (iii) an active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated; (iv) the sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale within one year; (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (vi) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. |
Deferred Financing Costs | Deferred Financing Costs: Financing fees incurred for obtaining new loans and credit facilities are deferred and amortized over the term of the respective loan or credit facility using the effective interest rate method. The unamortized deferred financing costs are presented as a direct deduction from the carrying amount of the related loan and credit facility in the consolidated balance sheet. Deferred financing costs relating to undrawn facilities are presented under non-current assets in the consolidated balance sheet. Any unamortized balance of costs relating to loans repaid or refinanced is expensed in the period in which the repayment or refinancing is made, subject to the guidance regarding Debt Extinguishment. Any unamortized balance of costs related to credit facilities repaid and terminated is expensed in the same period. Any unamortized balance of costs relating to the credit facilities refinanced is deferred and amortized over the term of the respective refinanced credit facility in the period in which the refinancing occurs, subject to the provisions of the accounting guidance relating to Changes in Line-of-Credit or Revolving-Debt Arrangements.
|
Derivative and Financial Instruments | Derivative Instruments: The Company may enter into foreign exchange forward contracts to create economic hedges for its exposure to currency exchange risk on payments relating to the acquisition of vessels and on certain loan obligations. The Company may also enter into interest rate derivatives to create economic hedges for its exposure to interest rate risk of its loan obligations as well as derivatives relating to the fluctuation of the price of bunker fuel consumed by its vessels. When such derivatives do not qualify for hedge accounting the Company records these financial instruments in the consolidated balance sheet at their fair value as either a derivative asset or a liability, and recognizes the fair value changes thereto in the consolidated statements of operations. When the derivatives do qualify for hedge accounting, depending upon the nature of the hedge, changes in fair value of the derivatives are either offset against the fair value of assets, liabilities or firm commitments through income, or recognized in other comprehensive income/(loss) (effective portion) until the hedged item is recognized in the consolidated statements of operations. For the years ended December 31, 2017, 2018 and 2019, no derivatives were accounted for as accounting hedges. Financial Instruments: Over-the-counter foreign exchange forward contracts, interest rate derivatives, bunker fuel price derivatives and cash equivalents are recorded at fair value. Other financial instruments, including debt are recorded at amortized cost. (a) Interest rate risk: The Company’s interest rates and long-term loan repayment terms are described in Note 6. The Company may manage its interest rate risk by entering into interest rate derivative instruments. As of December 31, 2019 the Company did not have any interest rate swap agreements in place. (b) Concentration of credit risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of trade accounts receivable, cash and cash equivalents, time deposits and interest rate and bunker fuel price derivative instruments. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers’ financial condition and generally does not require collateral for its trade accounts receivable. The Company places its cash and cash equivalents, time deposits and other investments with high credit quality financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions. The Company may be exposed to credit risk in the event of non-performance by its counterparties to derivative instruments; however, the Company may limit its exposure by transacting with counterparties with high credit ratings. (c) Fair value measurement: In accordance with the requirements of accounting guidance relating to Fair Value Measurement, the Company classifies and discloses assets and liabilities carried at fair value in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data.
|
Accounting for Revenues and Related Expenses | Accounting for Revenues and Related Expenses: The Company generates its revenues from charterers for the charter hire of its vessels. Vessels are chartered under time charter. A time charter is a contract for the use of a vessel for a specific period of time and a specified daily charter hire rate, which is generally payable in advance. The Company’s time charter agreements are classified as operating leases pursuant to Accounting Standards Codification (“ASC”) 842 - Leases, because (i) the vessel is an identifiable asset, (ii) the Company does not have substantive substitution rights and (iii) the charterer has the right to control the use of the vessel, during the term of the contract, and derives the economic benefits from such use. Time charter revenue is recognized when a charter agreement exists, the vessel is made available to the charterer and collection of the related revenue is reasonably assured. Time charter revenues are recognized as earned on a straight-line basis over the term of the charter as service is provided. Revenues from time charter may also include ballast bonus, which is an amount paid by the charterer for repositioning the vessel at the charterer’s disposal (delivery point), which is recognized as revenue over the term of the charter, and other miscellaneous revenues from vessel operations. Time charter hire is typically payable 15 or 30 days in advance as determined in the charter party agreement. Expenses relating to the Company’s time charters are vessel operating expenses and certain voyage expenses, which are paid by the Company and recognized as incurred. Vessel operating expenses that are paid by the Company include costs for crewing, insurance, lubricants, spare parts, provisions, stores, repairs, maintenance, statutory and classification expense, drydocking, intermediate and special surveys and other minor miscellaneous expenses. Voyage expenses which are also recognized as incurred by the Company include costs for draft surveys, hold cleaning, postage, extra war risk insurance and other minor miscellaneous expenses related to the voyage. Voyage expenses relating to bunkers consumption during the ballast period are considered contract fulfilment costs and are capitalized and amortized over the term of the charter when they meet the following criteria according to ASC 340-40-25-5: (i) the costs relate directly to a contract or to an anticipated contract that the entity can specifically identify, (ii) the costs generate or enhance resources of the entity that will be used in satisfying, or in continuing to satisfy, performance obligations in the future and (iii) the costs are expected to be recovered. The charterer is responsible for paying the cost of bunkers and other voyage expenses (e.g., port expenses, agents’ fees, canal dues, extra war risks insurance and any other expenses related to the cargo). Certain voyage expenses paid by the Company such as extra war risk insurance may be recovered from the charterer; such amounts recovered are recorded as Other Income within Revenues. The Company has identified that time charter contracts contain a lease in accordance with ASC 842, and are classified as operating leases. On January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (codified as ASC 842), as amended from time to time, using the modified retrospective transition method. The Company elected to apply the additional and optional transition method to existing leases at the beginning of the period of adoption through a cumulative effect adjustment to the opening retained earnings as of January 1, 2019. Also, the Company elected to apply a package of practical expedients under ASC 842, which allowed the Company, not to reassess (i) whether any existing contracts, on the date of adoption, contained a lease, (ii) lease classification of existing leases classified as operating leases in accordance with ASC 840 and (iii) initial direct costs for any existing leases. ASC 842 also provides a practical expedient to lessors by class of underlying asset, to not separate non lease components from the associated lease component when the following criteria are met (i) the timing and pattern of transfer for the lease component is the same as those for the non-lease component associated with that lease component and (ii) the lease component, if