|
Republic
of the Marshall Islands
(State
or other jurisdiction of
incorporation
or organization)
|
4412
(Primary
Standard Industrial
Classification
Code Number)
|
N/A
(I.R.S.
Employer
Identification
No.)
|
|
40
Ag. Konstantinou Avenue
Aethrion
Center, Suite B34
Maroussi
15124
Athens,
Greece
011-30-210-638-7399
(Address,
including zip code, and telephone number,
including
area code, of registrant's principal executive offices)
|
||
|
Seward &
Kissel LLP
One
Battery Park Plaza
New
York, New York 10004
(212) 574-1200
(Name,
address, including zip code, and telephone number, including area
code, of
agent for service)
|
||
|
Title
of Each Class of
Securities
to be Registered
|
Amount
to be
Registered
|
Proposed
Maximum
Aggregate
Price Per
Security
|
Proposed
Maximum
Aggregate
Offerin
Price
|
Amount
of Registration Fee
|
|
Common
Stock, par value $0.01 per share
|
43,171,530
(4)
|
$9.97
(1)
|
$430,420,154.10
|
$13,213.90
|
|
Warrants
(3)
|
20,000,000
|
$1.69
(2)
|
$33,800,000.00
|
$1,037.66
|
|
Shares
of common stock underlying the warrants
|
20,000,000
|
$8.00
(5)
|
$160,000,000.00
|
$4,912.00
|
|
Total
|
83,171,530
|
—
|
$624,220,154.10
|
$19,163.56
|
| (1) |
Estimated
pursuant to Rule 457(c) solely for the purpose of computing the
amount of the registration fee, and based on the average of the high
and
low prices of the Company’s common stock on the American Stock Exchange on
March 9, 2007 (i.e.
as of a date within five business days prior to
filing).
|
| (2) |
Estimated
pursuant to Rule 457(c) solely for the purpose of computing the
amount of the registration fee, and based on the average of the high
and
low prices of the Company’s warrants on the American Stock Exchange on
March 9, 2007 (i.e.
as of a date within five business days prior to filing).
|
| (3) |
Pursuant
to Rule 416, there are also being registered such indeterminable
additional securities as may be issued as a result of the anti-dilution
provisions contained in the Warrants.
|
| (4) |
Includes 29,026,924 shares reserved for issuance
to
shareholders of Star Maritime Acquisition Corp. Pursuant to the merger agreement, Star Maritime
Acquisition Corp.
will merge with and into the Registrant with the Registrant as the
surviving corporation. Includes 14,144,607 shares reserved for
issuance to TMT. Of the 14,144,607 shares reserved for issuance to
TMT,
1,606,962 shares are reserved for issuance to TMT if certain revenue
targets are achieved.
|
| (5) | Calculated pursuant to Rule 457(g) based on the exercise price of the warrants. |
|
The
Registrant hereby amends this Registration Statement on such date
or dates
as may be necessary to delay its effective date until the Registrant
shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Securities and
Exchange Commission, acting pursuant to said Section 8(a), may
determine.
|
| |
|
|
|
Prokopios
(Akis) Tsirigakis
Chairman
of the Board of Directors of Star Maritime Acquisition
Corp.
|
||
|
Wilmington,
Delaware
, 2007
|
||
| By order of the Board of Directors, | ||
| |
|
|
|
Prokopios
(Akis) Tsirigakis
Chairman
of the Board of Directors of Star Maritime Acquisition
Corp.
|
||
|
Wilmington,
Delaware
,
2007
|
||
|
QUESTIONS
AND ANSWERS ABOUT THE STAR MARITIME SPECIAL MEETING
|
1
|
|
|
HOW
TO OBTAIN ADDITIONAL INFORMATION
|
6
|
|
|
SUMMARY
|
7
|
|
|
SUMMARY FINANCIAL
INFORMATION
|
14
|
|
|
MARKET
PRICE AND DIVIDEND INFORMATION
|
20
|
|
|
RISK
FACTORS
|
21
|
|
|
FORWARD-LOOKING
STATEMENTS
|
34
|
|
|
THE
STAR MARITIME SPECIAL MEETING
|
35
|
|
|
BACKGROUND
AND REASONS FOR THE REDOMICILIATION MERGER
|
38
|
|
|
THE
ACQUISITION AGREEMENTS
|
45
|
|
|
ACQUISITION
FINANCING
|
49
|
|
|
THE
MERGER AGREEMENT
|
50
|
|
|
INFORMATION
CONCERNING STAR MARITIME ACQUISITION CORP.
|
53
|
|
|
SELECTED FINANCIAL
INFORMATION OF STAR MARITIME ACQUISITION CORP.
|
57
|
|
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION OF
STAR MARITIME
ACQUISITION CORP.
|
61
|
|
|
INFORMATION
CONCERNING STAR BULK CARRIERS CORP.
|
64
|
|
|
SELECTED
FINANCIAL INFORMATION OF STAR BULK CARRIERS CORP.
|
77
|
|
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
OF STAR BULK CARRIERS CORP.
|
78
|
|
| THE INTERNATIONAL DRY BULK SHIPPING INDUSTRY |
83
|
|
|
DIVIDEND
POLICY OF STAR BULK
|
95
|
|
|
STAR
BULK’S FORECASTED CASH AVAILABLE FOR DIVIDENDS, RESERVES AND EXTRAORDINARY
EXPENSES
|
96
|
|
|
CAPITALIZATION
OF STAR MARITIME
|
100
|
|
|
DILUTION
|
101
|
|
|
RELATED
PARTY TRANSACTIONS
|
102
|
|
|
DESCRIPTION
OF STAR MARITIME SECURITIES
|
104
|
|
|
DESCRIPTION
OF STAR BULK SECURITIES
|
107
|
|
|
COMPARISON
OF STAR MARITIME AND STAR BULK STOCKHOLDER RIGHTS
|
108
|
|
|
COMPARISON
OF MARSHALL ISLANDS CORPORATE LAW TO DELAWARE CORPORATE
LAW
|
115
|
|
|
TAX
CONSIDERATIONS
|
118
|
|
|
EXPERTS
|
127
|
|
|
LEGAL
MATTERS
|
127
|
|
|
STOCKHOLDER
PROPOSALS AND OTHER MATTERS
|
127
|
|
|
INDUSTRY
AND MARKET DATA
|
128
|
|
|
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
|
128
|
|
|
ENFORCEABILITY
OF CIVIL LIABILITIES
|
128
|
|
|
GLOSSARY
OF SHIPPING TERMS
|
130
|
|
|
INDEX
TO FINANCIAL STATEMENTS
|
F-1
|
|
Appendix
A
|
Memorandum
of Agreement relating to the A Duckling dated January 12, 2007 between
Star Bulk Carriers Corp., as buyer, and A Duckling Corporation, as
seller.
|
|
Appendix
B
|
Memorandum
of Agreement relating to the B Duckling dated January 12, 2007 between
Star Bulk Carriers Corp., as buyer, and B Duckling Corporation, as
seller.
