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SAFEBULKERS
F32
ANNUAL REPORT 2023
ANNUAL REPORT 2023
F33
01
Safe Bulkers, Inc. is a global shipping company providing worldwide seaborne transportation trade in the dry bulk sector. We are
listed in the New York Stock Exchange and our shares trade under the symbol ‘’SB’’, “SB.PR.C” and “SB.PR.D”. We have offices in
Monaco, Greece, Cyprus and Switzerland.
Our vessels transport major bulks, which include grain, iron ore, and coal and minor bulks, which include bauxite, fertilizers and
steel products. We cooperate with key market players, shipyards, charterers and financial institutions to advance our business
and create value for our shareholders. Being a successor to a business that first invested in shipping in 1958, we hold true to that
legacy with uninterrupted presence since then, throughout several shipping cycles.
We operate in highly competitive markets that are based primarily on supply and demand. As of February 16, 2024, we had a fleet
of 47 vessels, one of which was held for sale, consisting of 10 Panamax, 11 Kamsarmax, 18 Post-Panamax and 8 Capesize class
vessels, with an aggregate carrying capacity of 4.7 million dwt and an average age of 9.9 years.
We have an extensive orderbook comprised of seven technologically advanced newbuild vessels, complying with the most strin-
gent environmental regulations, two of which methanol dual-fuelled, with scheduled deliveries, one in 2024, two in 2025, three
in 2026 and one in the first quarter of 2027 and an investment program for upgrading the energy efficiency of our existing fleet.
During the last three years, we sold or contracted to sell twelve vessels of $197 million sale proceeds, 0.9 million dwt tonnes and
14.6 years average age and acquired seven second-hand vessels of $187 million acquisition cost, 1.0 million dwt and 9.2 years
average age. In parallel, we completed environmental upgrades on 21 vessels and we are continuing our vessel environmental
upgrade program which involves application of low friction paints and installation of energy saving devices.
Through our newbuild program, selective acquisitions of younger second-hand vessels, selective sales of older vessels and envi-
ronmental upgrades of existing vessels, we target to gradually renew our fleet and reduce our environmental impact.
We intend to employ our vessels on both period time charters and spot time charters, according to our assessment of market con-
ditions, with some of the world’s largest consumers of marine drybulk transportation services. The vessels we deploy on period
time charters provide us with relatively stable cash flow and high utilization rates, while the vessels we deploy in the spot market
allow us to maintain our flexibility in all charter market conditions.
With the developing environmental regulations worldwide, we adapt our fleet towards decarbonisation regulatory initiatives aim-
ing to compete on the basis not only of our operational excellence but also on environmental performance achieving lower carbon
footprint. We have brought Environment, Social and Governance (“ESG”) to the very heart of our corporate strategy establishing
an ESG committee on the Board of Directors’ level, aiming to improve our environmental based competitiveness, our corporate
governance practises and the Company’s social acceptance, continuing to enjoy investors’ trust and enabling us to reinforce our
access to capital.
We aim to maintain a comfortable leveraged balance sheet with strong liquidity, directing our free cash flows partially to our in-
vestment program and to reward our shareholders.
In February 2024, we declared a cash dividend of $0.05 per share of common stock which will be paid on March 19, 2024 to
shareholders of record on March 1, 2024. Our future liquidity needs will impact our dividend policy. The declaration and payment
of dividends, if any, will always be subject to the discretion of the Board of Directors of the Company. There is no guarantee that
the Company’s Board of Directors will determine to issue cash dividends in the future. The timing and amount of any dividends
declared will depend on, among other things: (i) the Company’s earnings, fleet employment profile, financial condition and cash
requirements and available sources of liquidity; (ii) decisions in relation to the Company’s growth, fleet renewal and leverage
strategies; (iii) provisions of Marshall Islands and Liberian law governing the payment of dividends; (iv) restrictive covenants in the
Company’s existing and future debt instruments; and (v) global economic and financial conditions. In addition, cash dividends on
our Common Stock are subject to the priority of dividends on our Preferred Shares.
MV AMMOXOSTOS
EEDI-PHASE 3 – IMO NOx TIER III
KAMSARMAX DELIVERED JANUARY 2024
Company profile
20
SAFEBULKERS
02
ANNUAL REPORT 2023
03
Fellow Shareholders,
Year 2023 ended with an improved charter market sentiment, taking the focus away
from the wars in Ukraine and the Middle East and the inflationary pressures prevailing
during most part of the previous year. Expectations for interest rate cuts support
this positive sentiment, while geopolitical considerations, the upcoming elections in
USA and the GDP growth worldwide, maintain the volatility.
Our revenues in 2023 reached $295 million, achieving an EPS of $0.61, with
liquidity and capital resources exceeding $275 million, providing us with the financial
flexibility we require.
We maintained a meaningful dividend policy of five cents per quarter over the year,
retaining a portion of our free cash flows for our investments which are designed to
improve our competitiveness in the evolving environment of emissions regulations.
We aim to create a young fleet in the forefront of technology, having ordered the
recent years 16 advanced energy efficiency newbuilds, sold 12 older less efficient
vessels and acquired seven younger second-hand vessels. We are developing a roadmap
towards decarbonization with two of the newbuilds on order having dual-fuel engines
that can consume not only fossil fuels but also green methanol when it is available.
As a result of our fleet renewal program, the average age of our vessels remains
stable at about ten years, while through additional investments our existing fleet is
environmentally upgraded to achieve lower fuel consumption and reduced carbon
footprint.
We believe that our fleet’s operational efficiency and environmental performance the
following years will create additional value to our shareholders.
We have integrated ESG at the heart of our corporate strategy and established an
ESG Committee comprised of a majority of independent Directors, supporting our
overall ESG strategic direction.
During 2024, we will continue to focus on our fleet renewal having comfortable
leverage, substantial liquidity and hands on operational efficiency, which we expect
will allow us to take advantage of opportunities when they appear, targeting to
create wealth for our shareholders.
With these words, I present you with our 2023 Annual Report, which provides
detailed information about our business and financial performance.
Polys V. Hajioannou
Chief Executive Officer
and Chairman of the Board
Polys Hajioannou is our Chief
Executive Officer and has been
Chairman of our board of directors
since 2008.
Chairman’s letter
SAFEBULKERS
1.
1.
MV AMMOXOSTOS AND MV KERYNIA
EEDI-PHASE 3 - IMO NOx TIER III
JAPANESE KAMSARMAX DELIVERED JANUARY 2024
2.
2.
MV RIZOKARPASO
EEDI-PHASE 3 – IMO NOx TIER III
JAPANESE KAMSARMAX DELIVERED NOVEMBER 2023
3.
MV MORPHOU
EEDI-PHASE 3 – IMO NOx TIER III
JAPANSESE KAMSARMAX DELIVERED OCTOBER 2023
4.
MV CLIMATE JUSTICE
EEDI-PHASE 3 – IMO NOx TIER III
JAPANSESE POST-PANAMAX DELIVERED JUNE 2023
5.
NAMING CEREMONY OF THE MV PEDHOULAS TRADER
EEDI-PHASE 3 – IMO NOx TIER III
JAPANSESE KAMSARMAX DELIVERED SEPTEMBER 2023
4.
3.
5.
04
ANNUAL REPORT 2023
05
(*) Definitions
Time charter equivalent rate, or TCE rate, represents
charter revenues less commissions and voyage
expenses divided by the number of available days.
EBITDA represents Net income plus net interest
expense, tax, depreciation and amortization. Adjust-
ed EBITDA represents EBITDA before gain/(loss)
on derivatives, early redelivery income/(cost), other
operating expenses, gain/(loss) on sale of assets and
gain/(loss) on foreign currency.
Earnings/(loss) per share (‘‘EPS’’) and Adjusted
Earnings/(loss) per share (‘‘Adjusted EPS’’) represent
Net income/(loss) and Adjusted Net income/(loss) less
preferred dividend and mezzanine equity measurement
divided by the weighted average number of shares
respectively.
EBITDA, Adjusted EBITDA, Adjusted Net Income/
(loss), Adjusted Net income/(loss) available to common
shareholders, Earnings/(loss) per share and Adjusted
Earnings/(loss) per share are not recognized mea-
surements under US GAAP.
Operational
highlights
Financial
highlights(*)
SAFEBULKERS
06
ANNUAL REPORT 2023
07
Vessel Name
Dwt
Year Built*
Country of Construction
CURRENT FLEET
Panamax
Maritsa
Paraskevi 2
Zoe
Koulitsa 2
Kypros Land
Kypros Sea
Kypros Bravery
Kypros Sky
Kypros Loyalty
Kypros Spirit
Kamsarmax
Pedhoulas Merchant
Pedhoulas Leader
Pedhoulas Commander
Pedhoulas Rose
Pedhoulas Cedrus
Vassos
Pedhoulas Trader
Morphou
Rizokarpaso
Ammoxostos
Kerynia
Post-Panamax
Marina
Xenia
Sophia
Eleni
Martine
Andreas K
Panayiota K
Agios Spyridonas
76,000
75,000
75,000
78,100
77,100
77,100
78,000
77,100
78,000
78,000
82,300
82,300
83,700
82,000
81,800
82,000
82,000
82,000
82,000
82,000
82,000
87,000
87,000
87,000
87,000
87,000
92,000
92,000
92,000
2005
2011
2013
2013
2014
2014
2015
2015
2015
2016
2006
2007
2008
2017
2018
2022
2023
2023
2023
2024
2024
2006
2006
2007
2008
2009
2009
2010
2010
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
China
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
South Korea
South Korea
South Korea
Vessel Name
Venus Heritage
Venus History
Venus Horizon
Venus Harmony
Troodos Sun
Troodos Air
Troodos Oak
Climate Respect
Climate Ethics
Climate Justice
Capesize
Mount Troodos
Kanaris
Pelopidas
Aghia Sofia
Michalis H
Stelios Y
Maria
Lake Despina
TOTAL
Kamsarmax
TBN**
TBN**
TBN**
TBN**
TBN**
TBN**
TBN**
TOTAL
Dwt
95,800
95,800
95,800
95,700
85,000
85,000
85,000
87,000
87,000
87,000
181,400
178,100
176,000
176,000
180,400
181,400
181,300
181,400
4,719,600
NEW BUILDS
82,500
82,500
82,000
81,800
81,800
81,200
81,200
573,000
Year Built*
Country of Construction
2010
2011
2012
2013
2016
2016
2020
2022
2023
2023
2009
2010
2011
2012
2012
2012
2014
2014
Q3 2024
Q1 2025
Q2 2025
Q2 2026
Q3 2026
Q4 2026
Q1 2027
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
China
China
China
China
Japan
Japan
Japan
China
China
Japan
Japan
Japan
China
China
* For existing vessels, the year represents the year built. For newbuilds, the dates shown reflect the expected delivery dates.