accounted for separately, would be classified as an operating lease. The Company, making use of this practical expedient for lessors, has elected not to separate the lease and non-lease components included in the time charter revenue but rather to recognize operating lease revenue as a combined single lease component for all time charter contracts as the related lease component, the hire of a vessel, and non-lease component, the fees for operating and maintaining the vessel, have the same timing and pattern of transfer (both the lease and non-lease components are earned by passage of time) and the predominant component is the lease. Upon adoption of ASC 842, the timing and recognition of earnings from time charter contracts to which the Company acts as lessor did not change from previous practice and thus the adoption of this standard did not have an effect on the Company’s consolidated opening retained earnings, balance sheets and consolidated statements of operations. Vessels are also chartered under voyage charters, where a contract is made for the use of a vessel under which the Company is paid freight on the basis of moving cargo from a loading port to a discharge port. The Company accounts for a voyage charter when all the following criteria are met: (i) the parties to the contract have approved the contract in the form of a written charter agreement or fixture recap and are committed to perform their respective obligations, (ii) the Company can identify each party’s rights regarding the services to be transferred, (iii) the Company can identify the payment terms for the services to be transferred, (iv) the charter agreement has commercial substance (that is, the risk, timing, or amount of the future cash flows is expected to change as a result of the contract) and (v) it is probable that the Company will collect substantially all of the consideration to which it will be entitled in exchange for the services that will be transferred to the charterer. The Company determined that its voyage charters consist of a single performance obligation which is met evenly as the voyage progresses and hence, the voyage revenues are recognized on a pro rata basis over the duration of the voyage from load port to discharge port, in accordance with ASC 606 - Revenue from Contracts with Customers (“ASC 606”). Probable losses on voyages are provided for in full at the time such losses can be estimated. Related expenses are operating expenses, bunkers and voyage expenses and are all paid for by the Company. Costs incurred prior to loading which are directly related to the voyage may be deferred if they meet certain conditions, and are amortized over the duration of the voyage from load port to discharge port. Costs incurred during the voyage are expensed as incurred. Voyage hire is typically paid upon completion of the performance obligation. During the years ended December 31, 2017, 2018 and 2019, there has only been one instance in each of 2017 and 2018 where a vessel was employed under a voyage charter and in both cases the voyage had begun and ended in the same period. Unearned revenue includes: (i) cash received prior to the balance sheet date relating to services to be rendered after the balance sheet date and (ii) deferred revenue resulting from straight-line revenue recognition in respect of charter agreements that provide for varying charter rates. Accrued revenue results from straight-line revenue recognition in respect of charter agreements that provide for varying charter rates. Commissions (address and brokerage), regardless of charter type, are always paid by the Company, are deferred and amortized over the related charter period and are presented as a separate line item in revenues to arrive at net revenues in the accompanying consolidated statements of operations.
|
Taxes | Taxes: Entities within the group that are incorporated under the laws of either the Republic of Liberia or the Republic of the Marshall Islands are not subject to Liberian or Marshall Islands income taxes. However, each vessel-owning Subsidiary is subject to registration and tonnage taxes under the laws of the Republic of Cyprus or the Republic of the Marshall Islands depending on where each Company’s vessel is registered. As of January 1, 2013, each vessel managed in Greece is subject to tonnage tax, under the laws of the Republic of Greece. In addition, under the laws of the Republic of Greece, until the year ended December 31, 2018, each vessel managed in Greece was subject to an annual shipping community mandatory financial contribution. These registration, tonnage taxes and financial contributions are recorded within Vessel operating expenses in the accompanying consolidated statements of operations and none are considered income taxes. Furthermore, until the year ended December 31, 2018 each Subsidiary was subject to a 4.00% U.S. federal tax in respect of its U.S. source shipping income (imposed on gross income without the allowance for any deductions), unless we qualify for exemption from tax under certain tax rules. For our 2019 taxable year, we were exempt from U.S federal tax on our U.S. source gross shipping income. There can be no assurance that we or any of our subsidiaries will qualify for tax exemption for our subsequent taxable years. Such taxes have been recorded within Voyage expenses. If such taxes were recovered from the charterers such amounts recovered were recorded within Revenues in the accompanying consolidated statements of operations.
|
Earnings/(Loss) Per Share | Earnings/(Loss) Per Share: The computation of basic earnings/(loss) per share is based on the weighted average number of common stock outstanding during the year and includes the shares issuable to the audit committee chairman and the independent directors at the end of each year for services rendered. The computation of basic earnings/(loss) per share is calculated after deducting the preferred stock dividends paid and accrued (including any deemed dividend) from net income/(loss) divided by the weighted average number of shares.
|
Segment Reporting | Segment Reporting: The Company reports financial information and evaluates its operations by total charter revenue and not by the type of vessel or vessel employment for its customers. The Company’s vessels have similar operating and economic characteristics. As a result, management, including the chief operating decision makers, reviews operating results solely by revenue per day and operating results of the fleet, and thus the Company has determined that it operates under one reportable segment. Furthermore, when the Company charters a vessel to a charterer, the charterer is free to trade the vessel worldwide and, as a result, the disclosure of geographic information is impracticable.
|
Recent Accounting Pronouncements | Recent Accounting Pronouncements: Leases: In February 2016, the FASB issued Accounting Standard Update (“ASU”) 2016-2 (codified as ASC 842), which amends the existing accounting standard for lease accounting and adds additional disclosures about leasing arrangements. ASC 842 requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by most leases, while lessor accounting remains largely unchanged. ASC 842, as amended, subject to certain transition relief options, requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, or allows entities to elect not to recast the comparative periods presented when transitioning to ASC 842 and to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. ASC 842 also provides a practical expedient to lessors by class of underlying asset, to not separate non lease components from the associated lease component, similar to the expedient provided for lessees, when the following criteria are met i) the timing and pattern of transfer for the lease component is the same as those for the non-lease component associated with that lease component and (ii) the lease component, if accounted for separately, would be classified as an operating lease. ASC 842 is effective for public entities with reporting periods beginning after December 15, 2018, including interim periods within those fiscal periods. Early adoption is permitted for all entities. The Company adopted ASC 842 for its reporting period commencing January 1, 2019. Refer to Note 2.
|
Loss on Sale of Assets |
12 Months Ended |
---|---|
Dec. 31, 2019 | |
Proceeds from Sale of Productive Assets [Abstract] | |
Loss on Sale Of Assets | Loss on Sale of Assets During January 2017, the Company concluded the sale of the Hull No. 1551 to a company controlled by Polys Hajioannou for an aggregate gross consideration of $20,510 in cash, realizing a net loss of $120. There was no sale of assets for the periods ended December 31, 2018 and December 31, 2019.