|
|
Appendix
C
|
Memorandum
of Agreement relating to the C Duckling dated January 12, 2007 between
Star Bulk Carriers Corp., as buyer, and C Duckling Corporation, as
seller.
|
|
Appendix
D
|
Memorandum
of Agreement relating to the F Duckling dated January 12, 2007 between
Star Bulk Carriers Corp., as buyer, and F Duckling Corporation, as
seller.
|
|
Appendix
E
|
Memorandum
of Agreement relating to the G Duckling dated January 12, 2007 between
Star Bulk Carriers Corp., as buyer, and G Duckling Corporation, as
seller.
|
|
Appendix
F
|
Memorandum
of Agreement relating to the I Duckling dated January 12, 2007 between
Star Bulk Carriers Corp., as buyer, and I Duckling Corporation, as
seller.
|
|
Appendix
G
|
Memorandum
of Agreement relating to the J Duckling dated January 12, 2007 between
Star Bulk Carriers Corp., as buyer, and J Duckling Corporation, as
seller.
|
|
Appendix
H
|
Memorandum
of Agreement relating to the Mommy Duckling dated January 12, 2007
between
Star Bulk Carriers Corp., as buyer, and Mommy Duckling Corporation,
as
seller.
|
|
Appendix
I
|
Supplemental
Agreement, dated January 12, 2007.
|
|
Appendix
J
|
Master
Agreement, dated January 12, 2007.
|
|
Appendix
K
|
Agreement
and Plan of Merger by and between Star Maritime Acquisition Corp.
and Star
Bulk Carriers Corp.
|
|
Appendix
L
|
Form
of Proxy.
|
| Q: |
What
is the purpose of this
document?
|
|
A:
|
This
document serves as Star Maritime’s proxy statement and as the prospectus
of Star
Bulk.
As a proxy statement, this document is being provided to Star Maritime
stockholders because the Star Maritime board of directors is soliciting
their proxies to vote to approve, at a special meeting of stockholders,
the merger of Star Maritime with and into its wholly-owned Marshall
Islands subsidiary, Star Bulk, with Star Bulk as the surviving
corporation. Star Bulk has entered into definitive agreements to
acquire a
fleet of eight drybulk carriers from certain subsidiaries of TMT for
an aggregate purchase price of $345,237,520, consisting of $224,500,000
in
cash and 12,537,645 shares of common stock. As a prospectus, Star
Bulk
is
providing this document to Star Maritime stockholders because Star
Bulk
is
offering its shares in exchange for shares of Star Maritime common
stock
and Star Bulk is assuming the outstanding warrants of Star Maritime
in the
Redomiciliation Merger. The registration statement on Form F-1/F-4
of
which this joint proxy statement/prospectus is a part is being filed
by
Star Bulk to register the shares being offered in exchange for shares
of
Star Maritime, the 20,000,000 warrants of Star Maritime that will
be
assumed by Star Bulk, the
20,000,000 shares of Star Bulk common stock issuable upon exercise
of such
warrants and to register up to 14,144,607 shares of common stock
that Star Bulk will issue to TMT or subsequently to TMT's
affiliates in respect of the stock consideration portion of the
aggregate purchase price of the vessels in the initial fleet. The
shares
of common stock that Star Bulk will issue in exchange for shares
of Star
Maritime are referred to herein as the Merger Consideration.
|
|
Q:
|
What
matters will we be asked to vote on at the Star
Maritime
special meeting?
|
|
A:
|
There
is one proposal on which you are being asked to vote. At the special
meeting, you will be asked to consider and vote upon a
proposal to approve and authorize the
merger of Star Maritime with and into its wholly-owned Marshall
Islands subsidiary, Star Bulk, with Star Bulk as the surviving
corporation. Star Bulk has entered into definitive agreements to
acquire a
fleet of eight drybulk carriers from
certain wholly-owned subsidiaries of TMT for an aggregate purchase
price
of $345,237,520, consisting of $224,500,000 in cash and 12,537,645
shares
of common stock of Star Bulk. As
a result of the Redomiciliation Merger (i) the separate
corporate existance of Star Maritime will cease; (ii) each
outstanding share of Star Maritime common stock, par value $0.0001
per
share, will be converted into the right to receive one share of Star
Bulk
common stock, par value $0.01 per share; and (ii) each outstanding
warrant
of Star Maritime will be assumed by Star Bulk with the same terms
and
restrictions, except that each will be exercisable for common stock
of
Star Bulk.
|
|
Q:
|
Could
you tell me more about the definitive agreements to acquire the vessels?
|
|
A:
|
Star
Bulk will acquire the fleet of eight drybulk carriers pursuant to
separate
memoranda of agreement, which we collectively refer to as the
MOAs, by and between Star Bulk and the vessel-owning subsidiaries of
TMT, each as supplemented by a Supplemental Agreement by and among
Star Maritime, Star Bulk and TMT, and a Master Agreement by and among
Star
Maritime, Star Bulk and TMT. We refer to the MOAs, the Supplemental
Agreement and the Master Agreement collectively as the Acquisition
Agreements. The acquisition of the vessels by Star Bulk is contingent
upon, among other things, the approval and consummation of the
Redomiciliation Merger. Copies
of the MOAs are attached to this joint proxy statement/prospectus
as
Appendices A-H. A copy of the Supplemental Agreement is attached
to this
joint proxy statement/prospectus as Appendix I. A copy of the Master
Agreement is attached to this joint proxy statement/prospectus as
Appendix
J.
|
|
Q:
|
Could
you tell me more about the parties to the Acquisition
Agreements?
|
|
A:
|
Star
Maritime was organized under the laws of the State of Delaware on
May 13,
2005 and is a Business Combination Company™,
or BCC™,
which is a blank check company formed to acquire, through a merger,
capital stock exchange, asset acquisition or similar business combination,
one or more target businesses in the shipping industry. A
target business includes one or more entities with agreements to
acquire
vessels or an operating business in the shipping
industry. Following our formation, our officers and directors
were the holders of 9,026,924 shares of common stock representing
all of
our then issued and outstanding capital stock. On December 21, 2005,
we consummated our initial public offering of 18,867,500 units, at
a price
of $10.00 per unit, which we refer to as the Initial Public Offering,
each
unit consisting of one share of Star Maritime common stock and one
warrant
to purchase one share of Star Maritime common stock. In addition,
we
completed a private placement of an aggregate of 1,132,500 units,
which we
refer to as the Private Placement, to Messrs. Tsirigakis and Syllantavos,
our senior executive officers and Messrs. Pappas and Erhardt, two
of our
directors. The gross proceeds of the Private Placement of $11,325,500
were
used to pay all fees and expenses of the Initial Public Offering.