** To be Named.
Fleet profile
20
SAFEBULKERS
08
ANNUAL REPORT 2023
09
United states
Securities and exchange
commission
Washington, D.C. 20549
Form 20-F
Registration statement pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934
Safe Bulkers, Inc.
(Exact name of Registrant as specified in its charter)
Not Applicable
(Translation of Registrant’s name into English)
Republic of the Marshall Islands
(Jurisdiction of incorporation or organization)
Safe Bulkers, Inc.
Apt. D11
Les Acanthes
6, Avenue des Citronniers
MC98000 Monaco
(Address of principal executive office)
Dr. Loukas Barmparis
President
Telephone: +30 2 111 888 400
Telephone: +357 25 887 200
Facsimile: +30 2 111 878 500
(Name, Address, Telephone Number and Facsimile Number of Company contact person)
Securities registered or to be registered pursuant
to Section 12(b) of the Act:
Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended
December 31, 2023
Title of Each Class
(Mark One)
(cid:133)
(cid:54)
(cid:133)
(cid:133)
Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Shell Company Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Commission File Number 001-34077
Common Stock, $0.001 par value per share
Preferred stock purchase rights
8.00% Series C Cumulative Redeemable Perpetual Preferred
Shares, par value $0.01 per share, liquidation preference
$25.00 per share
8.00% Series D Cumulative Redeemable Perpetual Preferred
Shares, par value $0.01 per share, liquidation preference
$25.00 per share
Trading
Symbol(s)
SB
N/A
Name of Each Exchange
on Which Registered
New York Stock Exchange
New York Stock Exchange
SB.PR.C
New York Stock Exchange
SB.PR.D
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report. As
of December 31, 2023, there were 111,607,828 shares of the registrant’s common stock, 804,950 shares of 8.00% Series C Cumulative Redeemable Per-
petual Preferred Shares, $0.01 par value per share, liquidation preference $25.00 per share, and 3,195,050 shares of 8.00% Series D Cumulative Redeemable
Perpetual Preferred Shares, $0.01 par value per share, liquidation preference $25.00 per share, outstanding.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes (cid:133) No (cid:54)
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934. Yes (cid:133) No (cid:54)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes (cid:54) No (cid:133)
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405
of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files). Yes (cid:54) No (cid:133)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an “emerging growth company” in Rule 12b-
2 of the Exchange Act. (Check one): Large accelerated filer (cid:133) Accelerated filer (cid:54) Non-accelerated filer (cid:133) Emerging growth company (cid:133)
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use
the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. (cid:133)
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards
Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit
report. (cid:54)
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. (cid:133)
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any
of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). (cid:133)
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing. U.S. GAAP (cid:54) International Finan-
cial Reporting Standards as issued by the International Accounting Standards Board (cid:133) Other (cid:133)
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item
17 (cid:133) Item 18 (cid:133)
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes (cid:133) No (cid:54)
SAFEBULKERS
Table of contents
ITEM 1.
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
ITEM 2.
OFFER STATISTICS AND EXPECTED TIMETABLE
ITEM 3.
KEY INFORMATION
ITEM 4.
INFORMATION ON THE COMPANY
ITEM 4A.
UNRESOLVED STAFF COMMENTS
ITEM 5.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
ITEM 6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
ITEM 7.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
ITEM 8.
FINANCIAL INFORMATION
ITEM 9.
THE OFFER AND LISTING
ITEM 10.
ADDITIONAL INFORMATION
ITEM 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
ITEM 13.
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
ITEM 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
ITEM 15.
CONTROLS AND PROCEDURES
ITEM 16.
[RESERVED]
ITEM 16A.
AUDIT COMMITTEE FINANCIAL EXPERT
ITEM 16B.
CODE OF ETHICS
ITEM 16C.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
ITEM 16D.
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
ITEM 16E.
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
ITEM 16F.
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
ITEM 16G.
CORPORATE GOVERNANCE
ITEM 16H.
MINE SAFETY DISCLOSURE
ITEM 16I.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
ITEM 16J.
INSIDER TRADING POLICIES
ITEM 16K.
CYBERSECURITY
ITEM 17.
FINANCIAL STATEMENTS
ITEM 18.
ITEM 19.
FINANCIAL STATEMENTS
EXHIBITS
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ANNUAL REPORT 2023
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ABOUT THIS REPORT
In this annual report, “Safe Bulkers”, “the Company”, “we”, “us” and “our” are sometimes used for convenience where references
are made to Safe Bulkers, Inc. and its subsidiaries (as well as the predecessors of the foregoing). These expressions are also used
where no useful purpose is served by identifying the particular company or companies. Our affiliated management companies,
Safety Management Overseas S.A., a company incorporated under the laws of the Republic of Panama (“Safety Management”),
and Safe Bulkers Management Limited, a company organized and existing under the laws of the Republic of Cyprus (“Safe Bulkers
Management”), are each sometimes referred to as a “Manager”. Safe Bulkers Management Monaco Inc., a company incorporated
under the laws of the Republic of the Marshall Islands (“Safe Bulkers Management Monaco”), is sometimes referred to as the “New
Manager,” and together with Safety Management and Safe Bulkers Management, our “Managers.”
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS
All statements in this annual report that are not statements of either historical fact or current facts are “forward-looking statements”
within the meaning of the United States Private Securities Litigation Reform Act of 1995. We desire to take advantage of the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995 and are issuing this cautionary statement in connection
therewith. The disclosure and analysis set forth in this annual report includes underlying assumptions, expectations, projections,
objectives, goals, intentions and beliefs about future events or performance in a number of places, particularly in relation to our op-
erations, cash flows, financial position, plans, strategies, business prospects, changes and trends in our business and the markets in
which we operate. These statements are intended as forward-looking statements. In some cases, predictive, future-tense or forward-
looking words such as “believe,” “intend,” “anticipate,” “continue,” “possible,” “hope,” “estimate,” “project,” “predict,” “forecast,”
“plan,” “target,” “seek,” “potential,” “may,” “might,” “will,” “likely to,” “view,”“would,” “could,” “should” and “expect” and other
similar expressions are intended to identify forward-looking statements, which are statements other than statements of historical
facts, but are not the exclusive means of identifying such statements. In addition, we and our representatives may from time to time
make other oral or written statements which are forward-looking statements, including in our periodic reports that we file with the
Securities and Exchange Commission (“SEC”), other information sent to our security holders, and other written materials.
All forward-looking statements involve risks and uncertainties and readers should not place undue reliance on them. The occur-
rence of the events described, and the achievement of the expected results, depend on many events, some or all of which are not
predictable or within our control. Actual results may differ materially from expected results.
Forward-looking statements include, but are not limited to, such matters as:
~ future operating or financial results and future revenues and expenses;
~ our ability to maintain or develop new and existing customer relationships with major commodity traders, including our
ability to enter into long-term charters for our vessels, and those we may acquire in the future;
~ future, pending or recent acquisitions, business strategy, and other plans and objectives for growth and future operations,
areas of possible expansion and expected capital spending or operating expenses;
~ availability of key employees, crew, length and number of off-hire days, classification surveys and drydocking require-
ments, and bunker fuel prices and insurance costs for our fleet;
~ general market conditions and changes, including inflation pressures leading to subpar economic growth, and the disrup-
tion of shipping routes and seaborne patterns in the shipping industry trends, including charter rates, vessel values and
factors affecting supply and demand for dry bulk commodities;
~ competition within our industry;
~ reputational risks;
~ our financial condition and liquidity, including our ability to make required payments under our credit facilities, comply with
our loan covenants and obtain additional financing in the future to fund capital expenditures, acquisitions and other general
corporate activities and to comply with the restrictive and other covenants in our financing arrangements;
~ the strength of world economies and currencies and the fluctuations in interest rates and foreign exchange rates;
~ potential exposure or loss from investment in derivative instruments;
~ general domestic, regional and international economic and political conditions;
~ the effect of the 2019 Novel Coronavirus (the “Covid-19”) on our business and operations and any related remediation
measures on our performance and business prospects;
~ the extent to which any new wave or new variant of Covid-19 will impact the Company’s results of operations and financial
condition;
~ potential disruption of shipping routes due to natural disasters, accidents, political events or other developments outside
of our control, including the war between Russia and Ukraine, and unrest in the Middle East, and the extent to which such
events could have any impact on the Company’s results of operations and financial condition;
~ sanctions imposed as a result of war (including the war between Russia and Ukraine and unrest in the Middle East,), and
the potential impact on our common shares and reputation if our vessels were to call on ports located in countries that are
subject to restrictions imposed by the U.S. and other governments;
~ world events, including terrorist attacks and other international hostilities, including the war between Russia and Ukraine
the war between Israel and Hamas and the trade disruption in the Red Sea region;
~ the overall health and condition of the U.S. and global financial markets, including the value of the U.S. dollar relative to
other currencies;
SAFEBULKERS
12
ANNUAL REPORT 2023
13
~ our expectations about availability of vessels to purchase, the time that it may take to construct and deliver new vessels
or the useful lives of our vessels;
~ the number of available slots in shipyards for newbuilding orders for the dry bulk sector;
~ our ability to successfully acquire, dispose and implement a gradual fleet renewal with modern, energy efficient vessels;
~ our continued ability to enter into period time charters with our customers and secure profitable employment for our ves-
sels in the spot market;
~ vessel breakdowns and instances of off-hire;
~ our future capital expenditures (including our ability to successfully complete current and future newbuilding programs,
the remaining installation of sulfur oxide exhaust gas cleaning systems (“Scrubbers”) and investments for the upgrading
of our existing vessels (including the amount and nature thereof, the timing of completion thereof, the delivery and com-
mencement of operations dates, the expected downtime delays, cost overruns and lost revenue);
~ our ability to continue realizing the benefits from Scrubbers;
~ availability of financing and refinancing, our level of indebtedness and our need for cash to meet our debt service obligations;
~ our expectations relating to dividend payments and ability to make such payments;
~ the future price of our common shares;
~ our ability to leverage our Managers’ relationships and reputation within the drybulk shipping industry to our advantage;
~ our anticipated general and administrative expenses;
~ potential conflicts of interest involving our Chief Executive Officer, his family and other members of our senior management
and board of directors;
~ environmental and regulatory conditions, including changes in laws, governmental rules and regulations or actions taken
by regulatory authorities;
~ our ability to manage and mitigate any reduction in the demand for coal, one of the primary cargoes carried by our vessels;
~ our ability to implement and maintain adequate environmental and social responsibility policies and programs in response
to increasing scrutiny and expectations from investors, lenders, charterers with respect to our Environmental, Social and
Governance (“ESG”) practices;
~ risks inherent in vessel operation, including terrorism (including cyber terrorism), piracy, corruption, militant activities,
political instability, terrorism and ethnic unrest in locations where we may operate and discharge of pollutants;
~ potential liability from pending or future litigation and potential costs due to environmental damage and vessel collisions; and
~ other factors discussed in “Item 3. Key Information—D. Risk Factors” of this annual report.
