Star Bulk Carriers Corp. Announces Changes to Dividend Policy and Share Repurchase Program
Star Bulk Carriers Corp. has recently made significant changes to its dividend policy and share repurchase program. The company’s Board of Directors has approved a new dividend policy for 2021, allowing up to 60% of cash flow from operations to be allocated towards quarterly shareholder dividends, with the remaining cash flow being strategically allocated between share repurchases and growth opportunities. Additionally, the Board has replaced the existing $50.0 million share repurchase program with a new $100.0 million program. Under this new program, the company has already repurchased 293,474 shares at an average price of $15.5, which will be withdrawn and cancelled, leaving 117,730,112 shares outstanding.
Positive
New $100.0 million share repurchase program doubles previous $50.0 million allocation
Initial share buyback executed at $15.5 per share indicates commitment to program
Flexible dividend policy allowing up to 60% of cash flow distribution to shareholders
Strategic focus on buybacks when shares trade below vessel asset values
Negative
Potential reduction in dividend payments compared to previous policy
Decreased cash availability for operational needs due to buyback program
Insights
This significant policy change reflects a strategic shift in capital allocation for Star Bulk Carriers Corp. The company’s new dividend framework offers more flexibility for share buybacks and growth opportunities, with a focus on maximizing shareholder value. By prioritizing buybacks when shares are undervalued, the company aims to capitalize on market inefficiencies and enhance long-term value for its shareholders. The strategic flexibility provided by the new policy, combined with a balanced approach between dividends and buybacks, positions Star Bulk well for future growth and market fluctuations.
FAQ
1. What is Star Bulk’s (SBLK) new share repurchase program amount?
Star Bulk’s new share repurchase program is authorized for up to $100.0 million, replacing the previous $50.0 million program.
2. How many shares has SBLK already repurchased under the new program?
SBLK has repurchased 293,474 shares at an average price of $15.5 under the new program.
3. What percentage of cash flow can SBLK allocate to dividends under the new policy?
Under the amended policy, SBLK can allocate up to 60% of cash flow from operations (less certain deductions) towards quarterly shareholder dividends.
4. How many SBLK shares will be outstanding after the recent buyback cancellation?
After cancelling the repurchased shares, SBLK will have 117,730,112 shares outstanding.
5. When did SBLK announce its new dividend policy and buyback program?
SBLK announced these changes on December 16, 2024, with the board having authorized the new program on December 13, 2024.
Source : www.stocktitan.net