As a
result, the entire gross proceeds of the Initial Public Offering
of
$188,675,000 were deposited in a trust account maintained by American
Stock Transfer & Trust Company, as trustee, which we refer to as the
Trust Account. If we do not complete the Redomiciliation Merger or
another business combination transaction with a target business
by December 21, 2007, we will be liquidated and we will
distribute to all holders of our shares issued in the
Initial Public Offering in proportion to their respective equity
interests, an aggregate sum equal to the amount in the Trust Account,
including any interest (net of any taxes payable) not previously
released
to us, plus any remaining net assets. Our officers and directors
have
agreed to waive their respective rights to participate in any liquidation
distribution should we fail to consummate a business combination
transaction with respect to the aggregate of 9,026,924 shares of
common
stock issued to them prior to our Initial Public Offering and with
respect
to the aggregate of 1,132,500 shares of common stock acquired by
certain
of our officers and directors in the Private Placement. In the event
of
our liquidation, we would not distribute funds from the Trust Account
with
respect to the Star Maritime warrants, which would expire worthless.
|
|
TMT
is a global shipping company with its management
headquarters located in Taiwan. TMT has approximately 50 years of
experience in the shipping industry. TMT owns and/or operates or
invests
in vessels in several shipping sectors, including crude oil tankers,
drybulk carriers and liquified natural gas, or LNG,
carriers.
|
| Q: |
When
and where is the special meeting of Star
Maritime
stockholders?
|
|
A:
|
The
special meeting of Star
Maritime
stockholders will take place at ,
New York, New York, on ,
2007, at 10:00 a.m.
|
|
Q:
|
Who
may vote at the special
meeting?
|
|
A:
|
Only
holders of record of shares of Star
Maritime
common stock as of the close of business on
,
2007 may vote at the special meeting. As of March 9, 2007, there
were
29,026,924 shares of Star
Maritime
common stock outstanding and entitled to vote.
|
| Q: |
What
is the required vote to approve and authorize the Redomiciliation
Merger?
|
|
Q:
|
Has
the board of directors of Star
Maritime
recommended approval of the Redomiciliation
Merger?
|
|
A:
|
Yes.
Star
Maritime’s
board of directors has unanimously recommended to its stockholders
that
they vote “FOR”
the approval and authorization of the Redomiciliation Merger at the
special meeting. For
various shipping regulatory and tax reasons, the Republic of the
Marshall Islands is an attractive country of incorporation for
international shipping companies. The merger of Star Maritime with
and
into Star Bulk with Star Bulk as the surviving corporation will enable
Star Bulk, which will be an operating company, to benefit from such
advantages. Please
read “Background and Reasons for the Merger—Recommendations
of the Board of Directors”
for a discussion of the factors that the Star
Maritime’s
board of directors considered in deciding to recommend the approval
and
authorization of the Redomiciliation
Merger.
|
|
Q:
|
What
will I receive in the Redomiciliation
Merger?
|
|
A:
|
Pursuant
to the Merger Agreement, each outstanding share of Star
Maritime
common stock will be converted into the right to receive one share
of Star
Bulk common stock and each outstanding warrant of Star Maritime will
be
assumed by Star Bulk and contain the same terms and restrictions
except
that each will be exercisable for common stock of Star Bulk.
|
| Q: |
What
are the tax consequences of the Redomiciliation Merger to
me?
|
|
A.
|
A
holder of Star Maritime stock or warrants should not recognize any
taxable
gain or loss as a result of the Redomiciliation Merger. The
Redomiciliation Merger has been structured so that upon completion
of the
Redomiciliation Merger and issuance of Star Bulk shares to TMT, the
stockholders of Star Maritime will own less than 80% of Star Bulk.
Therefore, Star Bulk intends to take the position on its U.S. federal
income tax return that it is not subject to Section 7874(b) of the
U.S.
Internal Revenue Code of 1986, as amended, or the Code, after the
Redomiciliation Merger and therefore should not be subject to U.S.
federal
income tax as a U.S. domestic corporation on its worldwide income
after
the Redomiciliation Merger. However, Star Maritime has not sought
a ruling
from the U.S. Internal Revenue Service, or the IRS, on this point.
Therefore, there is no assurance that the IRS would not seek to assert
that Star Bulk is subject to U.S. federal income tax on its worldwide
income after the Redomiciliation Merger, although Star Maritime believes
that such an assertion would not be
successful.
|
|
Q:
|
What
if I object to the Redomiciliation
Merger?
|
|
A:
|
Under
Star Maritime’s Certificate of Incorporation, holders of shares of Star
Maritime common stock have the right to redeem such shares for
cash if
such stockholder votes against the Redomiciliation Merger, elects
to
exercise redemption rights and the Redomiciliation Merger is approved
and completed. In order to exercise redemption rights, an eligible
stockholder must vote against the Redomiciliation Merger and elect
to
exercise redemption rights on the enclosed proxy card. If a stockholder
votes against the Redomiciliation Merger but fails to properly
exercise
redemption rights, such stockholder will not be entitled to have
its
shares redeemed for cash. Stockholders exercising redemption rights
will
be entitled to receive, for each share of common stock redeemed,
the pro
rata portion of the Trust Account in which the proceeds of the
Company’s
Initial Public Offering are held, plus interest earned thereon
(net of
taxes). The actual redemption price will be equal to $10.21 per
share,
based on funds in the Trust Account as of December 31, 2006. If
you exercise your redemption rights, then you will be exchanging
your
shares of Star Maritime’s common stock for cash and will no longer own
these shares. You will only be entitled to receive cash for these
shares
if you continue to hold these shares through the effective date
of the
Redomiciliation Merger and then tender your stock certificate to
Star
Maritime. If the Redomiciliation Merger is not completed, then
these
shares will not be redeemed for cash. A stockholder who exercises
redemption rights will continue to own any warrants to acquire
Star
Maritime common stock owned by such stockholder as such warrants
will
remain outstanding and unaffected by the exercise of redemption
rights.
See “Description of Star Maritime Securities—Common
Stock.”
|
|
Q:
|
How
can I vote?
|
|
A:
|
Please
vote your shares of Star
Maritime
common stock as soon as possible after carefully reading and
considering the information contained in this joint proxy
statement/prospectus.
You may vote your shares prior to the special meeting by signing
and
returning the enclosed proxy card. If you hold your shares in “street
name” (which means, in other words, that you hold your shares through a
bank, brokerage firm or nominee), you must vote in accordance with
the
instructions on the voting instruction card that your bank, brokerage
firm
or nominee provides to you.
|
|
Q:
|
If
my shares are held in “street name” by my bank, brokerage firm or nominee,
will they automatically vote my shares for
me?
|
|
A:
|
No.
Your bank, brokerage firm or nominee cannot vote your shares without
instructions from you. You should instruct your bank, brokerage firm
or
nominee how to vote your shares, following the instructions contained
in
the voting instruction card that your bank, brokerage firm or nominee
provides to you.
|
|
Q:
|
What
if I abstain from voting or fail to instruct my bank, brokerage firm
or
nominee?
|
|
A:
|
Abstaining
from voting or failing to instruct your bank, brokerage firm or nominee
to
vote your shares will have the same effect as a vote “against” the
Redomiciliation Merger.
|
|
Q:
|
Can
I change my vote after I have mailed my proxy
card?
|
|
A:
|
Yes.