|
Accrued Liabilities, Detail (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Accrued Liabilities [Abstract] | ||
Interest on long-term debt | $ 1,588 | $ 4,225 |
Vessels’ operating and voyage expenses | 4,223 | 1,808 |
Commissions | 176 | 139 |
Interest on derivatives and other finance expenses | 511 | 566 |
General and administrative expenses | 97 | 145 |
Total | $ 6,595 | $ 6,883 |
Fair Value of Financial Instruments and Derivative Instruments Derivatives Not Designated as Hedging Instruments (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Derivative [Line Items] | ||
Derivative liabilities / Current liabilities | $ 121 | $ 0 |
Not Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Total Derivative Assets | 0 | 0 |
Total Derivative Liabilities | 121 | 0 |
Not Designated as Hedging Instrument | Bunker Fuel Contracts | ||
Derivative [Line Items] | ||
Derivative assets / Current assets | 0 | 0 |
Derivative liabilities / Current liabilities | $ 121 | $ 0 |
Revenues, detail (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Revenues [Abstract] | |||
Time charter revenue (operating leases) | $ 202,400 | $ 191,977 | $ 146,533 |
Voyage charter revenue | 0 | 1,113 | 1,095 |
Other income | 4,282 | 8,458 | 6,412 |
Total | $ 206,682 | $ 201,548 | $ 154,040 |
Basis of Presentation and General Information, textuals (Details) $ in Thousands |
1 Months Ended | |
---|---|---|
Jun. 30, 2018
USD ($)
shares
|
Dec. 31, 2019
item
|
|
Subsidiary, Sale of Stock [Line Items] | ||
Number of additional public common stock offerings | 5 | |
Number of additional public preferred stock offerings | 3 | |
Number of subsidiaries | 48 | |
Number of drybulk vessels | 41 | |
Number of newbuild vessels | 1 | |
Cumulative redeemable perpetual preferred equity | $ | $ 16,875 | |
Series A Preferred Stock | Private Placement | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of shares issued in transaction | shares | 100 |
Transactions with Related Parties, Schedule of Fees Charged by Managers (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Related Party Transactions [Abstract] | |||
Ship Management Fees | $ 18,050 | $ 16,536 | $ 13,511 |
Supervision Fees | 275 | 275 | 550 |
Commissions | $ 0 | $ 586 | $ 700 |
Subsequent events |
12 Months Ended |
---|---|
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events (a) Dividend declaration: On January 9, 2020, the board of directors declared a dividend of $0.50 per share of all classes of preferred shares, totaling $2,750, payable to all shareholders of record as of January 23, 2020, which was paid on January 30, 2020. (b) Bunker fuel derivatives: In January 2020, the Company entered into a bunker fuel contract for a period until December 2020 and for 12,000 tonnes per annum of 1,000 tonnes per month to buy the spread differential between the price per ton of the 0.5% and 3.5% sulfur content fuel respectively. (c) Interest rate derivatives: In March 2020, the Company entered into four pay-fixed, receive-variable interest rate derivative contracts commencing March 2020 and maturing September 2024, at an average fixed rate of 0.798% and for an aggregate notional amount of $50,000. (d) Repurchase of common shares: In March 2020, the Company adopted a new program for the repurchase of an amount of up to 2,000,000 shares of its common stock which was expanded for an additional 1,500,000 shares of its common stock. As of March 24, 2020, the Company has repurchased 1,136,254 shares of its common stock under the program. (e) Repurchase of preferred shares: In March 2020, the Company adopted a new share repurchase program under which it may from time to time purchase up to 100,000 Series C Preferred Shares and up to 100,000 Series D Preferred Shares on the open market. As of March 24, 2020, the Company has repurchased 2,496 Series C Preferred Shares and 4,950 of Series D Preferred Shares under the program. (f) Coronavirus Outbreak: On March 11, 2020, the World Health Organization declared the 2019 Novel Coronavirus (the “2019-nCoV”) outbreak a pandemic. In response to the outbreak, many countries, ports and organizations, including those where we conduct a large part of our operations, have implemented measures to combat the outbreak, such as quarantines and travel restrictions. Such measures have and will likely continue to cause severe trade disruptions. The extent to which 2019-nCoV will impact the Company’s results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the virus and the actions to contain or treat its impact, among others. Accordingly, an estimate of the impact cannot be made at this time.
|
Unearned Revenue / Accrued Revenue |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Received In Advance And Unearned Revenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unearned Revenue/Accrued Revenue | Unearned Revenue /Accrued Revenue Unearned Revenue represents cash received in advance of it being earned, whereas Accrued Revenue represents revenue earned prior to cash being received. Revenue is recognized as earned on a straight-line basis at their average rates when charter agreements provide for varying annual charter rates over their term. Total Unearned Revenue/Accrued Revenue during the periods presented is as follows:
|
Fair Value of Financial Instruments and Derivative Instruments Derivative Instruments (Details) - tonne |
1 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2019 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Bunker fuel, annual tonnes | 12,000 | |
Bunker fuel, monthly tonnes | 1,000 | |
Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Bunker fuel, sulphur content | 0.50% | |
Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Bunker fuel, sulphur content | 3.50% |
Commitments and Contingencies, textual (Details) $ in Thousands |
Dec. 31, 2019
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Maximum covered by insurance | $ 1,000,000 |
Basis of Presentation and General Information, Charter Revenue (Details) - Charter Revenues |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Glencore Agriculture B.V. | |||
Concentration Risk [Line Items] | |||
Charterer percentage in total revenue | 21.03% | 14.73% | 0.00% |
Bunge S.A | |||
Concentration Risk [Line Items] | |||
Charterer percentage in total revenue | 10.37% | 13.76% | 12.72% |
Transactions with Related Parties, Sale of Vessel (Details) - Asset under Construction $ in Thousands |
Dec. 31, 2016
USD ($)
|
---|---|
Property, Plant and Equipment [Line Items] | |
Remaining commitment for new build | $ 20,510 |
Fair value of newbuild | $ 24,500 |
General and Administrative Expense, Detail (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
General and Administrative Expense [Abstract] | |||
Management fees – related parties | $ 18,050 | $ 16,536 | $ 13,511 |
Professional fees (legal and accounting) | 720 | 833 | 687 |
Directors fess and expenses | 468 | 477 | 468 |
Listing fees and expenses | 97 | 115 | 96 |
Miscellaneous | 1,304 | 1,281 | 1,356 |
Total | $ 20,639 | $ 19,242 | $ 16,118 |
(Loss)/earnings Per Share, Detail (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Earnings Per Share, Basic and Diluted [Abstract] | |||
Net (loss)/income | $ 16,038 | $ 27,684 | $ (84,679) |
Less preferred dividend paid and accrued | 11,498 | 11,384 | 12,316 |
Less preferred deemed dividend | 199 | 0 | 2,146 |
Net (loss)/income available to common shareholders | $ 4,341 | $ 16,300 | $ (99,141) |
Weighted average number of shares, basic and diluted (in shares) | 101,686,312 | 101,604,339 | 100,932,876 |
(Loss)/earnings per share in U.S. Dollars, basic and diluted (in USD per share) | $ 0.04 | $ 0.16 | $ (0.98) |
Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments under Shipbuilding Contracts and Memorandums of Agreement | Capital expenditure commitments relating to our vessels and vessels under construction are as follows:
|
Accrued Liabilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acrrued Liabilities | Accrued liabilities are comprised of the following:
|
Basis of Presentation and General Information |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and General Information | Basis of Presentation and General Information Safe Bulkers, Inc., (“Safe Bulkers”) was formed on December 11, 2007, under the laws of the Republic of the Marshall Islands. Safe Bulkers’ common stock trades on the New York Stock Exchange (“NYSE”) under the symbol “SB.” Polys Hajioannou and his family, by virtue of shares owned indirectly through various private entities are the controlling shareholders of Safe Bulkers and as a result control the outcome of matters on which shareholders are entitled to vote, including the election of the entire board of directors and other significant corporate actions. Since Safe Bulkers’ initial public offering, Safe Bulkers has successfully completed five additional public common stock offerings and three preferred stock offerings. As of December 31, 2019, Safe Bulkers held 48 wholly-owned companies (which are referred to herein as “Subsidiaries”) which together owned and operated a fleet of 41 drybulk vessels and were scheduled to acquire one additional newbuild vessel (the “Newbuild”). Safe Bulkers and its Subsidiaries are collectively referred to in the notes to the consolidated financial statements as the “Company.” The Company’s principal business is the ownership and operation of drybulk vessels. The Company’s vessels operate worldwide, carrying drybulk cargo for the world’s largest consumers of marine drybulk transportation services. Safety Management Overseas S.A., a company incorporated under the laws of the Republic of Panama (“Safety Management”) and Safe Bulkers Management Limited, a company incorporated under the laws of the Republic of Cyprus (“Safe Bulkers Management,” and, together with Safety Management, the “Managers,” and either of them “the Manager”), related parties both controlled by Polys Hajioannou, provide technical, commercial and administrative management services to the Company. The accompanying consolidated financial statements include the operations, assets and liabilities of the Company, and of its Subsidiaries listed below.
