GOLDEN Ocean Group, whose shares are trading on the Oslo Stock Exchange (OSE) and the Singapore Stock Exchange, has agreed to merge with Nasdaq-listed Knightsbridge Shipping to form one of the world's leading dry bulk companies.
Knightsbridge will be the surviving legal entity and will be renamed Golden Ocean Group Ltd, which will boast of a modern fleet of 72 vessels, with 36 newbuildings under construction.
One Golden Ocean share will have the right to receive 0.13749 share in Knightsbridge. Knightsbridge will issue a total of 61.5 million shares to shareholders in Golden Ocean as merger consideration. The 3.07 per cent of Golden Ocean's senior unsecured convertible bond that was issued by Golden Ocean in January 2014 will be converted into a convertible bond in the new enlarged entity.
"With the current weakness in the dry bulk market, we believe there will be attractive consolidation opportunities going forward. Our ambition is to be a clear market leader both from a financial and operational perspective," Ola Lorentzon, chairman and CEO of Knightsbridge, and John Fredriksen, chairman of Golden Ocean, said in a joint statement.
"Upon an expected recovery of the dry bulk market and as newbuilds are brought into the fleet, we believe the combined company will generate significant cash flow. The intention is to pay out excess cash as dividends at the board's discretion," they added.
The new enlarged entity will apply for a secondary listing of its ordinary shares on the OSE, and expects that after the merger its ordinary shares will be listed for trading on both the Nasdaq and the OSE.
The merger is subject to various conditions including the approval by the shareholders of Golden Ocean and Knightsbridge in separate special general meetings expected to be held in December 2014 or January 2015.