You may change your vote at any time before your proxy is voted at
the
special meeting. You may revoke your proxy by executing and returning
a
proxy card dated later than the previous one, by attending the special
meeting
in
person
and casting your vote by ballot or by submitting a written revocation
stating that you would like to revoke your proxy. If you hold your
shares
through a bank, brokerage firm or nominee, you should follow the
instructions of your bank, brokerage firm or nominee regarding the
revocation of proxies. You should send any notice of revocation or
your
completed new proxy card, as the case may be,
to:
|
|
Q:
|
Should
I send in my stock certificates
now?
|
|
A:
|
No.
After we complete the Redomiciliation Merger, you will receive written
instructions for returning your stock certificates. These instructions
will tell you how and where to send in your stock certificates in
order to
receive the Merger Consideration.
|
|
Q:
|
When
is the Redomiciliation Merger expected to occur?
|
|
A:
|
Assuming
the requisite the stockholder vote, we expect that the Redomiciliation
Merger will occur during the third quarter of 2007. Our Certificate
of
Incorporation provides that if we have entered into definitive
agreements
to effect a business combination prior to June 21, 2007, we must
consummate such business combination by December 21, 2007. Our
agreements
with TMT qualify as definitive agreements for these
purposes.
|
| Q: |
May
I seek statutory appraisal rights with respect to my
shares?
|
| A: |
Under
applicable Delaware law, you do not have appraisal rights with respect
to
your shares.
|
| Q: |
What
happens if the Redomiciliation Merger is not
consummated?
|
| A: |
The
acquisition of the eight drybulk carriers from TMT is contingent
upon the
approval and consummation of the Redomiciliation Merger. If Star
Maritime
does not consummate the Redomiciliation Merger or another
transaction with a target business by December 21, 2007, then
pursuant to Article SIXTH of its Certificate of Incorporation,
Star
Maritime's officers must take all actions necessary in accordance
with the
Delaware General Corporation Law to dissolve and liquidate Star
Maritime
within 60 days of that date. Following dissolution, Star Maritime
would no longer exist as a corporation. In any liquidation, the
funds held
in the Trust Account, plus any interest earned thereon (net of
taxes),
together with any remaining out-of-trust net assets will be distributed
pro-rata to holders
of shares of Star Maritime common stock who acquired such shares
of common
stock in Star Maritime’s Initial Public Offering or in the aftermarket.
Holders of shares issued prior to our Initial Public Offering
including in the Private Placement have waived any right to any
liquidation distribution with respect to such
shares.
|
| Q: |
What
happens post-Redomiciliation Merger to the funds deposited
in the Trust
Account?
|
| A: |
Star
Maritime stockholders exercising redemption rights will receive
their pro
rata portion of the Trust Account. The balance of the funds in the
account will be retained by Star Bulk and utilized to fund
a portion of
the cash portion of the purchase price for the eight vessels
to be
acquired by Star Bulk.
|
| Q: |
What
other important considerations are
there?
|
| A: |
You
should also be aware that in pursuing the Redomiciliation
Merger, Star
Maritime has incurred substantial expenses. Star Maritime
currently has
limited available funds outside the Trust Account and will,
therefore, be
required to borrow funds or make arrangements with vendors
and service
providers in reliance on the expectation that such expenses
will be paid
by Star Bulk following consummation of the Redomiciliation
Merger. If for
any reason the Redomiciliation Merger is not consummated,
Star Maritime's
creditors may seek to satisfy their claims from funds in
the Trust
Account. This could result in further depletion of the Trust Account,
which would reduce a stockholder's pro
rata portion of the Trust Account upon
liquidation.
|
| Q: |
Who
will manage Star
Bulk?
|
| A: |
Messrs.
Tsirigakis and Syllantavos, who currently serve as the Chief
Executive
Officer and director and Chief Financial Officer and director
of Star
Maritime, respectively, will serve in these roles at Star
Bulk following
the Redomiciliation Merger. In addition, Messrs. Pappas,
Erhardt and Søfteland,
who currently serve as directors of Star Maritime, as well
as Messrs. Nobu
Su and Peter Espig, each of whom are nominees of TMT, will serve as
directors of Star Bulk.
|
| Q: |
What
is the anticipated dividend policy of Star
Bulk?
|
| A: |
Star
Bulk currently intends to pay quarterly dividends to the
holders of its
common shares in February, May, August and November, in
amounts that will
allow it to retain a portion of its cash flows to fund
vessel or fleet
acquisitions, and for debt repayment and dry-docking and
operating costs, as determined by its management and board of
directors. The payment of dividends is not guaranteed or
assured and may
be discontinued at the sole discretion of Star Bulk’s board of directors
and may not be paid in the anticipated amounts and frequency
set forth in
this joint proxy statement/prospectus. Star Bulk’s board of directors will
continually review its dividend policy and make adjustments
that it
believes appropriate. See “Dividend Policy of Star
Bulk.”
|
|
Star
Maritime Acquisition Corp.
103
Foulk Road
Wilmington,
Delaware 19803
Telephone: (302)
656-1950
|
|
| · |
Star
Maritime’s officers and directors were issued a total of 9,026,924 shares
of Star Maritime common stock prior to the Initial Public Offering.
These
shares, without taking into account any discount that may be associated
with certain restrictions on these shares, collectively have a market
value of approximately $89,998,432 based on Star Maritime’s share price of
$9.97 as of March 9, 2007. Except for up to 200,000 shares that may
be
required to be surrendered by such individuals for cancellation upon
the
exercise of redemption rights by the holders of Star Maritime's
common stock, none of the 9,026,924 shares issued prior to the Initial
Public Offering to these individuals may be released from escrow
until December 15, 2008 during which time the value of the shares
may
increase or decrease; however, since such shares were acquired for
$.003
per share, the holders are likely to benefit from the Redomiciliation
Merger notwithstanding any decrease in the market price of the
shares. Further, if the Redomiciliation Merger is not approved and
Star
Maritime fails to consummate an alternative transaction within the
requisite period and the Company is therefore required to liquidate,
such
shares do not carry the right to receive any distributions upon
liquidation.
|
| · |
Messrs.
Tsirigakis and Syllantavos, our senior executive officers and Messrs.
Pappas and Erhadt, two of our directors, purchased an aggregate of
1,132,500 units in the Private Placement at a purchase price of
$10.00 per unit. Star Maritime’s officers and directors agreed to
vote their common shares included in the units in favor of the
Redomiciliation Merger and thereby waive redemption rights with respect
to those shares. If the Redomiciliation Merger is not approved and
Star Maritime fails to consummate an alternative transaction within
the
requisite period and Star Maritime is therefore required to
liquidate, those shares do not carry the right to receive
distributions upon liquidation.
|
| · |
After
the completion of the Redomiciliation Merger, Mr. Tsirigakis will
serve as
Star Bulk’s Chief Executive Officer and President and Mr. Syllantavos will
serve as Star Bulk’s Chief Financial Officer. Star Bulk’s board of
directors will be comprised of seven directors. Each of the five
current directors of Star Maritime will serve as directors of Star
Bulk. In addition Mr. Su and Mr. Espig, each a nominee of TMT, will
serve
as directors. Mr. Pappas and Mr. Su will each serve as
non-executive Co-Chairman of the board of Star Bulk. Such individuals
will, following the Redomiciliation Merger, be compensated in such
manner,
and in such amounts, as Star Bulk’s board of directors may determine to be
appropriate. See “Information Concerning Star Bulk—Compensation
of Directors and Senior
Management.”