For the years ended December 31, 2017, 2018 and 2019, the following charterers individually accounted for more than 10% of the Company’s time charter, voyage charter and ballast bonus revenues as follows:
|
Mezzanine Equity |
12 Months Ended |
---|---|
Dec. 31, 2019 | |
Temporary Equity Disclosure [Abstract] | |
Mezzanine equity | Mezzanine equity Mezzanine equity represents the USD equivalent of 100 shares of Series A Cumulative Redeemable Perpetual Preferred Stock (the "Series A Preferred Shares") of our subsidiary Pinewood issued in June 2018 to an unaffiliated third party investor (the "Investor") in the amount of JPY1,854,900,000 plus accrued dividend. As of December 31, 2018 and 2019, the USD equivalent amounted to $16,875, and $17,072, plus accrued dividend of $123 and $128, respectively. These shares were issued as part payment of the cost of the vessel Pedhoulas Cedrus owned by Pinewood. Such shares have preference over shares of common stock of Pinewood with respect to distributions by, and liquidation of, Pinewood. The Series A Preferred Shares do not entitle the Investor to any voting rights (other than in limited circumstances in the case of certain events of default under the terms of their issuance), and they may be redeemed at the option of Pinewood at any time or at the option of the Investor upon the third anniversary of the issuance date. Such option to redeem the Series A Preferred Shares by the Investor meets the criteria for classification as mezzanine equity. The Investor is entitled to a dividend of 2.95% p.a. from the Series A Preferred Shares. The declaration of such dividend is subject to the discretion of Pinewood's board of directors and dividends accrue and cumulate irrespective of such declaration. The Investor is entitled to nominate one director to the board of Pinewood, representing a minority of Pinewood’s board of directors. The payment due upon liquidation to the Investor of Series A Preferred Shares is fixed at the redemption preference of JPY1,854,900,000 plus accumulated and unpaid dividends to the date of liquidation. The liquidation price of the Series A Preferred Shares as of December 31, 2019 was JPY1,868,692,325, equivalent to $17,200.
|
Vessels, Net |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vessels, Net | Vessels, Net Vessels, net are comprised of the following:
Transfer from Advances for vessels represents advances paid for vessels under construction and vessels acquisitions which were delivered to the Company, completed vessel improvements in respect of ballast water treatment systems (“BWTS”) and, sulfur oxide exhaust gas cleaning systems (“Scrubbers”), and vessel improvements in respect of the acquisition of second hand vessels. For the periods presented, the Company accepted delivery of the following vessels:
Consistent with prior practices, we reviewed all our vessels for impairment and none were found to be impaired at December 31, 2018 and December 31, 2019. As of December 31, 2019, 32 vessels owned by the Company with a carrying value of $701,780 had been provided as collateral to secure through first priority mortgages certain of the Company’s loans and credit facilities; title of ownership is held by the relevant lender for another 8 vessels with a carrying value of $214,907 to secure the relevant sale and lease back financing transactions. See further Note 6.
|
Fair Value of Financial Instruments and Derivative Instruments |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Financial Instruments And Derivative Insturments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure | Fair Value of Financial Instruments and Derivatives Instruments Cash and cash equivalents and restricted cash and interest rate derivatives are recorded at fair value. The carrying values of the current financial assets and current financial liabilities are reasonable estimates of their fair value due to the short-term nature of these financial instruments. Cash and cash equivalents and restricted cash are considered Level 1 items as they represent liquid assets with short-term maturities. The fair values of the variable interest long-term debt approximate the recorded values, due to their variable interest rates. The fair value of the fixed interest long-term debt is estimated using prevailing market rates as of the period end. The Company believes the terms of its loans are similar to those that could be procured as of December 31, 2019. The fair value of the long-term debt is disclosed in Note 6. Derivative instruments The Company in December 2019, entered into a bunker fuel contract for the period January to December 2020 for 12,000 tonnes per annum or 1,000 tonnes per month to sell the spread differential between the price per ton of the 0.5% and 3.5% sulfur content fuel respectively, with the objective of reducing the risk arising from changes in the price of the bunkers its vessels consume. The Company’s bunker fuel contract does not qualify for hedge accounting. The Company determines the fair market value of the bunker fuel contracts at the end of every period and accordingly records the resulting unrealized loss/gain during the period in the consolidated statement of operations. Information on the location and amounts of derivative fair values in the consolidated balance sheets and derivative gains/losses in the consolidated statements of operations are shown below: Derivatives not designated as hedging instruments
The gain or loss is recognized in the consolidated statement of operations and is presented in Other (Expense)/Income – Gain/(Loss) on derivatives. The Company’s bunker fuel derivative instruments were receive-fixed, pay-variable swaps based on the difference in price between various categories of bunker fuels. The fair value of the bunker fuel swaps is determined using a discounted cash flow approach based on the market rate of such price difference at the time of such valuation and take into account the credit risk of the counterparty financial institutions. Differences in prices are observable at commonly quoted intervals for the full terms of the swaps and therefore are considered Level 2 items in accordance with the fair value hierarchy. The following table summarizes the valuation of the Company’s financial instruments as of December 31, 2018 and 2019.
