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Safe Bulkers subsidiary to issue 2.95% preferreds to finance vessel
By Wendy Van Sickle
Columbus, Ohio, Aug. 3 – Safe Bulkers, Inc. said a new wholly owned subsidiary will issue 2.95% cumulative redeemable perpetual preferred equity to an unaffiliated investor to finance $16.9 million of the cost of a vessel.
The Kamsarmax class vessel is under construction contract and scheduled to be delivered to the subsidiary in 2018, according to a press release. The preferred equity would be issued upon delivery of the vessel.
The preferred shares will not entitle the investor to any voting rights other than in limited circumstances in the case of certain events of default. They will be redeemable at the option of the issuer at any time or at the option of the investor upon the third anniversary of the issuance.
The investor will be entitled to nominate one director to the subsidiary’s board of directors.
“This arrangement allows the company to finance a significant portion of this newbuild through the issuance of preferred equity to the investor with a preferred dividend below 3%, avoiding the incurrence of additional indebtedness and preserving our liquidity position, while it is not dilutive for our common shareholders,” Safe Bulkers president Loukas Barmparis said in the release.
Safe Bulkers is an Athens-based provider of marine drybulk transportation services.
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