|
| · |
Star
Bulk has entered into time charters for two vessels in the
initial fleet with TMT. Effective as of the Redomiciliation Merger,
Mr. Nobu Su and Mr. Peter Espig of TMT will serve on Star Bulk's
board of
directors.
|
| · |
Upon
satisfaction or waiver of all obligations of all parties, arising
underneath Merger Agreement, the Supplement Agreement and the MOAs;
and
|
| · |
if
the Redomiciliation Merger is not approved by the required vote
of Star
Maritime’s stockholders;
|
| · | if the other conditions precedent set forth in the Master Agreement are not satisfied or waived. |
|
As
of February 5, 2007
|
||||
|
Assets
|
||||
|
Current
assets
|
||||
|
Cash
and cash equivalents
|
1,000
|
|||
|
Total
current assets
|
1,000
|
|||
|
Total
assets
|
1,000
|
|||
|
Liabilities
and Shareholders' Equity
|
||||
|
Commitments
and contingencies (Note 4)
|
-
|
|||
|
Shareholders’
Equity
|
|
|||
|
Common
stock (100,000,000 shares authorized, par value $0.01 per share,
500 issued and outstanding)
|
5
|
|||
| Preferred stock (25,000,000 shares authorized, par value $0.01 per share, none issued and outstanding) | ||||
|
Paid-in
capital
|
995
|
|||
|
Total
shareholders' equity
|
1,000
|
|||
|
Total
liabilities and shareholders’ equity
|
1,000
|
|||
|
|
December
31, 2006
|
December
31, 2005
|
|||||
|
ASSETS
|
|||||||
|
Current
Assets
|
|||||||
|
Cash
|
$
|
2,118,141
|
$
|
593,281
|
|||
|
Investments
in trust account
|
192,915,257
|
188,858,542
|
|||||
|
Prepaid
expenses and other current assets
|
149,647
|
118,766
|
|||||
|
|
|||||||
|
Total
Current Assets
|
195,183,045
|
189,570,589
|
|||||
|
|
|||||||
|
Property
and Equipment, net
|
3,256
|
-
|
|||||
|
Deferred
tax asset
|
-
|
9,000
|
|||||
|
|
|||||||
|
TOTAL
ASSETS
|
$
|
195,186,301
|
$
|
189,579,589
|
|||
|
|
|||||||
|
LIABILITIES
& STOCKHOLDERS’ EQUITY
|
|||||||
|
Liabilities
|
|||||||
|
Accounts
payable & accrued expenses
|
$
|
603,520
|
$
|
344,638
|
|||
|
Deferred
Interest on investments
|
2,163,057
|
||||||
|
Deferred
underwriting fees
|
4,000,000
|
4,000,000
|
|||||
|
Income
taxes payable
|
206,687
|
|
|||||
|
Total
Liabilities
|
6,973,264
|
4,344,638
|
|||||
|
Common
Stock, $.0001 par value, 6,599,999 shares subject to possible redemption,
at redemption value of $9.80 per share
|
64,679,990
|
64,679,990
|
|||||
|
|
|||||||
|
Commitments
|
|||||||
|
|
|||||||
|
Stockholders’
Equity
|
|||||||
|
Preferred
Stock, $.0001 par value; authorized, 1,000,000 shares; none issued
or
outstanding
|
-
|
||||||
|
Common
Stock, $.0001 par value, authorized, 100,000,000 shares; 29,026,924
shares
issued and outstanding
|
2,903
|
2,903
|
|||||
|
(including
6,599,999 shares subject to possible redemption)
|
|||||||
|
Additional
paid in capital
|
120,441,727
|
120,441,727
|
|||||
|
Earnings
accumulated in the development stage
|
3,088,417
|
110,331
|
|||||
|
Total
Stockholders’ Equity
|
123,533,047
|
120,554,961
|
|||||
|
|
|||||||
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
195,186,301
|
$
|
189,579,589
|
|||
|
|
For
the Year
Ended
December
31,
2006
|
May
13, 2005
(date
of inception)
to
December
31,
2005
|
May
13, 2005
(date
of inception)
to
December
31,
2006
|
|||||||
|
|
|
|
|
|||||||
|
Operating
expenses
|
||||||||||
|
Professional
fees
|
$
|
596,423
|
$
|
19,600
|
$
|
616,023
|
||||
|
Insurance
|
112,242
|
4,234
|
116,476
|
|||||||
|
Due
diligence costs
|
262,877
|
-
|
262,877
|
|||||||
|
Other
|
239,558
|
26,377
|
265,935
|
|||||||
|
Total
operating expenses
|
1,211,100
|
50,211
|
1,261,311
|
|||||||
|
Interest
income
|
4,395,873
|
183,542
|
4,579,415
|
|||||||
|
Income
before provision for income taxes
|
3,184,773
|
133,331
|
3,318,104
|
|||||||
|
Provision
for income taxes
|
206,687
|
23,000
|
229,687
|
|||||||
|
Net
income
|
$
|
2,978,086
|
$
|
110,331
|
$
|
3,088,417
|
||||
|
Earnings
per share (basic and diluted)
|
$
|
0.10
|
$
|
0.01
|
$
|
0.14
|
||||
|
Weighted
average shares outstanding - basic and diluted
|
29,026,924
|
9,918,282
|
21,601,120
|
|||||||
|
For
the Year Ended December 31, 2006
|
May
13, 2005 (date of inception) to December 31, 2005
|
May
13, 2005 (date of inception) to December 31, 2006
|
||||||||
|
Cash
flows from operating activities:
|
|
|
|
|||||||
|
Net
Income
|
$
|
2,978,086
|
$
|
110,331
|
$
|
3,088,417
|
||||
|
Adjustments
to reconcile net income to net cash used in operating
activities:
|
|
|
|
|||||||
|
Depreciation
|
408
|
|
408
|
|||||||
|
Changes
in operating assets and liabilities:
|
|
|
-
|
|||||||
|
Increase
in value of trust account
|
(4,056,715
|
)
|
(183,542
|
)
|
(4,240,257
|
)
|
||||
|
Increase
in prepaid expenses and other current assets
|
(30,881
|
)
|
(118,766
|
)
|
(149,647
|
)
|
||||
|
Decrease
(increase) in deferred tax asset
|
9,000
|
(9,000
|
)
|
-
|
||||||
|
Increase
in accounts payable and accrued expenses
|
429,467
|
174,053
|
603,520
|
|||||||
|
Increase
in deferred interest
|
2,163,057
|
-
|
2,163,057
|
|||||||
|
Increase
in taxes payable
|
206,687
|
-
|
206,687
|
|||||||
|
Net
cash provided by (used in) operating activities
|
1,699,109
|
(26,924
|
)
|
1,672,185
|
||||||
|
|
||||||||||
|
Cash
flows from investing activities:
|
|
|
|
|||||||
|
Payment
to trust account
|
-
|
(188,675,000
|
)
|
(188,675,000
|
)
|
|||||
|
Capital
expenditures
|
(3,664
|
)
|
-
|
(3,664
|
)
|
|||||
|
Net
cash used in investing activities
|
(3,664
|
)
|
(188,675,000
|
)
|
(188,678,664
|
)
|
||||
|
|
||||||||||
|
Cash
flows from financing activities:
|
|
|
|
|||||||
|
Gross
proceeds from public offering
|
|
188,675,000
|
188,675,000
|
|||||||
|
Gross
proceeds from private placement
|
|
11,325,000
|
11,325,000
|
|||||||
|
Proceeds
of note payable to stockholder
|
-
|
590,000
|
590,000
|
|||||||
|
Repayment
of note payable to stockholder
|
-
|
(590,000
|
)
|
(590,000
|
)
|
|||||
|
Proceeds
from sale of shares of common stock
|
-
|
25,000
|
25,000
|
|||||||
|
Payment
of offering costs
|
(170,585
|
)
|
(10,729,795
|
)
|
(10,900,380
|
)
|
||||
|
Net
cash provided by financing activities
|
(170,585
|
)
|
189,295,205
|
189,124,620
|
||||||
|
Net
cash increase for period
|
1,524,860
|
593,281
|
2,118,141
|
|||||||
|
Cash
at beginning of period
|
593,281
|
-
|
-
|
|||||||
|
Cash
at end of period
|
$
|
2,118,141
|
$
|
593,281
|
$
|
2,118,141
|
||||
|
Supplemental
cash disclosure
|
|
|
|
|||||||
|
Interest
paid
|
$
|
-
|
$
|
9,163
|
$
|
9,163
|
||||
|
Supplemental
schedule of non-cash financing activities
|
|
|
|
|||||||
|
Accrual
of deferred underwriting fees
|
$
|
-
|
$
|
4,000,000
|
$
|
4,000,000
|
||||
|
Accrual
of offering costs
|
$
|
-
|
$
|
170,585
|
|
|||||
|
Star
Maritime Acquisition Corp.
