Pangaea Logistics, MT Maritime to merge bulker fleets

Pangaea Logistics Solutions (PANL) and MT Maritime Management (USA) (MTM) have entered into a definitive agreement to merge 15 handysize dry bulk vessels into PANL's 26-vessel supramax, ultramax, panamax, and post-panamax fleet.

The handy vessels are currently owned by Strategic Shipping (SSI), a privately held company managed by MTM. The 15 handysize vessels are valued at approximately US$295 million, inclusive of vessel-related financing agreements of approximately US$102 million, resulting in a total net asset value of US$193 million.

As consideration, Pangaea will issue approximately 19 million shares of its common stock to SSI equal to approximately 29 per cent of the company’s outstanding common stock upon completion of the proposed transaction, which represents the relative net asset value of SSI’s vessels compared to the estimated net asset value of Pangaea of approximately US$478 million, or about US$10.20 per share.

The transaction is scheduled to close in the fourth quarter of 2024, subject to customary closing conditions and shareholder approval.

The transaction will consist of Pangaea’s acquisition of 100 per cent ownership in 15 handy-size vessels ranging in size from 33,000 DWT to 40,000 DWT, with an average age of approximately ten and a half years. As consideration, Pangaea will issue approximately 19 million of new common shares to SSI’s owners.

In addition, seven employees on MTM’s dry bulk chartering and operations teams will join the Company. Dan Schildt, MTM’s Senior Vice President of Dry Cargo and Strategic Planning, will also join the executive management team of Pangaea as Chief Strategy Officer. Pangaea will maintain an office near Stamford, Connecticut after closing.

As part of the transaction, SSI will receive the right to designate two members for appointment to the board of directors of the company.