Asset Measured at Fair Value on a Non-Recurring Basis The following tables summarize the valuation of assets measured at fair value on a non-recurring basis during the year ended December 31, 2017.
As a result of the impairment analysis performed for the year ended December 31, 2017, four of the Company’s vessels with a carrying amount of $178,468 were written down to their estimated fair value as of December 31, 2017, as determined by the Company based on vessel valuations for the vessels, obtained from independent third party shipbrokers, resulting in an impairment charge of $91,293. This impairment charge is presented in the accompanying consolidated statement of operations under the caption “Impairment loss” for the year ended December 31, 2017. No impairment charge was recorded for the year ended December 31, 2018 and 2019.
|
Basis of Presentation and General Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Subsidiaries | The accompanying consolidated financial statements include the operations, assets and liabilities of the Company, and of its Subsidiaries listed below.
(5) Estimated completion date for newbuild vessel as of December 31, 2019.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Charterers Concentration | For the years ended December 31, 2017, 2018 and 2019, the following charterers individually accounted for more than 10% of the Company’s time charter, voyage charter and ballast bonus revenues as follows:
|
Dividends |
12 Months Ended |
---|---|
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Dividends | Dividends During 2018, the Company declared and paid one quarterly consecutive dividend of $0.50 per share and one final portion dividend of $0.11667 per share of Series B Preferred Shares, totaling $234, and four quarterly consecutive dividends of $0.50 per share of Series C Preferred Shares, totaling $4,600 and of Series D Preferred Shares, totaling $6,400, respectively. During 2019, the Company declared and paid four quarterly consecutive dividends of $0.50 per share of Series C Preferred Shares, totaling $4,600, and four quarterly consecutive dividends of $0.50 per share of Series D Preferred Shares, totaling $6,400. During 2018, the Company's subsidiary Pinewood declared and paid preferred dividends totaling JPY17,090,489.00 equivalent to $153 comprising of its first dividend of JPY32,981.64 per share equivalent to $298.52 per share of Series A Preferred Shares for the period June 8, 2018 to June 30, 2018, followed by a dividend of JPY137,923.25 per share equivalent to $1,231.37 per share of Series A Preferred Shares for the quarter ended September 30, 2018. In addition during 2018, Pinewood declared a dividend of JPY137,923.25 per share equivalent to $1,226.52 per share of Series A Preferred Shares totaling JPY13,792,325.00 equivalent to $123 for the quarter ended December 31, 2018, included under the caption “Mezzanine Equity” in the consolidated balance sheets, which was paid in January 2019. |
Future Minimum Time Charter Revenue |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||
Future Minimum Time Charter Revenue | |||||||||||||||||||||||||||||||||||||||||
Future Minimum Time Charters | Future Minimum Time Charter Revenue The future minimum time charter revenue, net of commissions, based on vessels committed to non-cancellable time charter contracts (including fixture recaps) as of December 31, 2019, is as follows:
Revenues from time charters are not generally received when a vessel is off-hire, including time required for normal periodic maintenance. In arriving at the minimum future charter revenues, an estimated off-hire time has been deducted, although such estimate may not be reflective of the actual off-hire in the future.
|
(Loss)/earnings Per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share, Basic and Diluted [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic (Loss)/Earnings Per Share | The computation of basic (loss)/earnings per share is presented as follows:
|
Transactions with Related Parties, The Managers (Details) |
12 Months Ended | 17 Months Ended | |||
---|---|---|---|---|---|
May 29, 2018
USD ($)
extension
|
May 29, 2018
EUR (€)
extension
|
Dec. 31, 2019
USD ($)
|
May 28, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Related Party Transactions [Abstract] | |||||
Management agreement term | 3 years | 3 years | |||
Management agreement, number of extensions | extension | 2 | 2 | |||
Management Agreement, Extension Terms | 3 years | 3 years | |||
Ship management fee, per day, per vessel | € 875 | $ 975 | |||
Flat ship management fee | € | € 3,000,000 | ||||
Supervision fee | $ 550,000 | ||||
Description of related party transaction | 50% is payable upon the signing of the relevant supervision agreement, and 50% is payable upon successful completion of the sea trials of each newbuild | ||||
Sales fee | 1.00% | ||||
Related Party Transaction, Due from (to) Related Party, Current [Abstract] | |||||
Due from manager | $ 558,000 | $ 599,000 | |||
Due to manager | $ 9,000 | $ 23,000 |
Transactions with Related Parties Transactions with Related Parties, Principal Executive Office Lease (Details) € in Thousands, $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2019
EUR (€)
|
|
Related Party Transactions [Abstract] | ||
Term of lease | 3 years | 3 years |
Annual lease payment | $ 72 | € 63 |
Fair Value of Financial Instruments and Derivative Instruments (Loss) / Gain Recognized on Derivatives (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Gain (loss) on derivatives | $ (121) | $ 18 | $ 72 |
Interest Rate Contract | Other Expense Income On Derivatives | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Gain (loss) on derivatives | 0 | 18 | 72 |
Bunker Fuel Contracts | Other Expense Income On Derivatives | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Gain (loss) on derivatives | $ (121) | $ 0 | $ 0 |
Revenues Revenues, Text details (Details) |
12 Months Ended |
---|---|
Dec. 31, 2019
USD ($)
vessel
| |
Disaggregation of Revenue [Line Items] | |
Number of vessels on long-term contracts | vessel | 3 |
Period after charter, available to purchase | 7 years |
Purchase price | $ 39,000 |
Purchase price commission | 1.00% |
Annual decrease in purchase price | $ 1,500 |
Minimum | |
Disaggregation of Revenue [Line Items] | |
Term of charter contract | 1 month |
Term of charter contract, long-term | 10 years |
Remaining term of charter contracts | 2 years |
Charter contract renewal term | 1 month |
Maximum | |
Disaggregation of Revenue [Line Items] | |
Term of charter contract | 6 months |
Term of charter contract, long-term | 20 years |
Remaining term of charter contracts | 12 years |
Charter contract renewal term | 12 months |
Mezzanine Equity (Details) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2019
USD ($)
shares
|
Dec. 31, 2018
USD ($)
|
Dec. 31, 2019
JPY (¥)
shares
|
Dec. 31, 2018
JPY (¥)
|
|
Temporary Equity [Line Items] | ||||
Mezzanine equity | $ 17,200 | $ 16,998 | ||
Series A Cumulative Redeemable Perpetual Preferred Stock | ||||
Temporary Equity [Line Items] | ||||
Mezzanine equity shares issued (in shares) | shares | 100 | 100 | ||
Mezzanine equity | $ 17,072 | 16,875 | ¥ 1,854,900,000 | |