See the sections entitled “Risk Factors” of this Annual Report on Form 20-F for the year ended December 31, 2023.
We caution that the forward-looking statements included in this annual report represent our estimates, analyses formed by ap-
plying our experience and perception of historical trends, current conditions, expected future developments and other factors
we believe are appropriate in the circumstances and assumptions only as of the date of this annual report and are not intended
to give any assurance as to future results. All future written and verbal forward-looking statements attributable to us or any
person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this
section. Assumptions, expectations, projections, intentions and beliefs about future events may, and often do, vary from actual
results and these differences can be material. Any of these factors or a combination of these factors could materially affect our
future results of operations and the ultimate accuracy of the forward-looking statements. The reasons for this include the risks,
uncertainties and factors described under “Item 3. Key Information—D. Risk Factors.” which we urge you to read for a more
complete discussion of these risks and uncertainties and for other risks and uncertainties. As a result and in light of these risks,
uncertainties and assumptions, the forward-looking events discussed in this annual report might not occur and our actual results
may differ materially from those anticipated in the forward-looking statements. Accordingly, you should not unduly rely on any
forward-looking statements.
We undertake no obligation, and specifically decline any obligation, to publicly update or revise any forward-looking statements,
contained in this annual report, except as required by law, whether as a result of new information, future events or otherwise, a
change in our views or expectations or otherwise. These factors and the other risk factors described in this annual report are not
necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed
in any of our forward-looking statements. Other unknown or unpredictable factors could also cause such discrepancies. New fac-
tors emerge from time to time, and it is not possible for us to predict all of these factors. Further, we cannot assess the impact
of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be
materially different from those contained in any forward-looking statement. Consequently, there can be no assurance that actual
results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected con-
sequences to, or effects on, us. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such
forward-looking statements.
Unless otherwise indicated, all references to “U.S. dollars”,“Dollars”, “U.S. $”and “$” in this report are to U.S. Dollars, the lawful
currency of the United States of America (the “U.S.”) and all references to “Euro” and “€” in this report are to Euros, the official
currency of certain member states of the European Union (the “E.U.”). The consolidated financial statements and notes of Safe
Bulkers, Inc., have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The historical
results included elsewhere in this document are not necessarily indicative of our future performance.
PART I
ITEM 1.
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT
AND ADVISERS
OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 2.
Not applicable.
ITEM 3.
KEY INFORMATION
Safe Bulkers, Inc. was formed on December 11, 2007 under the laws of the Republic of the Marshall Islands. Safe Bulkers’ common
stock trades on the New York Stock Exchange (“NYSE”) under the symbol “SB”. The Company’s series C preferred stock and series
D preferred stock are listed on the NYSE, and trade under the symbols “SB.PR.C” and “SB.PR.D”, respectively. We are a global ship-
ping company providing worldwide seaborne transportation solutions in the dry bulk sector. Our vessels transport major bulks, which
include iron ore, coal and grain and minor bulks, which include bauxite, fertilizers and steel products. We or our Managers have offices
in Monaco, Greece, Cyprus and Switzerland. Our fleet consists of dry bulk vessels of four sizes, namely Capesize vessels with carrying
capacity of about 180,000 dwt; Post Panamax vessels with carrying capacities of between 85,000 dwt and 100,000 dwt; Kamsarmax
vessels with carrying capacities of between 80,000 dwt and 84,000 dwt; and Panamax vessels with carrying capacities of between
75,000 and 78,000 dwt. As of February 16, 2024, we have a fleet of 47 vessels, one of which is held for sale, with an average age of
9.9 years and aggregate capacity of 4.7 million deadweight tons (“dwt”) expressed in metric tons, each of which is equivalent to 1,000
kilograms, referring to the maximum weight of cargo and supplies that a vessel can carry. Eleven vessels in our fleet are eco-ships built
after 2014, and nine are designed to meet the Phase 3 requirements of Energy Efficiency Design Index (“EEDI”) related to the reduction
of green house gas (“GHG”) emissions, (‘’GHG -EEDI Phase 3’’) as adopted by the International Maritime Organization, (“IMO”) and also
comply with the latest nitrogen oxides (“NOx”) Tier III emissions regulation of International Convention for the Prevention of Pollution
from Ships (“MARPOL”), NOx-Tier III (IMO, MARPOL Annex VI, reg. 13) (‘’NOx-Tier III’’) and were built 2022 onwards. In addition, we
have entered into agreements for the acquisition of seven IMO GHG Phase 3 - NOx Tier III Kamsarmax class dry-bulk newbuilds, two of
which are methanol dual-fueled. The methanol dual-fueled vessels are capable of operating with methanol and heavy fuel oil or marine
gas oil. When powered by green methanol they can produce close to zero GHG emissions based on the life cycle assessment (‘’LCA’’)
methodology well-to-propeller (‘’WTP’’). One newbuild on the Company’s orderbook is scheduled to be delivered in 2024, followed by
two newbuilds scheduled to be delivered in 2025, three in 2026 and one newbuild scheduled to be delivered in 2027.
(A) Reserved
(B) Capitalization and Indebtedness
Not applicable.
(C) Reasons for the Offer and Use of Proceeds
Not applicable.
(D) Risk Factors
SOME OF THE FOLLOWING RISKS RELATE PRINCIPALLY TO THE INDUSTRY IN WHICH WE OPERATE AND OUR BUSINESS IN GEN-
ERAL. OTHER RISKS RELATE PRINCIPALLY TO THE SECURITIES MARKET AND OWNERSHIP OF OUR COMMON STOCK, $0.001 PAR
VALUE PER SHARE (“COMMON STOCK”), SERIES C CUMULATIVE REDEEMABLE PERPETUAL PREFERRED SHARES, PAR VALUE
$0.01 PER SHARE, LIQUIDATION PREFERENCE $25.00 PER SHARE (“SERIES C PREFERRED SHARES”) AND SERIES D CUMULA-
TIVE REDEEMABLE PERPETUAL PREFERRED SHARES, PAR VALUE $0.01 PER SHARE, LIQUIDATION PREFERENCE $25.00 PER
SHARE (“SERIES D PREFERRED SHARES,” AND TOGETHER WITH THE SERIES C PREFERRED SHARES, THE “PREFERRED SHARES”),
INCLUDING THE TAX CONSEQUENCES OF OWNERSHIP OF OUR COMMON STOCK AND PREFERRED SHARES. THE OCCURRENCE OF
ANY OF THE RISKS OR EVENTS DESCRIBED IN THIS SECTION COULD SIGNIFICANTLY AND NEGATIVELY AFFECT OUR BUSINESS,
FINANCIAL CONDITION OR OPERATING RESULTS OR THE TRADING PRICE OF OUR COMMON STOCK OR PREFERRED SHARES.
Risk Factor Summary
Investing in our securities involves a high degree of risk. Below is a summary of material factors that make an investment in our
securities speculative or risky. Importantly, this summary does not address all of the risks that we face. Additional discussion of
the risks summarized in this risk factor summary, as well as other risks that we face, can be found after this summary.
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ANNUAL REPORT 2023
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Risks Inherent in Our Industry and Our Business
~ Cyclicality and volatility may lead to reductions in the charter rates we are able to obtain, in vessel values and in our
earnings, results of operations and available cash flow.
~ A negative change in global economic or regulatory conditions could reduce charter rates.
~ An oversupply of drybulk vessel capacity may lead to reductions in charter rates and results of operations.
~ The market value of drybulk vessels is highly volatile. A decrease of the market values of our vessels could cause us to
incur an impairment loss and have an adverse effect on our results of operations.
~ Drybulk industry is competitive, and we may not be able to compete successfully for charters with new entrants or estab-
lished companies with greater resources.
~ We are subject to complex regulations and liability, including anti-bribery, labor, environmental, international safety and
anti-corruption laws that may require significant expenditures.
~ Our vessels fitted with Scrubbers may face difficulties from the price differential between compliant fuels with 0.5% sulfur
content (‘’VLSFO’’) and heavy fuel oil with sulfur content of 3.5% (‘’HSFO’’) and the regulatory restrictions and shortage in
availability of HSFO, while our non–scrubber fitted vessels may face difficulties in competing with Scrubber-fitted vessels
and incur additional repairs and maintenance costs, affecting our results of operations.
~ Environmental regulations in relation to climate change and GHG emissions may increase operational and financial restric-
tions and environmental compliance costs and lead to environmental taxation schemes affecting more, less energy efficient
vessels, reducing their trade and competitiveness and make certain vessels in our fleet obsolete, which may result in finan-
cial impacts on our results of operations.
~ Increasing scrutiny and changing expectations from investors, lenders with respect to our ESG policies may impose
additional costs or expose us to additional risks.
~ Increased inspection procedures and tighter import and export controls could increase costs and disrupt our business.
~ Our vessels are exposed to operational risks that may not be adequately covered by our insurance.
~ World events, including terrorist attacks, other international hostilities and potential disruption of shipping routes due to
events outside of our control, including the war between Russia and Ukraine, the war between Israel and Hamas and Red
Sea trade disruption, could negatively affect our results of operations and financial condition.
~ The outbreaks of epidemic and pandemic diseases, including the Covid-19 and the resulting disruptions to the Company
and the international shipping industry could negatively affect our business, results of operations or financial condition.
~ Acts of piracy and the potential disruption of shipping routes due to events outside of our control, including terrorist
attacks and hostilities, could negatively affect our results of operations and financial condition.
~ We rely on information technology, and if we are unable to protect against service interruptions, data corruption, cyber
based attacks or network security breaches, our operations could be disrupted and our business negatively affected.
~ Certain operational and technical risks of drybulk vessels could lead to an environmental disaster, affecting our business.
~ Political uncertainty and an increase in trade protectionism could have a negative impact on our charterers’ business.
~ Charterers may renegotiate or default on period time charters, which could reduce our revenues.
~ The loss of one or more of our customers could have a material adverse effect on our business.
~ We may have difficulty properly managing our planned growth through acquisitions of additional vessels.
~ Failure to improve our operations and financial systems or recruit suitable employees as we expand our business, may
affect our performance.
~ Unless we set aside reserves for vessel replacement, at the end of a vessel’s useful life, our revenue will decline, which
would adversely affect our cash flows and income.
~ The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.
~ If we are unable to obtain additional financing on favorable terms, we may be unable to refinance our existing indebtedness
and may not be able to finance a fleet replacement and expansion program in the future.