|
Pro
Forma Adjustments (with no stock
redemption)
|
Combined
|
Additional
Pro Forma Adjustments
(with 6,599,999 shares of common stock
redemption)
|
Combined
(stock redemption)
|
||||||||||||||||
|
ASSETS
|
||||||||||||||||||||
|
CURRENT
ASSETS:
|
||||||||||||||||||||
|
Cash
and cash equivalents
|
2,118,141
|
40,000,000
|
(a)
|
|
1,633,398
|
66,843,047
|
(h)
|
|
1,633,398
|
|||||||||||
|
192,915,257
|
(b)
|
|
(64,679,990
|
)
|
(i)
|
|
||||||||||||||
|
(224,500,000
|
)
|
(c)
|
|
|
(2,163,057
|
)
|
(j)
|
|
|
|||||||||||
|
(4,900,000
|
)
|
(e)
|
|
|||||||||||||||||
|
(4,000,000
|
)
|
(f)
|
|
|||||||||||||||||
|
Investment
in trust account
|
192,915,257
|
(192,915,257
|
)
|
(b)
|
|
-
|
-
|
|||||||||||||
|
Prepaid
expenses and other current assets
|
149,647
|
149,647
|
149,647
|
|||||||||||||||||
|
Total
current assets
|
195,183,045
|
1,783,045
|
1,783,045
|
|||||||||||||||||
|
Fixed
assets, net
|
3,256
|
3,256
|
3,256
|
|||||||||||||||||
|
Vessels,
net
|
345,200,000
|
(c)
|
|
345,200,000
|
345,200,000
|
|||||||||||||||
|
Total
assets
|
195,186,301
|
346,986,301
|
346,986,301
|
|||||||||||||||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||||||||||||||
|
CURRENT
LIABILITIES:
|
||||||||||||||||||||
|
Accounts
payable and accrued expenses
|
603,520
|
603,520
|
603,520
|
|||||||||||||||||
|
Deferred
interest on investment
|
2,163,057
|
(2,163,057
|
)
|
(g)
|
|
-
|
-
|
|||||||||||||
|
Deferred
underwriting fees
|
4,000,000
|
(4,000,000
|
)
|
(f)
|
|
-
|
-
|
|||||||||||||
|
Income
taxes payable
|
206,687
|
206,687
|
206,687
|
|||||||||||||||||
|
Total
current liabilities
|
6,973,264
|
810,207
|
810,207
|
|||||||||||||||||
|
Long-term
debt
|
-
|
40,000,000
|
(a)
|
|
40,000,000
|
66,843,047
|
(h)
|
|
106,843,047
|
|||||||||||
|
Total
liabilities
|
6,973,264
|
40,810,207
|
107,653,254
|
|||||||||||||||||
|
Common
Stock, 6,599,999 subject to possible redemption at a redemption
value of
$9.80 per share
|
64,679,990
|
(64,679,990
|
)
|
(d)
|
|
-
|
-
|
|||||||||||||
|
Commitments
|
-
|
|||||||||||||||||||
|
STOCKHOLDERS'
EQUITY
|
||||||||||||||||||||
|
Preferred
stock, $.0001 par value; authorized, 1,000,000 shares, none issued
or
outstanding
|
-
|
-
|
||||||||||||||||||
|
Common
stock, $.0001 par value; authorized, 100,000,000 shares; 29,026,924
shares
issued and outstanding (including 6,599,999 shares subject to
possible
redemption)
|
2,903
|
1,254
|
(c)
|
|
||||||||||||||||
|
660
|
(d)
|
|
4,817
|
(660
|
)
|
(i)
|
|
4,137
|
||||||||||||
|
Additional
paid-in capital
|
120,441,727
|
120,698,746
|
(c)
|
|
300,919,803
|
(20
|
)
|
(k)
|
|
|||||||||||
|
64,679,330
|
(d)
|
|
|
(64,679,330
|
)
|
(i)
|
|
|||||||||||||
|
(4,900,000
|
)
|
(e)
|
|
20
|
(k)
|
|
236,240,493
|
|||||||||||||
|
Earnings
accumulated in the development stage
|
3,088,417
|
2,163,057
|
(g)
|
|
5,251,474
|
(2,163,057
|
)
|
(j)
|
|
3,088,417
|
||||||||||
|
|
-
|
|||||||||||||||||||
|
Total
stockholders' equity
|
123,533,047
|
306,176,094
|
239,333,047
|
|||||||||||||||||
|
Total
liabilities and stockholders' equity
|
195,186,301
|
346,986,301
|
-
|
346,986,301
|
||||||||||||||||
|
(a)
|
Reflects
the drawdown of the loan of $40,000,000 under the credit facility
described in “Acquisition Financing”. Star
Bulk has received indication letters from international shipping
lenders
that will, subject to the approval of the Agreement and Plan
of Merger,
provide Star Bulk with a credit facility of up to $120,000,000
with an
eight-year term and secured by five of the eight drybulk carriers
that
Star Bulk has agreed to acquire from TMT. Star Bulk intends to
draw down
$40,000,000 under the credit facility on the effective date of
the
Redomiciliation Merger to fund a portion of the cash consideration
of the
aggregate purchase price of in the initial fleet. The remaining
funds
under the credit facility may be used to replace funds from our
Trust
Account used to pay costs relating to the redemption of Star
Maritime
stockholders who vote against the Redomiciliation Merger and
elect to
redeem their shares. Any excess un-drawn funds under the credit
facility
may be used for additional vessel acquisitions and to provide
working
capital.
