Hunter turns a profit

Aug 30 2019

Oslo-based VLCC player Hunter Group reported net profit from continuing operations of $1.1 mill in the second quarter of this year, compared to a loss of $443,000 in 2Q18.

The net profit was mainly attributable to financial income.

Total operating expenses from continuing operations fell from $709,000 in 2Q18 to $133,000 in 2Q19.

During the quarter, post-delivery bank financing came in place equalling $420 mill of bank financing secured from a syndicate of international shipping banks. The loan will finance around 60% of the VLCC construction costs with available draw at delivery of each vessel.

At the same time, the company completed a private placement, raising gross proceeds of about NOK695 mill through the allocation of 190,454,000 shares at a subscription price of NO3.65 per share. As of 30th August, the company had 575,362,013 shares outstanding.

New delivery dates were negotiated or the first four newbuildings: H.No. 5455 16/9/2019, H.No 5456 27/9/2019, H.No.5457 31/10/2019 and H.No.5460 31/10/2019.

OSM Ship Management was appointed technical manager for all of the company’s newbuildings post-delivery.

The company also received a bid from a third-party buyer for two of its newbulding VLCCs at an en-bloc price of $196 mill ($98 mill per vessel). As of 17th June, 2019, Hunter had signed a Memorandum of Agreement with Far Eastern buyers to sell one of the VLCCs for $98 mill.

As security for the MoA’s fulfillment, the buyers have agreed to pay a deposit equal to 20% of the purchase price. The vessel will be delivered to the buyers on 31st October, 2019, which will also be the closing date for the transaction.

The vessel’s sale will generate a %37.6 mill positive cash flow effect. Furthermore, the company is still in advanced discussions regarding the sale of a second vessel, it said.

On 20th August, the company held a naming ceremony for the ‘Hunter Atla’ (H.No. 5455), ‘Hunter Saga’ (H.No. 5456) and ‘Hunter Laga’ (H.No. 5460).

The company has also recently agreed a binding term sheet for a five-year sale-and-leaseback agreement with a large leasing company at highly attractive terms.

The Board said that this agreement was beneficial to all shareholders as it retained maximum flexibility for the company and eliminated the need for any additional equity for it to take delivery of all vessels in the newbuilding programme.  Consequently, the company has cancelled the senior secured term loan announced on 22nd May, 2019.

Further details will be provided upon closing of the transaction, Hunter said.


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