~ Conversion of our London Interbank Offered Rate (“LIBOR”) based borrowings to alternative reference rates, such as the Se-
cured Overnight Financing Rate (“SOFR”), could result in higher interest costs, and may adversely impact our indebtedness.
~ Inflation pressures and the changes in central bank rates could lead to contraction for world economies and adversely affect
dry-bulk world trade and freight markets, the cost of our capital, and may adversely impact our revenues and our indebtedness.
~ We are and will be exposed to floating interest rates and may selectively enter into interest rate derivative contracts, which
can result in higher than market interest rates and charges against our income.
~ Because we generate substantially all of our revenues in U.S. dollars but incur a material portion of our expenses in other
currencies, exchange rate fluctuations could have a material adverse effect on our results of operations.
~ Restrictive covenants and cross-default provisions in our existing and future financing agreements impose financial and
other restrictions on us, and any breach of these covenants could result in the acceleration of our indebtedness and fore-
closure on our vessels.
~ The declaration and payment of dividends will always be subject to the discretion of our board of directors and our board of
directors may not declare dividends in the future.
~ We are a holding company and we depend on the ability of our subsidiaries to distribute funds to us in order to make divi-
dend payments.
~ We depend on our Managers to operate our business and our business could be harmed if our Managers fail to perform
their services satisfactorily.
~ Our chief executive officer also controls our Managers, which could create conflicts of interest between us and our Managers.
~ Agreements between us and other affiliated entities may be challenged as less favorable than agreements that we could
obtain from unaffiliated third parties.
~ The provisions in our restrictive covenant arrangements with our chief executive officer and certain entities affiliated with
him restricting their ability to compete with us may not be enforceable.
~ We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate law.
Risks Relating to Our Common Stock and Preferred Shares
~ Our chief executive officer Polys Hajioannou is the Company’s largest shareholder and his interests may be different from yours.
~ Our status as a foreign private issuer within the rules promulgated under the Exchange Act exempts us from certain require-
ments of the SEC and NYSE.
~ The market price of our Common Stock may be adversely affected by sales of substantial amounts of our Common Stock pursu-
ant to a market equity offering program if our board of directors adopted such a program.
Risks Inherent in Our Industry and Our Business
The international drybulk shipping industry is cyclical and volatile, having reached historical highs in 2008 and historical
lows in 2016. Charter rates remained at elevated levels during 2022, decreased during 2023 and have remained volatile
more recently during 2024. Cyclicality and volatility may lead to reductions in the charter rates we are able to obtain, in
vessel values and in our earnings, results of operations and available cash flow.
The drybulk shipping industry is cyclical with attendant volatility in charter rates, vessel values and profitability. The industry is
cyclical in nature due to seasonal fluctuations, market adjustments in supply of and demand for drybulk vessels and trade dis-
ruptions. We expect this cyclicality and volatility in market rates to continue in the foreseeable future. Accordingly, there can be
no assurance that the drybulk charter market will reach in the near future the levels previously experienced. The market could
experience a downturn in case of a new wave of Covid-19, or as a result of the war between Russia and Ukraine, the war between
Israel and Hamas and the Red Sea trade disruption, or for other reasons. For example, in 2008, the Baltic Dry Index (the “BDI”),
had reached an all-time high of 11,793, while in 2016, BDI had reached an all-time low of 290. During 2023 and 2024, BDI
remained volatile, reaching an annual low of 530 on February 16, 2023 and an annual high of 3,346 on December 4, 2023, for
2023, and a low of 1,308 on January 17, 2024 and a high of 2,110 on January 5, 2024, thus far in 2024.
We charter some of our vessels in the spot charter market for periods up to three months and in the period charter market for
longer periods. The spot market is highly competitive and volatile, while period time charter contracts of longer duration provide
income at pre-determined rates over more extended periods of time. We are exposed to changes in spot charter market each
time one of our vessels is completing a previously contracted charter, and we may not be able to secure period time charters at
profitable levels. Furthermore, we may be unable to keep our vessels fully employed. Charter rates available in the market may
be insufficient to enable our vessels to be operated profitably. A significant decrease in charter rates would adversely affect our
profitability, cash flows, asset values and ability to pay dividends.
As of February 16, 2024, 29 of our 47 owned drybulk vessels were deployed or scheduled to be deployed on period time charters
of more than three months remaining term. In addition, we have entered into agreements for the acquisition of seven GHG-EEDI
Phase 3 NOx-Tier III drybulk newbuilds, including two methanol dual fueled, scheduled to be delivered one in 2024, two in 2025,
three in 2026 and one in 2027. None of the newbuilds on order currently have any contracted charter. As more vessels become
available for employment, we may have difficulty entering into multi-year, fixed-rate time charters for our vessels, and as a result,
our cash flows may be subject to volatility in the long-term. We may be required to enter into variable rate charters or charters
linked to the Baltic Panamax Index or Baltic Capesize Index, as opposed to contracts based on fixed rates, which could result in a
decrease in our cash flows and net income in periods when the market for drybulk shipping is depressed. If low charter rates in the
drybulk market prevail during periods when we must replace our existing charters, it will have an adverse effect on our revenues,
profitability, cash flows and our ability to comply with the financial covenants in our loan and credit facilities.
The factors affecting the supply and demand for drybulk vessels are outside of our control and are difficult to predict with confi-
dence. As a result, the nature, timing, direction and degree of changes in industry conditions are also unpredictable.
Factors that influence demand for drybulk vessel capacity include:
~ demand for and production of drybulk products;
~ supply of and demand for energy resources and commodities;
~ epidemics or pandemics such as Covid-19 and related factors;
~ global and regional economic and political conditions, armed conflicts such as the war between Russia and Ukraine and the
war between Israel and Hamas, natural or other disasters (including weather conditions), terrorist activities and strikes;
~ environmental, climate and other regulatory developments;
~ the location of regional and global exploration, production and manufacturing facilities and the distance drybulk cargoes
are to be moved by sea;
~ changes in seaborne and other transportation patterns including shifts in the location of consuming regions for energy
resources, commodities, and transportation demand for drybulk transportation;
~ sanctions, embargoes, import and export restrictions, nationalizations and wars, including those arising as a result of the
war between Russia and Ukraine and the war between Israel and Hamas;
~ trade disputes or the imposition of tariffs on various commodities or finished goods tariffs on imports and exports that
could affect the international trade; and
~ currency exchange rates.
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ANNUAL REPORT 2023
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Factors that influence the supply of drybulk vessel capacity include:
~ the size of the newbuilding orderbook;
~ availability of financing for new vessels;
~ the number of newbuild deliveries, including slippage in deliveries, which, among other factors, relates to the ability of
shipyards to deliver newbuilds by contracted delivery dates and the ability of purchasers to finance such newbuilds;
~ the scrapping rate of older vessels, depending, amongst other things, on more stringent environmental regulations, scrap-
ping rates and international scrapping regulations;
~ Port lockdowns for any reason, higher crew cost and travel restrictions imposed by governments around the world;
~ port and canal congestion;
~ the speed of vessel operation which may be influenced by several reasons including energy cost and environmental regulations;
~ sanctions;
~ the number of vessels that are in or out of service, delayed in ports for several reasons, laid-up, dry docked awaiting repairs
or otherwise not available for hire, including due to vessel casualties;
~ changes in environmental and other regulations that may limit the useful lives of vessels or effectively cause reductions in
the carrying capacity of vessels or early obsolescence of tonnage; and
~ ability of the Company to maintain ESG practices acceptable to customers, regulators and financing sources.
Factors influencing the supply of and demand for shipping capacity are outside of our control, and we may not be able to correctly
assess the nature, timing and degree of changes in industry conditions. We anticipate that the future demand for our drybulk ves-
sels and, in turn, drybulk charter rates, will be dependent, among other things, upon economic growth in the world’s economies,
any trade restrictions between economies, seasonal and regional changes in demand, changes in the capacity of the global drybulk
vessel fleet and the sources and supply of drybulk cargo to be transported by sea. However, new factors may emerge which we
cannot foresee at this time and thus might not be able to adequately prepare for. A decline in demand for commodities transported
in drybulk vessels or an increase in supply of drybulk vessels could cause a significant decline in charter rates, which could materi-
ally adversely affect our business, financial condition and results of operations. There can be no assurance as to the sustainability
of future economic growth, if any, due to unexpected demand shocks.
A negative change in global economic or regulatory conditions, especially in the Asian region, which includes countries
like China, Japan and India, could reduce drybulk trade and demand, which could reduce charter rates and have a material
adverse effect on our business, financial condition and results of operations.
We expect that a significant number of the port calls made by our vessels will involve the loading or discharging of raw materials
in ports in the Asian region, particularly China, Japan and India. As a result, a negative change in economic or regulatory condi-
tions in any Asian country, particularly China, Japan or India, can have a material adverse effect on our business, financial position
and results of operations, as well as our future prospects, by reducing demand and, as a result, charter rates and affecting our
ability to charter our vessels. If economic growth declines in China, Japan, India and other countries in the Asian region, or if the
regulatory environment in these countries changes adversely for our industry, we may face decreases in such drybulk trade and
demand. Moreover, a slowdown in the United States economy or the economies of countries within the E.U. will likely adversely
affect economic growth in China, Japan, India and other countries in the Asian region. Such an economic downturn in any of these
countries could have a material adverse effect on our business, financial condition and results of operations.
An oversupply of drybulk vessel capacity may lead to reductions in charter rates and results of operations.
The market supply of drybulk vessels has been increasing in terms of dwt, and the number of drybulk vessels on order as of
December 31, 2023 was approximately 8.6% for Panamax to Post-Panamax class vessels and 5.5% for Capesize class vessels,
as compared to the then-existing global drybulk fleet in terms of dwt, with the majority of new deliveries expected during 2024.
As a result, the drybulk fleet continues to grow. In addition, during periods when there are high expectations for charter market
recovery, a large number of orders may be placed in shipyards, resulting in a further increase of newbuild orders and accordingly
in the size of the global drybulk fleet. An oversupply of drybulk vessel capacity will likely result in a reduction of charter hire rates.
We will be exposed to changes in charter rates with respect to our existing fleet and our remaining newbuild, depending on the ul-
timate growth of the global drybulk fleet. If we cannot enter into period time charters on acceptable terms, we may have to secure
charters in the spot market, where charter rates are more volatile and revenues are, therefore, less predictable, or we may not
be able to charter our vessels at all. In our current fleet, as of February 16, 2024, 21 vessels will be available for employment in
the first half of 2024. A material increase in the net supply of drybulk vessel capacity without corresponding growth in drybulk
vessel demand could have a material adverse effect on our fleet utilization and our charter rates generally, and could, accordingly,
materially adversely affect our business, financial condition and results of operations.