Mezzanine dividends | $ 128 | $ 123 | ||
Preferred stock, dividend rate | 2.95% | |||
Liquidation value of mezzanine equity | $ 17,200 | ¥ 1,868,692,325 |
Annual principal payments (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Debt Disclosure [Abstract] | ||
2020 | $ 65,473 | |
2021 | 90,681 | |
2022 | 89,123 | |
2023 | 77,538 | |
2024 | 189,896 | |
2025 and thereafter | 93,108 | |
Total debt | $ 605,819 | $ 579,579 |
Vessels, Net, detail (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019
USD ($)
item
vessel
|
Dec. 31, 2018
USD ($)
vessel
|
Dec. 31, 2017
USD ($)
vessel
|
|
Vessel Cost | |||
Beginning Balance | $ 1,272,351 | $ 1,211,869 | |
Transfer from Advances for vessels | 39,725 | 60,482 | |
Ending Balance | 1,312,076 | 1,272,351 | $ 1,211,869 |
Accumulated Depreciation | |||
Beginning Balance | (317,060) | (268,993) | |
Depreciation | (50,310) | (48,067) | (51,424) |
Ending Balance | (367,370) | (317,060) | (268,993) |
Net Book Value | |||
Beginning Balance | 955,291 | 942,876 | |
Transfer from Advances for vessels | 39,725 | 60,482 | |
Depreciation | (50,310) | (48,067) | (51,424) |
Ending Balance | $ 944,706 | $ 955,291 | $ 942,876 |
Number of impaired vessels | vessel | 0 | 0 | 4 |
Number of vessels provided as collateral | item | 32 | ||
Vessels provided as collateral | $ 701,780 | ||
Number of vessels sold and leased back | vessel | 8 | ||
Carrying value of vessels sold and leased back | $ 214,907 |
Loss on Sale of Assets, Textual (Details) - USD ($) |
1 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jan. 31, 2017 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Proceeds from Sale of Productive Assets [Abstract] | ||||
Gross proceeds from sale of property plant and equipment | $ 20,510,000 | $ 0 | $ 0 | |
Loss on sale of assets | $ 120,000 | $ 0 | $ 0 | $ 120,000 |
Revenues |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Time Charter And Voyage Revenue | Revenues Revenues are comprised of the following:
As of December 31, 2019, all of the Company’s vessels are employed under time charters with remaining terms ranging from less than one month to 6 months based on the minimum duration of the time charter contracts, excluding 3 vessels which are on long term time charters for periods of ten or twenty years with a remaining tenor ranging between 2 to 12 years as of December 31, 2019. All the time charters are classified as operating leases. The contract/charter party generally provides typical warranties regarding the speed and the performance of the vessel. The charter party generally has some owner protective restrictions such that the vessel is sent only to safe ports by the charterer, subject always to compliance with applicable sanction laws, and carry only lawful or non-hazardous cargo. The charterer has the full discretion over the ports visited, shipping routes and vessel speed, subject only to the owner protective restrictions discussed above. Time charter agreements may have renewal options for one to 12 months. One of the long term period charters entered into January 2014, also grants the charterer an option to purchase the vessel at any time beginning at the end of the seventh year of the time charter period, at a price of $39,000 less 1.00% commission, decreasing thereafter on a pro-rated basis by $1,500 per year until the expiration of the charter in January 2024.
|
Long Term Debt |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long Term Debt | Long Term Debt Long term debt is comprised of the following borrowings:
In addition to the above facilities, in December 2019, we entered into a revolving credit facility for an amount of up to $20,000 maturing in December 2022. No amount was outstanding under this facility as of December 31, 2019. The above table includes eight facilities whereby the relevant vessels were formerly owned by our respective subsidiaries and have been sold to third parties and taken back by us on a bareboat charter basis with either an obligation to purchase them or a purchase option at the end of the respective charter period or an option to buy them during the respective charter period at predermined purchase prices. Ownership will revert back to the Company on settlement of the outstanding amounts. Details of these facilities are as follows; Each of Maxeikosiena, Youngone and Youngtwo entered into a sale and leaseback agreement in 2015, 2015 and 2017, respectively, with third party companies, subsidiaries of a financial institution, regarding the respective vessel owned by the relevant subsidiary. Under these agreements, each vessel was sold and leased back on a bareboat charter basis for a period of 10 years, with a purchase obligation at the end of the 10th year. Furthermore, each subsidiary holds an option to purchase back the respective vessel after the second year of the bareboat charter, at annual intervals and predetermined purchase prices. In view of the obligation of the subsidiaries to purchase the respective vessels at the end of the bareboat charter, the Company has assessed that these transactions be recorded as financing transactions. During the year ended December 31, 2018, the Company exercised the option to purchase back the vessel owned by Youngone. Each of Shikokutessera, Maxdeka, Shikoku and Glovertwo entered into a sale and leaseback agreement in November 2019, with third party companies, subsidiaries of a financial institution, regarding the respective vessel owned by the relevant subsidiary. The proceeds from each of these agreements were used to fully prepay the outstandings under credit facilities secured by the respective vessels and for general corporate purposes. Under these agreements, the respective vessel was sold and leased back on a bareboat charter basis, in the case of the vessel owned by Shikokutessera for a period of 8 years, and in the case of the other three vessels for seven and a half years . Each respective subsidiary holds an option to purchase back its respective vessel five years and nine months after the commencement of the respective bareboat charter. The sale and leaseback agreements include onerous provisions for the relevant subsidiaries in the event that such options are not exercised. The Company has verbally committed to exercise this purchase option for all four vessels. In view of this commitment and the onerous provisions if the options are not exercised, the Company has assessed that these transactions be recorded as financing transactions. Each of Shikokuokto and Gloversix entered into a sale and leaseback agreement in December 2019, with third party companies, subsidiaries of a financial institution, regarding the respective vessel owned by the relevant subsidiary. The proceeds from each of these agreements were used to fully prepay the outstandings under credit facilities secured by the respective vessels and for general corporate purposes. Under these agreements, each vessel was sold and leased back on a bareboat charter basis for a period of 8 years, with a purchase obligation at the end of the 8th year. Furthermore, each respective subsidiary holds an option to purchase back its respective vessel after the third