|
|
(b)
|
To
transfer the total Investment in trust account balance to the
operating
cash account.
|
|
(c)
|
Reflects
the purchase of Star Maritime’s acquisition
of eight drybulk carriers from certain subsidiaries of TMT for
an
aggregate purchase price of $345.2 million consisting of $224.5
million
payable in cash and $120.7 million payable in 12,537,645 common
shares of
Star Bulk.
|
|
(d)
|
In
conjunction with the Redomiciliation Merger, all non-redeemed
common stock
forfeits redemption rights.
|
|
(e)
|
To
record transaction costs comprised of: advisor fees of $2.8 million,
legal
fees of $1.1 million, $0.7 million in accounting fees and other
fees of
$0.3 million.
|
|
(f)
|
To
reflect payment of underwriters’ deferred compensation, related to
services provided in connection with Star Maritime’s Initial Public
Offering in December 2005.
|
|
(g)
|
To
record interest on Trust Account previously
deferred.
|
|
(h)
|
To
drawdown an additional $66.8 million under the Company’s credit facility
of up to $120 million to replace funds from the Trust Account used
for the payment of redemption value and deferred interest to
investors.
|
|
(i)
|
Reflects
the redemption of 32.99% of Star Maritime shares of common stock
issued in
the Company’s Initial Public Offering (“IPO shares”), at December 31, 2006
redemption value of $9.80 per share. The number of shares assumed
redeemed, 6,599,999, is based on 32.99% of the IPO shares outstanding
prior to the Redomiciliation Merger and represents the maximum
number of
shares that may be redeemed without precluding the consummation
of the
Redomiciliation Merger.
|
|
(j)
|
To
reflect the payment of interest earned by the redeeming
shareholders.
|
| (k) |
Reflects
the 200,000 common shares certain of our officers and directors
have
agreed to surrender for cancellation upon the consummation of
a business
combination in the event public stockholders exercise their right
to have
Star Maritime redeem their shares for
cash.
|
|
Units
|
Common
Stock
|
Warrants
|
|||||||||||||||||
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
||||||||||||||
|
2005:
|
|||||||||||||||||||
|
Fourth
Quarter (December 16 to December 31)
|
$10.00
|
$9.82
|
NA
|
NA
|
NA
|
NA
|
|||||||||||||
|
2006:
|
|
||||||||||||||||||
|
First
Quarter (January 1 to February 27)1
|
$10.25
|
$9.84
|
NA
|
NA
|
NA
|
NA
|
|||||||||||||
|
First
Quarter (February 27 to March 31)
|
NA
|
NA
|
$9.92
|
$9.62
|
$1.25
|
$0.87
|
|||||||||||||
|
Second
Quarter (April 1 to June 30)
|
NA
|
NA
|
$10.16
|
$9.47
|
$1.20
|
$0.87
|
|||||||||||||
|
Third
Quarter (July 1 to September 31)
|
NA
|
NA
|
$9.74
|
$9.45
|
$1.06
|
$0.70
|
|||||||||||||
|
Fourth
Quarter (October 1 to December 31)
|
NA
|
NA
|
$9.90
|
$9.60
|
$0.84
|
$0.55
|
|||||||||||||
|
|
|
||||||||||||||||||
|
2007:
|
|
|
|||||||||||||||||
|
First
Quarter (January 1 to January
16)2
|
NA
|
NA
|
$9.93
|
$9.87
|
$0.87
|
$0.72
|
|||||||||||||
|
First
Quarter (January 17 to March
9)
|
NA
|
NA
|
$10.02
|
$9.86
|
$1.72
|
$0.72
|
|
||||||||||||
|
•
|
Star
Maritime’s directors would, consistent with Delaware law and the
obligations described in its amended and restated certificate
of
incorporation to dissolve, prior to the passing of the December
21, 2007
deadline, convene and adopt a specific plan of dissolution and
liquidation, which it would then vote to recommend to its stockholders;
at
such time it would also cause to be prepared a preliminary proxy statement
setting out such plan of dissolution and liquidation as well
as the
board’s recommendation of such
plan;
|
|
•
|
upon
such deadline, it would file a preliminary proxy statement with
the
Securities and Exchange Commission;
|
|
•
|
if
the Securities and Exchange Commission does not review the preliminary
proxy statement, then, approximately 10 days following the passing
of such
deadline, it would mail the proxy statements to its stockholders,
and
approximately 30 days following the passing of such deadline
it would
convene a meeting of stockholders, at which they would either
approve or
reject the plan of dissolution and liquidation;
and
|
|
•
|
if
the Securities and Exchange Commission does review the preliminary
proxy
statement, Star Maritime currently estimates that it would receive
their
comments approximately 30 days following the passing of such
deadline.
Star Maritime would mail the proxy statements to stockholders
following
the conclusion of the comment and review process (the length
of which
cannot be predicted with any certainty, and which may be substantial)
and
it would convene a meeting of its stockholders at which they
would either
approve or reject the plan of dissolution and
liquidation.
|
| · |
demand
for and production of drybulk products;
|
| · |
the
distance cargo is to be moved by
sea;
|
| · |
global
and regional economic and political conditions;
|
| · |
environmental
and other regulatory developments; and
|
| · |
changes
in seaborne and other transportation patterns, including changes
in the
distances over which cargo is transported due to geographic changes
in
where commodities are produced and cargoes are used.
|
| · |
the
number of newbuilding deliveries;
|
| · |
the
scrapping rate of older vessels;
|
| · |
vessel
casualties;
|
| · |
price
of steel;
|
| · |
number
of vessels that are out of service;
|
| · |
changes
in environmental and other regulations that may limit the useful
life of
vessels; and
|
| · |
port
or canal congestion.
|
| · |
actual
or anticipated fluctuations in quarterly and annual
results;
|
| · |
limited
operating history;
|
| · |
mergers
and strategic alliances in the shipping
industry;
|
| · |
market
conditions in the industry;
|
| · |
changes
in government regulation;
|
| · |
fluctuations
in Star
Bulk’s
quarterly revenues and earnings and those of its publicly held
competitors;
|
| · |
shortfalls
in Star
Bulk’s
operating results from levels forecasted by securities
analysts;
|
| · |
announcements
concerning Star
Bulk
or
its competitors; and
|
| · |
the
general state of the securities markets.
|
| · |
the
delivery and operation of assets of Star Bulk, the surviving
corporation in the Redomiciliation
Merger;
|
| · |
Star
Bulk’s future operating or financial
results;
|
| · |
future,
pending or recent acquisitions, business strategy, areas of possible
expansion, and expected capital spending or operating expenses;
and
|
| · |
drybulk
market trends, including charter rates and factors affecting vessel
supply
and demand.