The market value of drybulk vessels is highly volatile, being related to charter market conditions, aging and environmen-
tal regulations. The market values of our vessels may significantly decrease which could cause us to breach covenants in
our credit and loan facilities and our bond, and could have a material adverse effect on our business, financial condition
and results of operations.
Our credit and loan facilities, which are secured by mortgages on our vessels, and our bond which is unsecured, require us to comply
with collateral coverage ratios and satisfy certain financial and other covenants, including those that are affected by the market value
of our vessels. The market values of drybulk vessels have generally experienced significant volatility within a short period of time.
In recent years, the market prices for second-hand and newbuild drybulk vessels significantly declined in 2020 due to depressed
market conditions as a result of Covid-19, recovered since then during 2021 and the first months of 2022, decreased during the
last months of 2022 and during 2023 and remained stable during the first month of 2024, as a result of prevailing charter market
conditions. Before that, in the previous years, the market prices for second-hand and newbuild drybulk vessels experienced very low
levels in 2016, when vessel values were reduced in a short period of time due to depressed market conditions, a significant increase
in 2017, followed by a small increase in 2018 and 2019. The market value of our vessels fluctuates depending on a number of
factors, including:
~ general economic and market conditions affecting the shipping industry;
~ changes in interest rates and inflationary pressures;
~ prevailing level of charter rates;
~ supply of and demand for vessels;
~ general vessel’s condition and vessel’s specification;
~ vessel environmental performance (GHG rating, BWTS installation, Scrubbers installation, etc.);
~ distressed asset sales, including newbuild contract sales during weak charter market conditions;
~ lack of financing and limitations imposed by financial covenants affecting the market value of vessels ;
~ competition from other shipping companies and other modes of transportation;
~ configurations, types, sizes and ages of vessels;
~ changes in governmental, environmental or other regulations that may limit the useful life of vessels; and
~ technological advances.
We were in compliance with our covenants in our credit and loan facilities and our bond, in effect as of December 31, 2022 and
December 31, 2023. If the market value of our vessels, or our newbuilds upon delivery to us, decline, we may breach some of the
covenants contained in our credit and loan facilities and our bond. If we do breach such covenants and we are unable to remedy or
our lenders refuse to waive the relevant breach, our lenders could accelerate our indebtedness and foreclose on the vessels in our
fleet securing those loan and credit facilities. As a result of cross-default provisions contained in our loan and credit facility agree-
ments and our bond, this could in turn lead to additional defaults under our financing agreements and the consequent acceleration
of the indebtedness under those agreements and the commencement of similar foreclosure proceedings by other lenders and our
bondholders. If our indebtedness was accelerated in full or in part, it would be difficult for us to refinance our debt or obtain additional
financing on favorable terms or at all and we could lose our vessels if our lenders foreclose their liens, which would adversely affect
our ability to continue our business.
A significant decrease of the market values of our vessels could cause us to incur an impairment loss and could have a mate-
rial adverse effect on our business, financial condition and results of operations.
We review for impairment our vessels on a quarterly basis and whenever events or changes in circumstances indicate that the
carrying amount of the vessels may not be recoverable. Such indicators include declines in the fair market value of vessels,
decreases in market charter rates, vessel sale and purchase considerations, fleet utilization, environmental and other regulatory
changes in the drybulk shipping industry or changes in business plans or overall market conditions that may adversely affect cash
flows. We may be required to record an impairment charge with respect to our vessels and any such impairment charge resulting
from a decline in the market value of our vessels or a decrease in charter rates may have a material adverse effect on our busi-
ness, financial condition and results of operations. Our financial results may be similarly affected in the future if we record an
impairment charge or sell vessels at a loss before we record an impairment adjustment. Conversely, if vessel values are elevated
at a time when we wish to acquire additional vessels, the cost of such acquisitions may increase and this could adversely affect
our business, results of operations, cash flow and financial condition.
See “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Critical Accounting Estimates—Impairment of
Vessels” for more information.
Technological developments could reduce our earnings and the value of our vessels.
Determining factors for the useful life of the vessels in our fleet are efficiency, operational flexibility and technological developments.
Efficiency includes speed, fuel economy, which is also related to GHG emissions, and the ability to load and discharge cargo quickly.
Flexibility includes the ability to enter harbors, utilize related docking facilities and pass through canals and straits. The duration of a
vessel’s useful life is related to its original design and construction, its maintenance and the impact of the stress of operations. If new
vessels are built that are more efficient or more flexible or have longer useful lives than our vessels, competition from these more
technologically advanced vessels could adversely affect the amount of charter hire payments we receive for our vessels, and the
resale value of our vessels could significantly decrease. As a result, our earnings and financial condition could be adversely affected.
The international drybulk shipping industry is highly competitive, and we may not be able to compete successfully for
charters with new entrants or established companies with greater resources.
We employ our vessels in a highly competitive market that is capital intensive and highly fragmented. Competition arises primarily
from other vessel owners, some of whom have substantially greater resources than we do. Competition for the transportation of
drybulk cargo by sea is intense and depends on price, customer relationships, operating expertise, professional reputation and
size, age, location and condition of the vessel. Due in part to the highly fragmented market, additional competitors with greater
resources could enter the drybulk shipping industry and operate larger fleets through consolidations or acquisitions and may be
able to offer lower charter rates than we are able to offer, which could have a material adverse effect on our fleet utilization and,
accordingly, our results of operations.
Changes in labor laws and regulations, collective bargaining negotiations and labor disputes, and potential challenges for
crew availability as a result of increasing difficulty in workforce recruitment in certain markets due to various reasons,
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including the war between Russia and Ukraine and the war between Israel and Hamas, could increase our crew costs and have
a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.
Crew costs are a significant expense for us under our charters. There is a limited supply of well-qualified crew. We bear crewing
costs under our charters. Increases in crew costs may adversely affect our results of operations. In addition, labor disputes or
unrest, including work stoppages, strikes and/or work disruptions or increases imposed by collective bargaining agreements
covering the majority of our officers on board our vessels could result in higher personnel costs and significantly affect our
financial performance. Furthermore, while we do not have any Ukrainian, Russian, Israeli or Palestinian crew, the Company’s
vessels, currently do not sail in the Black Sea or the Red Sea and the Company otherwise conducts limited operations in Rus-
sia, Ukraine and the Middle East, the extent to which this will impact the Company’s future results of operations and financial
condition will depend on future developments, which are highly uncertain and cannot be predicted. Changes in labor laws and
regulations, collective bargaining negotiations and labor disputes, and potential shortage of crew due to the war between
Russia and Ukraine and in the Middle East, could increase our crew costs and have a material adverse effect on our business,
results of operations, cash flows, financial condition and ability to pay dividends.
We are subject to regulations and liability under environmental laws that require significant expenditures, which can
affect the ability and competitiveness of our vessels to trade, our results of operations and financial condition.
Our business and the operation of our vessels are regulated under international conventions, national, state and local laws and
regulations in force in the jurisdictions in which our vessels operate, as well as in the country or countries of their registration,
in relation to potential environmental impacts. Regulations of vessels, particularly environmental regulations have become more
stringent, including regulations related to marine pollution, BWTS implementation, exhaust gas emissions such as NOx, sulfur ox-
ides (“SOx”), particulate matter, etc., as well as GHG emissions such as carbon dioxide (“CO2”), methane, etc. Some of those GHG
emission regulations are expected to be further revised and become stricter in the future and associated with Emissions Trading
Systems (“ETS”). As a result significant capital expenditures may be required on our vessels to keep them in compliance, and we
may be required to pay increased prices for newbuild and secondhand vessels that meet these requirements.
See “Item 4. Information on the company. — B. Business Overview — Regulations: Safety and the Environment” for more
information.
In addition, the heightened environmental, quality and security concerns of the public, regulators, insurance underwriters, financing
sources and charterers may generally lead to additional regulatory requirements, including enhanced risk assessment and security
requirements, greater inspection and safety requirements on all vessels in the marine transportation markets and possibly restric-
tions on the emissions of greenhouse gases from the operation of vessels. These requirements are likely to add incremental costs
to our operations and the failure to comply with these requirements may affect the ability of our vessels to obtain and, possibly,
collect on insurance or to obtain the required certificates for entry into the different ports where we operate. We could also incur
material liabilities, including cleanup obligations and claims for natural resource, personal injury and property damages in the event
that there is a release of petroleum or other hazardous materials from our vessels or otherwise in connection with our operations.
Violations of, or liabilities under, environmental regulations can result in substantial penalties, fines and other sanctions, including,
in certain instances, seizure or detention of our vessels. Any such actual or alleged environmental laws regulations and policies
violation, under negligence, willful misconduct or fault, could result in substantial fines, civil and/or criminal penalties or curtail-
ment of operations in certain jurisdictions, and might adversely affect our business, results of operations or financial condition. In
addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting, investigating
and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management.
Events of this nature would have a material adverse effect on our business, financial condition and results of operations.
Our Scrubber-fitted vessels may face difficulties from the price differential between VLSFO and HSFO, regulatory restric-
tions and shortage in availability of HSFO, while our non–scrubber fitted vessels may face difficulties in competing with
Scrubber-fitted vessels and incur additional repairs and maintenance costs, affecting our results of operations.
A global 0.5% sulfur cap on marine fuels came into force on January 1, 2020, as agreed in amendments adopted in 2008 for
Annex VI to MARPOL reducing the previous sulfur cap of 3.5%. Vessels may use either VLSFO or HSFO only if they are equipped
with Scrubbers. In response to SOx emissions regulations, we have currently installed Scrubbers in 21 of our vessels and we ex-
pect to install one additional Scrubber in 2024.
The viability of Scrubber investments mainly depends on the price differential between VLSFO, which usually are more expensive,
and HSFO. The use of VLSFO between 2020 and 2022 had raised concerns in relation to excess wear of piston liners and fuel
pumps. On the other hand a shortage of HSFO in certain ports had been experienced as only a small percentage of the global fleet
was equipped with Scrubbers and the trading of HSFO may not continue be economical to fuel suppliers.
If the price differential between VLSFO and HSFO is narrower than expected due to among other things, a drop in oil prices and/or a
reduced demand for oil, then we may not realize any return, or we may realize a lower return on our investment in Scrubbers than that
which we expected, which could have a material adverse effect on our results of operations, cash flows and financial position. Con-
versely, if the price differential between VLSFO and HSFO is wider than expected, about half of our vessels that will not be equipped
with Scrubbers may face difficulties in competing with vessels equipped with Scrubbers. Furthermore, restrictions of effluents from
Scrubbers have been or are being considered to be imposed in various jurisdictions, mainly in ports, which may affect the viability of
such investments. All the above could have a material adverse effect on our results of operations, cash flows and financial position.
