Boston, MA 10/09/2014 (wallstreetpr) – Knightsbridge Shipping Ltd (NASDAQ:VLCCF) signed a merger agreement with Norway-based Golden Ocean Group Limited (OSE: GOGL). As per the plan, the combined company will rename as Golden Ocean Group Limited, which will have a modern fleet size of 72 vessels including 36 under constructed newbuildings.
The merger is subject to the approval of the stakeholders of both the companies, regulatory and certain customary closing conditions. It will expect to close after the special general meetings, which is likely to happen on December 2014 or January 2015.
As per the merger agreement, Knightsbridge Shipping Ltd (NASDAQ:VLCCF) will issue 61.5 million shares to Golden Ocean’s shareholders at an exchange of one share Golden Ocean with 0.13749 shares of Knightsbridge Shipping Ltd (NASDAQ:VLCCF). The issue of 3.07% of unsecured convertible bonds of Golden Ocean in January 2014 will also convert into the convertible bond of the combined entity according to the terms of the bond agreement.
Furthermore, the indirect stakeholders such as John Fredriksen’s Hemen Holding Limited and their affiliates including Frontline 2012 Ltd expects to get 39% of the stake in the combined company after the merger. The ownership will increase to ~42% on completions of the second step of the transaction of Frontline 2012 in March 2015.
Golden Ocean Group Limited (OSE: GOGL)’s Chairman John Fredriksen will join the Board of Directors of the new company along with Kate Blankenship and Gert-Jan van der Akker. Knightsbridge Shipping Ltd (NASDAQ:VLCCF)’s Chairman and CEO, Ola Lorentzon will remain as the Chairman of the combined company.
Post-merger, the new company will have a fleet size of 72 vessels including 46 Capesize, 10 Panamax (ice class), 8 Kamsarmax and 8 Supramax vessels. It will also have one vessel under joint venture and a small number of leased vessels.
John Fredriksen and Ola Lorentzon said that the merger will create a leading shipping company in the dry bulk market. Both believe that it will improve the operational capabilities while increasing the fleet size capacity and a strong financial position will support in generating significant cash flow.