year of the bareboat charter, at predetermined purchase prices. In view of the obligation of the subsidiaries to purchase the respective vessels at the end of the bareboat charter, the Company has assessed that these transactions be recorded as financing transactions. In addition to the above described facilities, in January 2020, each of Pentakomo and Maxdekatria entered into a sale and leaseback agreement, with third party companies, subsidiaries of a financial institution, regarding the respective vessel owned by the relevant subsidiary. The proceeds from each of these agreements were used to fully prepay the outstandings under credit facilities secured by the respective vessels and for general corporate purposes. Under these agreements, each vessel was sold and leased back on a bareboat charter basis for a period of 6 years, with a purchase obligation at the end of the 6th year. Furthermore, each respective subsidiary holds an option to purchase back its respective vessel after the third year of the bareboat charter, at predetermined purchase prices. This transaction was consummated in January 2020. In view of the obligation of the subsidiaries to purchase the respective vessels at the end of the bareboat charter, the Company has assessed that these transactions be recorded as financing transactions. Our credit and loan facilities bear interest at LIBOR plus a margin, except for each of Maxeikosiena and Youngtwo loan facilities and for a portion of each of Shikokutessera, Maxdeka, Shikoku and Glovertwo loan facilities. Each of the Maxeikosiena and Youngtwo loan facilities are deemed to incur interest at a fixed rate calculated so that the initial facility amount be amortized to maturity down to the purchase obligation price of each vessel. A portion of each of the Shikokutessera, Maxdeka, Shikoku and Glovertwo loan facilities are deemed to incur interest at a fixed rate calculated so that the initial facility amount be amortized to maturity down to the purchase option price of each vessel. Our loans and credit facilities are generally repayable by either quarterly or semi-annual principal instalments and a balloon payment due on maturity, with the exception of the Maxeikosiena and Youngtwo loan facilities, that are repayable by principal instalments every 45 days out of a portion of the bareboat hire payment and a balloon payment due on maturity equal to the purchase obligation. The fair value of debt outstanding on December 31, 2019 amounted to $605,949 when valuing the Maxeikosiena, Youngtwo, Shikokutessera, Maxdeka, Shikoku and Glovertwo loan facilities on the basis of the deemed equivalent fixed rate, as applicable on December 31, 2019, which is considered to be Level 2 items in accordance with the fair value hierarchy. As of December 31, 2019, an amount of $20,000 was available for drawdown under the above loans and credit facilities. The estimated minimum annual principal payments required to be made after December 31, 2019, based on the loan and credit facility agreements as amended, are as follows:
Total interest incurred on long-term debt for the years ended December 31, 2017, 2018 and 2019 amounted to $23,266, $25,713 and $26,815, respectively, which includes interest capitalized of $42, $0 and $114 for the years ended December 31, 2017, 2018 and 2019, respectively. The average interest rate (including the margin) for all bank loan and credit facilities during the years 2017, 2018 and 2019 was 3.838% p.a., 4.428% p.a. and 4.624% p.a., respectively. As of December 31, 2019, the foregoing loan and credit facilities were secured as follows:
The Safe Bulkers revolving credit facility is not secured by any security. The loan and credit facility agreements contain debt covenants including restrictions as to changes in management and ownership of the vessels, entering into certain long-term charters, additional indebtedness and mortgaging of vessels without the respective lender’s prior consent, minimum vessel insurance cover ratio requirements, as well as minimum fair vessel value ratio to outstanding loan principal requirements (the “Minimum Value Covenant”). The Minimum Value Covenant must not fall below 115% or 120% as the case may be. The borrowers are permitted to pay dividends to their owners as long as no event of default under the respective loan has occurred or has not been remedied or would occur as a result of the payment of such dividends. Certain of the loan and credit facility agreements require the respective borrowers to maintain at all times a minimum balance in each vessel operating account, from $150 to $1,000. The Safe Bulkers facilities and the corporate guarantees of the Company include the following financial covenants:
The Minimum Value Covenant, Consolidated Leverage Covenant, EBITDA Covenant, Net Worth Covenant and Control Covenant do not apply to the Shikokuepta loan facility. The Minimum Value Covenant and EBITDA Covenant do not apply to the Maxeikosiena and Youngtwo financing agreements. The EBITDA Covenant does not apply to the Shikokuokto, Gloversix, Pentakomo and Maxdekatria financing agreements. The Maximum Debt Covenant only applies to the Safe Bulkers revolving credit facility. As of December 31, 2019, the Company was in compliance with all debt covenants in effect, with respect to its loans and credit facilities.
|
Advances for Vessels (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||
Advances For Assets Acquisition And Assets Under Construction | |||||||||||||||||||||||||||||||||||||
Advances for Vessel Acquisition and Vessels under Construction | Advances for vessels are comprised of the following:
|
Vessel Operating Expenses (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vessel Operating Expenses | Vessel operating expenses are comprised of the following:
|
General and Administrative Expense (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General and Administrative Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General and Administrative Expense | General and administrative expenses for the years ended December 31, 2017, 2018 and 2019 were as follows:
|