See “Item 4. Information on the company. — B. Business Overview — IMO and other related regulations — Nitrogen and Sulfur
Oxide Emission Regulations” for more information.
Environmental regulations in relation to climate change and GHG emissions may increase operational and financial
restrictions, and environmental compliance costs.
A number of countries and the IMO have adopted, or are considering the adoption of regulatory frameworks to reduce greenhouse
gas emissions due to concern over the risk of climate change. These regulatory measures may include, among others, the adoption
of cap and trade regimes, carbon taxes, increased efficiency standards and incentives or mandates for use of alternative fuels, i.e.
fuels with lower CO2 footprint compared to fossil fuels and use of renewable energy. GHG reduction measures adopted, or further
additional measures to be adopted by the IMO, EU and other jurisdictions for achieving 2030 goals may impose operational and
financial restrictions, carbon taxes or an emission trading system on less efficient vessels starting from 2023, gradually affecting
younger vessels, even newbuilds after 2030, reducing their trade and competitiveness, increasing their environmental compli-
ance costs, imposing additional energy efficiency investments, or even making such vessels obsolete. This or other developments
may lead to environmental taxation affecting less energy efficient vessels, reduce their trade and competitiveness and make
certain vessels in our fleet obsolete, which may result in financial impacts on our results of operations that we cannot predict
with certainty at this time.This could have a material adverse effect on our business, financial condition and results of operations.
See “Item 4. Information on the company. — B. Business Overview — Regulations: Safety and the Environment - Greenhouse Gas
Regulation – United Nations Framework Convention on Climate Change” for more information.
In response to the above GHG environmental regulations, we monitor CO2 vessel emissions pursuant to the International Maritime
Organization’s fuel oil consumption Data Collection System (“IMO DCS”) and to the European Monitoring, Reporting and Verification
Regulation (“EU-MRV”), assessing in parallel the applicability of relevant energy efficiency measures. Furthermore, we have pursued
a fleet renewal strategy having entered into memoranda of agreement for the acquisition of sixteen in total environmentally advanced
dry-bulk GHG-EEDI Phase 3 NOx-Tier III compliant newbuilds, including two methanol dual fueled, with nine already been delivered,
one scheduled to be delivered in the remainder of 2024, two in 2025, three in 2026 and one in 2027.
Increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to our
ESG policies may impose additional costs on us or expose us to additional risks.
Companies across all industries, including the shipping industry, are facing increased scrutiny relating to their ESG policies.
Investor advocacy groups, certain institutional investors, investment funds, lenders and other market participants are increas-
ingly focused on ESG practices and in recent years have placed increasing importance on the implications and social cost of their
investments. The increased focus and activism related to ESG and similar matters may hinder access to capital, as investors and
lenders may decide to reallocate capital or to not commit capital as a result of their assessment of a company’s ESG practices.
Companies which do not adapt to or comply with investor, lender or other industry shareholder expectations and standards, which
are evolving, or which are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of
whether there is a legal requirement to do so, may suffer from reputational damage and the business, financial condition, and/or
the stock price of such a company could be materially and adversely affected. As a result, we may be required to implement more
stringent ESG procedures or standards so that we continue to have access to capital and our existing and future investors and
lenders remain invested in us and make further investments in us.
Specifically, we may face increasing pressures from investors, lenders and other market participants, who are increasingly fo-
cused on climate change, to prioritize sustainable energy practices, reduce our carbon footprint and promote sustainability.
Additionally, certain investors and lenders may exclude drybulk shipping companies, such as us, from their investing portfolios
altogether due to environmental, social and governance factors. Growing public concern about the environmental impact and the
adverse consequences of climate change may also affect demand for our services, such as reduced demand for coal in the future,
one of the primary cargoes carried by our vessels. Any long-term economic consequences of climate change could have a signifi-
cant financial and operational adverse impact on our business that we cannot predict with certainty at this time. If we are faced
with limitations in the debt and/or equity markets as a result of these concerns, or if we are unable to access alternative means
of financing on acceptable terms, or at all, we may be unable to access funds to implement our business strategy or service our
indebtedness, which could have a material adverse effect on our financial condition and results of operations.
Over the past few years, we have made publicly available our annual sustainability report where we present our environmental,
social and governance strategy for the future, as well as the impact of our operations and business on society and the environ-
ment. Additionally, in November 2023, we announced the formation of an environmental, social and governance board committee
(“ESG Committee”) consisting of six board members, four of whom are independent directors. The President of the Company has
been assigned to lead the management team on ESG matters and report to the ESG Committee. The ESG Committee shall review
the Company’s ESG performance and ensure governance oversight by the Board of Directors of the ESG strategy and implementa-
tion, consistent with the priorities outlined in the Company’s annual sustainability report.
See “Item 4. Information on the company. — B. Business Overview” for more information.
However, in light of investors’ increased focus on ESG matters, there can be no certainty that we will manage to successfully meet
society’s expectations as to our proper role. Any failure or perceived failure by us in this regard could have a material adverse
effect on our reputation and on our business, share price, financial condition, or results of operations, including the sustainability
of our business over time.
We are subject to complex laws and regulations, including international safety regulations and requirements imposed
by our classification societies and the failure to comply with these regulations and requirements may subject us to
increased costs and liability, may adversely affect our insurance coverage and may result in a denial of access to, or
detention in, certain ports.
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We are subject to complex laws and regulations, such as international conventions, regulations and treaties, national laws, state and
local laws and regulations in force in the jurisdictions in which the vessels operate, as well as in the country or countries of their regis-
tration. We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses, certificates and
financial assurances with respect to our operations. In addition, vessel classification societies also impose significant safety and other
requirements on our vessels. Because such conventions, laws, and regulations are often revised, we may not be able to predict the
ultimate cost of complying with such conventions, laws and regulations or the impact thereof on the resale prices or useful lives of our
vessels. Compliance with regulations and laws could limit our ability to do business or increase the cost of our doing business, which
could have a material adverse effect on our business, results of operations, cash flows and financial condition and our available cash.
Our industry’s regulatory environment is becoming exponentially complex and includes regulations of the IMO, the United States, the
European Union, China, India, Australia and other countries in which we operate. Such regulations include requirements set forth in
the IMO’s International Safety Management (“ISM”) Code, the International Convention for the Prevention of Pollution from Ships of
1973 (“MARPOL”), the International Ship and Port Facility Security Code (“ISPS”), the United States Oil Pollution Act of 1990, the
U.S. Comprehensive Environmental Response, Compensation and Liability Act of 1980, the U.S. Clean Air Act, the U.S. Clean Water
Act, the U.S. Marine Transportation Security Act of 2002 and others. In the foreseeable future we expect the trend of increasing
regulatory compliance complexity to continue. For example, United States agencies and the IMO’s Maritime Safety Committee have
adopted cyber security regulations which requires ship owners and managers to incorporate cyber risk management and security
into their safety management.
The operation of our vessels is affected by the requirements set forth in the IMO ISM Code. Under the ISM Code, we are required to
develop and maintain an extensive Safety Management System (“SMS”) that includes the adoption of a safety and environmental
protection policy. Failure to comply with the ISM Code may subject us to increased liability, invalidate existing insurance or decrease
available insurance coverage for the affected vessels and result in a denial of access to, or detention in, certain ports. For example,
the U.S. Coast Guard and E.U. authorities have indicated that vessels not in compliance with the ISM Code will be prohibited from trad-
ing in U.S. and E.U. ports. Currently, each of the vessels in our current fleet is ISM Code-certified, but we may not be able to maintain
such certification at all times. If we fail to maintain ISM Code certification for our vessels, we may also breach covenants in certain of
our credit and loan facilities that require that our vessels be ISM Code-certified. If we breach such covenants due to failure to maintain
ISM Code certification and are unable to remedy the relevant breach, our lenders could accelerate our indebtedness and foreclose on
the vessels in our fleet securing those credit or loan facilities.
See Item 4. Information on the Company-Business Overview-Environmental and Other Regulations for more information.
Increased inspection procedures, tighter import and export controls and survey requirements could increase costs and
disrupt our business.
International shipping is subject to various security and customs inspections and related procedures in countries of origin and
destination. Inspection procedures can result in the seizure of our vessels, or the contents of our vessels, delays in the loading,
offloading or delivery and the levying of customs duties, fines and other penalties against us. It is possible that changes to inspection
procedures could impose additional financial and legal obligations on us. Furthermore, changes to inspection procedures could also
impose additional costs and obligations on our customers and may, in certain cases, render the shipment of certain types of cargo
impractical. Any such changes or developments may have a material adverse effect on our business, financial condition and results of
operations. The hull and machinery of every commercial vessel must be certified as safe and seaworthy in accordance with applicable
rules and regulations, and accordingly vessels must undergo regular surveys. If any vessel does not maintain its class and/or fails
any annual survey, intermediate survey or special survey, the vessel will be unable to trade between ports and will be unemployable
and we would be in violation of certain covenants in our credit and loan facilities. This would also negatively impact our revenues.
Our vessels are exposed to operational risks that may not be adequately covered by our insurance.
The operation of any vessel includes risks such as weather conditions, mechanical failure, collision, fire, contact with floating
objects, cargo or property loss or damage and business interruption due to political circumstances in countries, piracy, terrorist
and cyber terrorist attacks, armed hostilities and labor strikes. Such occurrences could result in death or injury to persons, loss,
damage or destruction of property or environmental damage, delays in the delivery of cargo, loss of revenues from or termination
of charter contracts, governmental fines, penalties or restrictions on conducting business, higher insurance rates and damage to
our reputation and customer relationships generally.
We may not be adequately insured against all risks, and our insurers may not pay particular claims. With respect to war risks
insurance, which we usually obtain for certain of our vessels making port calls in designated war zone areas, such insurance may
not be obtained prior to one of our vessels entering into an actual war zone, which could result in that vessel not being insured.
Even if our insurance coverage is adequate to cover our losses, we may not be able to timely obtain a replacement vessel in the
event of a loss. Under the terms of our credit facilities, we will be subject to restrictions on the use of any proceeds we may
receive from claims under our insurance policies. Furthermore, in the future, we may not be able to maintain or obtain adequate
insurance coverage at reasonable rates for our fleet. We may also be subject to calls, or premiums, in amounts based not only
on our own claim records but also the claim records of all other members of the protection and indemnity associations through
which we receive indemnity insurance coverage for tort liability. Our insurance policies also contain deductibles, limitations and
exclusions which, although we believe are standard in the shipping industry, may nevertheless increase our costs in the event of a
claim or decrease any recovery in the event of a loss. If the damages from a catastrophic oil spill or other marine disaster exceed
our insurance coverage, the payment of those damages could have a material adverse effect on our business and could possibly
result in our insolvency.