|
| · |
by
executing and returning a proxy card dated later than the previous
one to
Star Maritime at
103 Foulk Road, Wilmington, Delaware 19803; Attention: Corporate
Secretary;
|
| · |
by
attending the special meeting
in
person
and casting your vote by ballot; or
|
| · |
by
submitting a written revocation to Star Maritime at
103 Foulk Road, Wilmington, Delaware 19803; Attention: Corporate
Secretary.
|
| · |
earnings
potential of the acquired assets;
|
| · |
the
ability to redomicile outside of the United
States;
|
| · |
the
ability or willingness of the acquisition target to wait for the
period
required for the approval process;
|
| · |
degree
of demand for the provision of seaborne transportation versus the
vessel
supply in the sectors examined;
|
| · |
the
willingness of the acquisition target to accept no deposit or a deposit
that could be paid from Star Maritime’s working
capital;
|
| · |
the
proposed acquisition price compared to our assessment of potential
share
price
development post-acquisition;
|
| · |
the
willingness of the acquisition target to accept equity as part of
the
consideration;
|
| · |
charter
rates in the shipping sectors
examined;
|
| · |
regulatory
environment of the international shipping
industry;
|
| · |
costs
associated with effecting the business combination;
and
|
| · |
the
tax implications of each transaction
reviewed.
|
|
Nature
of Business
|
Activity
Period
|
Reasons
for rejection
|
||
|
Capesize
drybulk carrier fleet
|
March
2006
|
Price
disagreement
|
||
|
Tanker
fleet
|
March
2006
|
Seller
decided not to sell
|
||
|
Luxury
cruise line
|
April
2006
|
Did
not agree on valuation
|
||
|
Tanker
pool operator
|
April
2006
|
Sellers
opted for other buyer
|
||
|
Heavy
Lift fleet
|
July
2006
|
Star’s
proposal deemed low by sellers
|
||
|
Bulk
carrier fleet
|
July
2006
|
Down-payment
requirements
|
||
|
Tanker
fleet
|
August
2006
|
Seller
decided not to sell
|
||
|
Reefer
fleet
|
September
2006
|
Sector
dynamics
|
||
|
Bunkering
company
|
October
2006
|
Did
not agree on valuation
|
||
|
Offshore
Supply vessels
|
Sept/Oct
2006
|
U.S.
Jones Act restrictions
|
||
|
Numerous
small tanker and drybulk carrier fleets
|
Down-payment
requirements needed to combine two or more small fleets into a business
combination
|
| · |
the
fact that the merger of Star Maritime with and into Star Bulk with
Star
Bulk as the surviving corporation is expected to constitute a tax-free
reorganization under the Code;
|
| · |
the
quality of the vessels in the initial fleet, including the average
age of
approximately 10 years;
|
| · |
strong
demand for raw materials in recent years by developing countries,
particularly China and India, that has resulted in robust growth
for
drybulk shipping as well as increased charter
rates;
|
| · |
TMT’s
knowledge of and experience in the Asian shipping markets, particularly
within the drybulk sector and the related benefits that Star Bulk
would
derive from Mr. Nobu Su, TMT’s Chief Executive Officer
and Chairman, becoming a member and Co-Chairman of the board of
directors;
|
| · |
TMT’s
agreement to procure time charters at minimum charter rates with
respect to six of the eight vessels;
|
| · |
the
low level of borrowing required to complete the purchase of the vessels
which will enable Star Bulk, as the surviving corporation, to expand
its
fleet with future borrowings;
and
|
| · |
the
fact that the agreement to purchase
the eight vessels from TMT
was the result of a comprehensive review conducted by Star
Maritime’s
board (with the assistance of its financial and legal
advisors) of the strategic alternatives available to Star
Maritime.
|
| · |
the
possibility that the Redomiciliation Merger may not qualify as
a tax-free
reorganization under the Code;
|
| · |
TMT
may fail to deliver the vessels to Star Bulk;
|
| · |
TMT
may fail to procure charters that meet the minimum charter rates;
|
| · |
volatility
of charter rates and vessel values in the drybulk sector;
and
|
| · |
the
risks and costs to the
Company
if
the Redomiciliation Merger is not completed, including the need
to locate another suitable business combination or arrangement.
|
| · |
Star
Maritime’s officers and directors were issued a total of 9,026,924 shares
of Star Maritime common stock prior to the Initial Public Offering.
These
shares, without taking into account any discount that may be associated
with certain restrictions on these shares, collectively have a market
value of approximately $89,998,432 based on Star Maritime’s share price of
$9.97 as of March 9, 2007. Except for up to 200,000 shares that may
be
required to be surrendered by such individuals for cancellation upon
the
exercise of redemption rights by the holders of Star Maritime's commmon
stock, none of the 9,026,924 shares issued prior to the Initial Public
Offering to these individuals may be released from escrow until
December 21, 2008 during which time the value of the shares may increase
or decrease; however, since such shares were acquired for $.003 per
share,
the holders are likely to benefit from the Redomiciliation
Merger notwithstanding any decrease in the market price of the
shares. Further, if the Redomiciliation Merger is not approved and
Star
Maritime fails to consummate an alternative transaction within the
requisite period and the Company is therefore required to liquidate,
such
shares do not carry the right to receive any distributions upon
liquidation.
|
| · |
Messrs.
Tsirigakis and Syllantavos, our senior executive officers and Messrs.
Pappas and Erhadt, two of our directors, purchased an aggregate of
1,132,500 Star Maritime units at a purchase price of $10.00 per unit.
Star Maritime’s officers and directors agreed to vote such common shares
included in the units in favor of the Redomiciliation Merger and
thereby
waive redemption rights with respect to such shares. If the
Redomiciliation Merger is not approved and Star Maritime fails to
consummate an alternative transaction within the requisite period
and Star
Maritime is therefore required to liquidate, such shares do not carry
the
right to receive distributions upon
liquidation.
|
| · |
After
the completion of the Redomiciliation Merger, Mr. Tsirigakis will
serve as
Star Bulk’s Chief Executive Officer and President and Mr. Syllantavos will
serve as Star Bulk’s Chief Financial Officer. Star Bulk’s board of
directors will be comprised of seven directors. Each of the five
current directors of Star Maritime will serve as directors of Star
Bulk. In addition Mr. Su and Mr. Espig, each a nominee of TMT, will
serve
as directors. Mr. Pappas and Mr. Su will each serve as non-executive
Co-chairman. Such individuals will, following the Redomiciliation
Merger,
be compensated in such manner, and in such amounts, as Star Bulk’s board
of directors may determine to be appropriate. See “Information Concerning
Star Bulk—Compensation
of Directors and Senior
Management.”
|
| · |
Star
Bulk has entered into time charters for two vessels in the
initial fleet with TMT. Effective as of the Redomiciliation Merger,
Mr. Nobu Su and Mr. Espig of TMT will serve on Star Bulk's board
of
directors.
|
|
Employment
|
||||||||||||||||
|
Vessel
|
Type
|
Dwt
|
Year
Built
|
Type/Term
|
Daily
Time
Charter
Hire Rate
|
|||||||||||