Transactions with Related Parties |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions Disclosure | Transactions with Related Parties A. The Managers The Company enters from time to time into management agreements with the Managers for the provision of executive officers and management services to vessel-owning Subsidiaries. Pursuant to the management agreements, the vessel-owning Subsidiaries enter into separate ship management agreements with either one of the Managers under which chartering, operations, technical and accounting services are provided to the vessels. Pursuant to the management agreements, the Subsidiaries that have entered into agreements to acquire newbuild vessels are required to enter into supervision agreements with either one of the Managers. The Managers under these agreements receive fees, (the “Fees”), comprised of ship management fees, (the “Ship Management Fees”), supervision fees, (the “Supervision Fees”) and sale and purchase commissions, (the “Commissions”). The Managers are both related parties that are controlled by Polys Hajioannou. On May 29, 2018, following the expiration of the old management agreements, Safe Bulkers signed new management agreements with the Managers (the “Management Agreements”). The Management Agreements have an initial term of three years expiring on May 28, 2021 and can be extended for two additional terms of three years each. The fees provided by the Management Agreements are fixed until May 29, 2021 and upon mutual agreement with the Managers, can be adjusted for a subsequent term of three years each time on May 29, 2021 and May 29, 2024. In accordance with the Management Agreements, the Managers receive: •Ship Management Fees comprised of a daily ship management fee of €875 per vessel, payable monthly in arrears to the respective Manager and an annual ship management fee of €3,000,000 payable quarterly in arrears to only one of the Managers; •Supervision Fees of $550 with respect to each newbuild for the services rendered by one of the Managers under the supervision agreement of which 50% is payable upon the signing of the relevant supervision agreement, and 50% is payable upon successful completion of the sea trials of each newbuild; and •Commissions equal to 1.00% calculated on the price set forth in the memorandum of agreement or other sale and purchase newbuild contract, or any other vessel bought or sold by the Company, payable upon final delivery of such vessel to the relevant purchaser. No commissions are charged on sale and lease back transactions. For the period starting January 1, 2017 to May 28, 2018 the old management agreements provided for Ship Management Fees of $0.975 per day per vessel. Both old and new management agreements provided for the same Supervision Fees and Commissions. The Ship Management Fees are recorded in General and Administrative Expenses (refer to Note 15). The Commissions on purchase of newbuilds or second-hand vessels and the Supervision Fees are recorded in Advances for vessels (refer to Note 5). The Commissions on sale are recorded in Gain or Loss on sale of assets as the case may be. Amounts due from Manager under the management agreements were $599 and $558 as of December 31, 2018 and 2019, respectively. Amounts due to Manager under the management agreements were $23 and $9 as of December 31, 2018 and 2019, respectively. The Fees charged by our Managers comprised the following:
B. Sale of Vessel In August 2016, following the Company’s decision to reduce its capital commitments and improve its liquidity, Polys Hajioannou submitted a proposal to the Company’s board of directors, pursuant to which companies controlled by Polys Hajioannou would inter alia purchase Hull No. 1551 upon delivery from the shipyard. Upon receipt of this proposal, the Company’s board of directors formed a special committee consisting of the Company’s three independent directors in order to evaluate the proposal. The special committee was advised by an independent counsel, obtained two appraisals from independent third party brokers for the newbuild vessel and negotiated the terms of the transaction. The fair value of the vessel was based on the Company’s best estimate of the fair value on a charter free basis which was supported by vessel valuations obtained from independent third party shipbrokers. The remaining commitments under the newbuild contract for Hull No. 1551 were $20,510. The higher of the two appraisals obtained by the special committee from independent third party brokers was $24,500. In September 2016, the special committee approved inter alia the sale of newbuild Hull No. 1551 upon delivery from the shipyard to a company controlled by Polys Hajioannou. The relevant sale agreement was signed in October 2016, and the sale of Hull No. 1551 was consummated in January 2017, immediately upon delivery of the newbuild vessel from the shipyard. The Commission due to the Managers pursuant to the Management Agreements arising from the transaction was waived. No related party transactions in relation to sale of vessels occurred during 2018 and 2019. C. Credit Facility In December 2019, the Company entered into a credit facility with a financial institution for an amount up to $20,000. One of the independent members of the board of directors of the Company currently serves as the Chief Executive Officer of this financial institution. The transaction was evaluated and approved by the board of directors of the Company excluding that independent member of the board of directors of the Company. D. Principal Executive Office Lease |
Share Capital, Textual (Details) - $ / shares |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Subsidiary, Sale of Stock [Line Items] | ||
Ordinary shares authorized (in shares) | 200,000,000 | 200,000,000 |
Ordinary shares par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares outstanding (in shares) | 104,251,019 | 103,005,748 |
Preference shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preference shares par value (in USD per share) | $ 0.01 | $ 0.01 |
Series A Preferred Stock | ||
Subsidiary, Sale of Stock [Line Items] | ||
Preference shares authorized (in shares) | 1,000,000 | |
Series C Preferred Stock | ||
Subsidiary, Sale of Stock [Line Items] | ||
Preferred stock, shares outstanding (in shares) | 2,300,000 | 2,300,000 |
Series D Preferred Stock | ||
Subsidiary, Sale of Stock [Line Items] | ||
Preferred stock, shares outstanding (in shares) | 3,200,000 | 3,200,000 |
=T5%/\_9+(XIQ&+CZ, ^7SF\Q&$31D0[R #]DOQ$"Q"J=X8H7D_JS*1)XX@U
M.U[:"0O=8N>XWUR;IVO0&7*,,FLCA_HJ6\2]%!G,]ELFS25PUF$4DV45Q/[]
M=@V\*WTTN!AGWGH$#.34X$W!C;OW3/*$./4,HK[46?,36,5BT* ^R02(=@8FQ'D&)A2GEV>'4YU%==TQPKFVK7=."N^+$IGE(* 2
M*+RG0_VD\S[J3,?CO$ M]^2?>_7S^U#%-Z*@<+HIW#-A=&)]KN*#,46 G4N,[=&\ KTG!J='1/2@L:^['
M!X>%>4SV$3 B"&HEJ186YQ9A1T'67VSM"VO&"Y1+2XQ.RS0#T?ODPG-QY>
M-ISK1-W*2E;0IF0"?!,=[,WX!JVD %;:=[Z 9V9@L;;#BSHVM^,( U9GC"Q+
M)-O/Y7JMS-L9)W=5>ZES$2FLG88'^!>FIA22:) =T.PKKS*PH/ 7:27D=HH!
M7HDI,CK@Q_MWF[;SW5+YTAR1]IL6:+V%A@(G2MQE,V&^6G][REYX/.&E&E-Q
MZ@%NSX=0W8&%*P+N/LH"YK> M+P/3%'\W31!A 2X[K> XE0,7T,^3NHD:KN(
M[KM0#WAM+QRN86H+P;^^#P,9(Q21?36\Y!JV0VQ")>VA\X\0B.=7_,^>.ZB
M#O/#TF\6L48SFLN5\)?YY$%"V $C*9 9]?2K>FFEJ S?OQ "D[#&Z$W!4RC3
M?-8^B'P@6J6!4RWQ+=$I!(< "A/J)J1&%]K^X)^5=B^CI(.G1:#9P+=8FQSQ
M!5-*K\:?/RIL3H\3"$*$E(G8?M%/"Q'H9FW[2&/T3VSH WP;1OP-QP,E8=')
M0"QTPVFFXW6A-.]UI=S8 24G[TIZ!*=0]YKYT7QJO6O(HGEO+114]T*GZO=Y\N
M]KX]/A:%3B1\1K7=Y'#255=\%?[]QGD\3_^!7'$YO/IT,;W.SS46<]"\L)6>
MGMG_?55_17]'&[$P?^OG[IM\=BZ?O+6,G _RSKD*UR+XT
8>8)%22@WYR1
M\/S7%X'S3MYXD98T!D6DF%B8P1P""EHH;X['I"ZQ)X=A,@?-?Y7"8+Y[/^3#
MFH F4!C!OQ7
7A,8."9DN^E)4TO@)G$R2G:77&_*,7^%MA=F8Z -*,I\^4"U&J/PG!S
MS(A#:!G3WWUI\K]0PW?E6H,C>)@CA<;PK?#A3#L_45AU_9'<;S>6&%A>K!#)
MQ!*-MON\*$H85B*DHBZ\FCI4SH%V$L4XJ"* IX:+SR8:;$!*49 I4GM/1'8$
M(BM)N37PNWBY8;;0:D+;[@!I"7,B
AUL+W[PG8EC@,G@W2FH0
_"EGLGBF(-H9;*B*90E N
MI^#@7.-@KWGXBXAC_#UVR(B(O2H*=]2(6HZ!3#3SCVW_8'\;1]+Z5H]E^65O
M!@X9-0851(.R=8A=^'"YK
VZSG@.>J&G+JK+3>M':
M'.9=[ZC(8'^RS!O;=8=[!S/7QK2^\[Q/:F"ENH*IE\C93%*.JC[LM6SLKZWR
M83-?/6)!M:HIB&_($E@L_'>!D:VB3F&Z.6M^K;U,5>S!KUM=A'U]H'L#=>BF
M@6H?(SCSOJ XOJ+,^1=YG41$]&'J:SBC/4[B7T 1%Y'$JO 7F=/Y3,K6'\MK
MRP^@!M)1[=KB +6$H\)U7 K03.,19IJ99^3K?QU10*1^."UKVR4#Z/:F][\+
ML.9;F\/#SAD[*\N_P/+PBD/H6@