In general, we do not carry loss of hire insurance. Occasionally, we may decide to carry loss of hire insurance when our vessels
are trading in areas where a history of piracy has been reported. Loss of hire insurance covers the loss of revenue during extended
vessel off-hire periods, such as those that occur during an unscheduled drydocking or unscheduled repairs due to damage to the
vessel. Accordingly, any loss of a vessel or any extended period of vessel off-hire, due to an accident or otherwise, could have a
material adverse effect on our business, financial condition and results of operations.
World events, including terrorist attacks, other international hostilities and potential disruption of shipping routes due
to events outside of our control, including the war between Russia and Ukraine and the war between Israel and Hamas
and Red Sea trade disruption, could negatively affect our results of operations and financial condition.
We conduct most of our operations outside of the U.S. and our business, results of operations, cash flows, financial condition and
ability to pay dividends, if any, in the future may be adversely affected by changing economic, political and government conditions
in the countries and regions where our vessels are employed or registered. Moreover, we operate in a sector of the economy that
is likely to be adversely impacted by the effects of political conflicts, including the current instability in the Middle East, North Af-
rica and other countries and geographic areas, terrorist or other attacks and war or international hostilities. Terrorist attacks and
the continuing response of the U.S. and others to these attacks, as well as the threat of future terrorist attacks around the world,
continues to cause uncertainty in the world’s financial markets and may affect our business, operating results and financial condi-
tion. Continuing conflicts and recent developments in the Middle East and North Africa, the escalation of war between Russia and
Ukraine, the war between Israel and Hamas, the trade disruption in the Red Sea and the presence of U.S. or other armed forces in
Red Sea, Iraq, Syria, Afghanistan and various other regions, may lead to additional acts of terrorism and armed conflict around the
world, which may contribute to further economic and geopolitical instability in the global financial markets. These uncertainties
could also adversely affect our ability to obtain additional financing on terms acceptable to us or at all. In the past, political con-
flicts have also resulted in attacks on vessels, mining of waterways and other efforts to disrupt international shipping, particularly
in the Arabian Gulf region. These types of attacks have also affected vessels trading in regions such as the Black Sea, South China
Sea and the Gulf of Aden off the coast of Somalia. The IMO’s council sessions, addressed the impacts on shipping and seafarers,
as a result of the war in the Black Sea and the Sea of Azov. The IMO called for the need to preserve the integrity of maritime sup-
ply chains and the safety and welfare of seafarers and any spillover effects of the military action on global shipping, logistics and
supply chains, in particular the impacts on the delivery of commodities and food to developing nations and the impacts on energy
supplies. Any of these occurrences could have a material adverse impact on our operating results, revenues and costs.
The war between Russia and Ukraine, which commenced in February 2022 and is still ongoing, has disrupted supply chains and
caused instability and significant volatility in the global economy. Much uncertainty remains regarding the global impact of the
war in Ukraine, and it is possible that such instability, uncertainty and resulting volatility could significantly increase our costs and
adversely affect our business, including our ability to secure charters and financing on attractive terms, and as a result, adversely
affect our business, financial condition, results of operation and cash flows.
On October 7, 2023, the war between Israel and Hamas commenced, leading to hostilities in Israel and Gaza. The war is still ongo-
ing. Regional militant groups, such as Hezbollah, have also launched attacks directed against Israel. There is widespread uncer-
tainty about the degree of any increased escalation of the war, interventions by other groups or nations, and resulting instability in
the Middle East. The impacts of the war on the global economy, including commodity pricing and the disruption of shipping routes,
are also currently unknown. Following attacks on merchant vessels in the region of the Bab al-Mandab Strait and the Gulf of Aden
at the southern end of the Red Sea, there is disruption in the maritime trade towards Mediterranean Sea through Suez-Canal. As
a result we have diverted our fleet from sailing in the specific region. While our vessels currently do not sail in the Red Sea, we
will continue to monitor the situation to assess whether the trade disruption could have any impact on our operations or financial
performance. Any dramatic escalation of the trade disruptions could lead to increased operational costs incurred by our business,
or otherwise harm our financial condition, results of operation and cash flows.
As a result of the war between Russia and Ukraine, Switzerland, the US, the EU, the UK and others have announced unprecedented
levels of sanctions and other measures against Russia and certain Russian entities and nationals. Such sanctions against Russia
may adversely affect our business, financial condition, results of operation and cash flows. For example, apart from the immediate
commercial disruptions caused in the war zone, escalating tensions among the two countries and fears of potential shortages in
the supply of Russian crude have caused the price of oil to trade above $100 per barrel from February 28, 2022 to August 2,
2022. The ongoing war could result in the imposition of further economic sanctions against Russia, with uncertain impacts on
the drybulk market and the world economy. While we do not have any Ukrainian, Russian, Israeli or Palestinian crew, our vessels
currently do not sail in the Black Sea or the Red Sea and we otherwise conduct limited operations in Russia, Ukraine, and Israel, it
is possible that the war in Ukraine and the conflict in Israel, including any increased shipping costs, disruptions of global shipping
routes, any impact on the global supply chain and any impact on current or potential customers caused by these events, could
adversely affect our operations or financial performance.
The outbreak of public health threats and epidemics or pandemics and the resulting disruptions to the international ship-
ping industry, could negatively affect our business, financial performance and our results of operations.
On March 18, 2020, the outbreak of Covid-19 ws declared a pandemic by the World Health Organization. Covid-19 has affected
our industry, see “Item 4. Information on the company. — B. Business Overview — Corona Virus Outbreak” for more information.
The effects of restrictions of a pandemic or epidemic on our operations, including travel restrictions, restrictions in vessels’ port calls
and restrictions and extended periods of remote work arrangements, could strain our business continuity plans, may introduce trade
disruptions and operational risks, including but not limited to cybersecurity risks, and impair our ability to manage our business. The
extent and duration of outbreak of such pandemics or epidemics and measures taken in response thereto may negatively impact our
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business, financial performance and operating results and could have a material adverse effect on our business, results of operations,
cash flows, financial condition, value of our vessels, and our ability to pay dividends.
Acts of piracy on ocean-going vessels may increase in frequency, which could adversely affect our business.
Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the South China Sea, the Indi-
an Ocean and in the Gulf of Aden off the coast of Somalia. Although the frequency of sea piracy worldwide has generally decreased
since 2013, sea piracy incidents continue to occur, particularly in the Gulf of Aden off the coast of Somalia and increasingly in
the Sulu Sea and the Gulf of Guinea, with drybulk vessels and tankers particularly vulnerable to such attacks. Acts of piracy could
result in harm or danger to the crews that man our vessels.
If these piracy attacks occur in regions in which our vessels are deployed that insurers characterized as “war risk” zones or Joint
War Committee “war and strikes” listed areas, premiums payable for such coverage could increase significantly and such insur-
ance coverage may be more difficult to obtain. In addition, crew costs, including the employment of onboard security guards, could
increase in such circumstances. Furthermore, while we believe the charterer remains liable for charter payments when a vessel is
seized by pirates, the charterer may dispute this and withhold charterhire until the vessel is released. A charterer may also claim
that a vessel seized by pirates was not “on-hire” for a certain number of days and is therefore entitled to cancel the charter party,
a claim that we would dispute. We may not be adequately insured to cover losses from these incidents, which could have a material
adverse effect on us. In addition, any detention hijacking as a result of an act of piracy against our vessels, or an increase in cost, or
unavailability, of insurance for our vessels, could have a material adverse impact on our business, financial condition and earnings.
The operation of drybulk vessels has certain unique operational and technical risks which include mechanical failure,
collision, property loss, cargo loss or damage as well as personal injury, illness and loss of life and could lead to an envi-
ronmental disaster; failure to adequately maintain our vessels or address such risks could have a material adverse effect
on our business, financial condition and results of operations.
The operation of a drybulk vessel has certain unique operational and technical risks which include mechanical failure, collision,
property loss, cargo loss or damage as well as personal injury, illness and loss of life and could lead to an environmental disaster.
Drybulk vessels may develop unexpected mechanical and operational problems due to several reasons including improper mainte-
nance and weather conditions. We operate certain of our vessels using VLSFO, some of which, under certain conditions, may cause
loss of the vessel’s main engine power with severe results that can lead to collision and loss of a vessel.
With a drybulk vessel, the cargo itself and its interaction with the vessel may create operational risks. By their nature, drybulk
cargoes are often heavy, dense and easily shifted, and they may react badly to water exposure. In addition, drybulk vessels are
often subjected to battering treatment during unloading operations with grabs, jackhammers (to pry encrusted cargoes out of the
hold) and small bulldozers. This treatment may cause damage to the vessel. Vessels damaged due to treatment during unloading
procedures or with steel plate diminution may be more susceptible to breach while at sea. Breaches of a drybulk vessel’s hull may
lead to the flooding of the vessel’s holds. If a drybulk vessel suffers flooding in its forward holds, the bulk cargo may become so
dense and waterlogged that its pressure may buckle the vessel’s bulkheads, leading to the loss of a vessel. If we do not adequately
maintain our vessels or address such operational and technical risks, we may be unable to prevent these events. The occurrence
of any of these events could have a material adverse effect on our business, financial condition and results of operations.
Maritime claimants could arrest one or more of our vessels, which could interrupt our cash flow.
Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien
against a vessel, or other assets of the relevant vessel-owning company, for unsatisfied debts, claims or damages. In many juris-
dictions, a claimant may seek to obtain security for its claim by arresting a vessel through foreclosure proceedings. The arrest or
attachment of one or more of our vessels, or other assets of the relevant vessel-owning company or companies, could cause us to
default on a charter, breach covenants in certain of our credit facilities, interrupt our cash flow and require us to pay large sums
of money to have the arrest or attachment lifted. In addition, in some jurisdictions, such as South Africa, under the “sister ship”
theory of liability, a claimant may arrest both the vessel which is subject to the claimant’s maritime lien and any “associated”
vessel, which is any vessel owned or controlled by the same owner. Claimants could attempt to assert “sister ship” liability against
one vessel in our fleet for claims relating to another of our vessels.
Governments could requisition our vessels during a period of war or emergency, resulting in a loss of earnings.
A government could requisition one or more of our vessels for title or for hire. Requisition for title occurs when a government
takes control of a vessel and becomes its owner, while requisition for hire occurs when a government takes control of a vessel
and effectively becomes its charterer at dictated charter rates. Generally, requisitions occur during periods of war or emergency,
although governments may elect to requisition vessels in other circumstances. Even if we would be entitled to compensation in the
event of a requisition of one or more of our vessels, the amount and timing of payment would be uncertain. Government requisi-
tion of one or more of our vessels may cause us to breach covenants in certain of our credit facilities, and could have a material
adverse effect on our business, financial condition and results of operations.
We rely on information technology, and if we are unable to protect against service interruptions, data corruption, cyber based
attacks or network security breaches, our operations could be disrupted and our business could be negatively affected.
In the ordinary course of business, we rely on information technology networks and systems to process, transmit, and store
electronic information and to manage or support a variety of business processes and activities. Our information systems and
networks could become targeted and attacked by individuals or organized groups. Our vessels may also rely on information
systems for parts of their navigation, propulsion, power control, communications and cargo operations. Safety measures are in
place to secure our vessels against cyber-security attacks and disruptions to their information systems. These measures may
not adequately prevent security breaches from constantly evolving and increasingly sophisticated threats. A cyber attack could
materially and adversely affect our business operations, financial condition, results of operations and cash flows and our reputa-
tion. In addition, cyber attacks could lead to potential unauthorized access to our systems targeting ransomware, data theft, loss
and corruption, disclosure of proprietary or confidential information or, personal data. Cyber attacks on our vessels may also
lead to potential unauthorized access to, or service interruptions, denial or manipulation of the navigational systems of our ves-
sels, which could result in hazardous accidents. There is no assurance that we will not experience these service interruptions or
cyber attacks in the future. Further, as the methods of cyber attacks continue to evolve, we may be required to expend additional
resources to continue to modify or enhance our protective measures, or to investigate and remedy any vulnerabilities to cyber
attacks. Moreover, we do not carry cyber attack insurance to cover the aforementioned risks to our information technology.
A cyber attack could also lead to litigation, fines, other remedial action, heightened regulatory scrutiny and reputational damage.
In addition, our remediation efforts may not be successful, and we may not have adequate insurance to cover these losses. These
information technology systems, some of which are managed by third parties, may be susceptible to damage, disruptions or shut-
downs, hardware or software failures, power outages, computer viruses, cyber attacks, telecommunication failures, user errors
or catastrophic events. Risks and vulnerabilities can also arise out of inadequacies in design, integration and/or maintenance of
information technology systems , as well as lapses in cyber discipline. Furthermore, as of May 25, 2018, data breaches on per-
sonal data, as defined in the European General Data Protection Regulation, could lead to administrative fines up to €20 million or
up to 4% of the total worldwide annual turnover of the company, whichever is greater. Our information technology systems are
becoming increasingly integrated, so damage, disruption or shutdown to the system could result in a more widespread impact.
If our information technology systems suffer severe damage, disruption or shutdown, and our business continuity plans do not
effectively resolve the issues in a timely manner, our operations could be disrupted and our business and reputation could be
negatively affected. Moreover, cyber attacks against the Ukrainian government and other countries in the region have been re-
ported in connection with the war between Russia and Ukraine. To the extent such attacks have collateral effects on global critical
shipping infrastructure or on us, such developments could adversely affect our business, operating results and financial condition.
Recent action by the IMO’s Maritime Safety Committee and U.S. agencies indicate that cyber security regulations for the maritime
industry are likely to be further developed in the near future in an attempt to combat cyber security threats. This might cause
companies to cultivate additional procedures for monitoring cyber security, which could require additional expenses and/or capi-
tal expenditures. However, the impact of such regulations is difficult to predict at this time.
Political uncertainty and an increase in trade protectionism could have a material adverse impact on our charterers’ busi-
ness and, in turn, could cause a material adverse impact on our results of operations, financial condition and cash flows.
Our operations expose us to the risk that increased trade protectionism from China, other countries in the Asian region, the United
States, the EU, Australia or other nations will adversely affect our business. If the global recovery is undermined by downside risks
and the economic downturn returns, or if the regulatory environment otherwise dictates, governments may turn to trade barriers to
protect their domestic industries against foreign imports, thereby depressing the demand for shipping. Specifically, increasing trade
protectionism affecting the markets that our charterers serve may cause (i) a decrease in cargoes available to our charterers in favor
of domestic charterers and domestically owned ships and (ii) an increase in the risks associated with importing goods to such markets.
For instance, the government of China has implemented economic policies aimed at increasing domestic consumption of Chinese-made
goods and restricting currency exchanges within China. Further, on January 23, 2017, former President Trump signed an execu-
tive order withdrawing the United States from the Trans-Pacific Partnership, a global trade agreement intended to include the United
States, Canada, Mexico, Peru and a number of Asian countries. Further, in January 2019, the United States announced expanded
sanctions against Venezuela, which may have an effect on its oil output and in turn affect global oil supply. Throughout 2018 and
2019, former President Trump called for substantial changes to foreign trade policy with China and raised, and proposed to further
raise in the future, tariffs on several Chinese goods in order to reverse what he perceived as unfair trade practices that have negatively
impacted U.S. businesses. The announcement of such tariffs has triggered retaliatory actions from foreign governments, including
China, and may trigger retaliatory actions by other foreign governments, resulting in a “trade war.” The trade war has had the effect of
reducing the supply of goods available for import or export and has therefore resulted in a decrease in demand for shipping. On Janu-
ary 15, 2020, the United States and China signed the Phase One Deal, agreeing to the rollback of tariffs, expansion of trade purchases,
and renewed commitments on intellectual property, technology transfer, and currency practices deescalating the trade war. Under the
Phase One Deal the U.S. has committed to reduce tariffs from 15 % to 7.5% on US$120 billion worth of goods and China has agreed
to halve tariffs on 1,717 U.S. goods, lowering the tariff on some items from 10% to 5%, and others from 5 % to 2.5 %, which both
took effect on February 14, 2020. On January 19, 2022 U.S. President Joe Biden said he will not lift tariffs on Chinese imports since
Beijing has not abided by the Phase One Deal. Subsequently, in May 2022, US President Joe Biden stated that discussions were ongo-
ing about potentially dropping trade tariffs on China that were imposed by former US President Trump. During 2023, trade relations
between the U.S and China yet again became increasingly tense. In August 2023, President Biden signed an executive order aimed at
restricting U.S. investments into certain areas of the Chinese technology sector, citing U.S. national security concerns.
There is no certainty that U.S. and China will again agree to a de-escalation of the trade war between the two countries. There is the
prospect of additional executive orders by the Biden Administration asserting protection of U.S. national security interests. More-
over, current presidential candidate and former president Donald Trump has indicated that his administration would seek a return
to the assertive trade posture that it had maintained during his previous term in office. Accordingly,an increase in trade restrictions
between the U.S. and China could materialize or be perceived as likely. Any of those events may have an adverse effect on global
market conditions, including global trade and our charterers’ business, operating results and financial condition, and could thereby
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affect the charterers’ ability to make timely charter hire payments to us and to renew or increase the number of their time charters
with us. This could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Seasonal fluctuations in industry demand could have a material adverse effect on our business, financial condition and
results of operations and the amount of available cash with which we can pay dividends.
We operate our vessels in markets that have historically exhibited seasonal variations in demand and, as a result, in charter rates.
Seasonality is related to several factors and may result in quarter-to-quarter volatility in our results of operations, which could
affect the amount of dividends, if any, that we may pay to our shareholders. For example, the market for marine drybulk transpor-
tation services is typically stronger in the fall months in anticipation of increased consumption of coal in the northern hemisphere
during the winter months and the grain export season from North America. Similarly, the market for marine drybulk transporta-
tion services is typically stronger in the spring months in anticipation of the South American grain export season due to increased
distance traveled by vessels to their end destination known as ton mile effect, as well as increased coal imports in parts of Asia
due to additional electricity demand for cooling during the summer months. Demand for marine drybulk transportation services is
typically weaker at the beginning of the calendar year and during the summer months. In addition, unpredictable weather patterns
during these periods tend to disrupt vessel scheduling and supplies of certain commodities. This seasonality could have a material
adverse effect on our business, financial condition and results of operations.
Charterers may renegotiate or default on period time charters, which could reduce our revenues and have a material
adverse effect on our business, financial condition and results of operations.
The ability and willingness of each of our counterparties to perform its obligations under a period time charter agreement with
us will depend on a number of factors that are beyond our control and may include, among other things, general economic condi-
tions, the condition of the drybulk shipping industry and the overall financial condition of the counterparties. If we enter into period
time charters with charterers when charter rates are high and charter rates subsequently fall significantly, charterers may seek
to renegotiate financial terms or may default on their obligations. Additionally, charterers may attempt to bring claims against us
based on vessel performance or cargo loading or unloading operations, seeking to renegotiate financial terms or avoid payments.
Also, our charterers may experience financial difficulties due to prevailing economic conditions or for other reasons, and as a re-
sult may default on their obligations. In past years, the industry experienced numerous incidents of charterers renegotiating their
charters or defaulting on their obligations thereunder. In December 2020, we agreed to the early termination of an existing char-
ter of a Capesize-class vessel at the request of the charterer which was contractually due to expire in January 2024. In exchange
for the early redelivery of the vessel, the charterer paid us cash compensation of $8.1 million. The vessel was subsequently de-
ployed under a new period time charter with a different charterer for a duration of 12 to 14 months at a gross daily charter rate
linked to the 5 TC Baltic Exchange Capesize Index (“BCI-180 5TC’’) times 119%. As of February 16, 2024, we had not received
any additional notice of early redelivery or termination from any of our charters. If a charterer defaults on a charter, we will, to
the extent commercially reasonable, seek the remedies available to us, which may include arbitration or litigation to enforce the
contract, although such efforts may not be successful. Should a charterer default on a period time charter, we may have to enter
into a charter at a lower charter rate, which would reduce our revenues. If we cannot enter into a new period time charter, we may
have to secure a charter in the spot market, where charter rates are volatile and revenues are less predictable. It is also possible
that we would be unable to secure a charter at all, which would also reduce our revenues, and could have a material adverse effect
on our business, financial condition, results of operations, loan and credit facility covenants and cash flows.
We depend on a limited number of customers for a large part of our revenues and the loss of one or more of these custom-
ers could have a material adverse effect on our business, financial condition and results of operations.
We expect to derive a significant part of our revenues from a limited number of customers. During the year ended December 31,
2023, two of our charterers each accounted for more than 10.0% of our revenues and in previous periods some of our charterers
each accounted for more than 10.0% of our revenues. We could lose a customer for many different reasons, including:
~ a failure of the customer to make charter payments because of its financial inability, disagreements with us or otherwise;
~ the customer’s termination of its charters because of our non-performance, including serious deficiencies with the vessels
we provide to that customer or prolonged periods of off-hire;
~ a prolonged force majeure event that affects the customer may prevent us from performing services for that customer, i.e.,
damage to or destruction of relevant production facilities and war or political unrest; and
~ the other reasons discussed in this section.
If we lose a key customer, we may be unable to obtain period time charters on comparable terms with charterers of comparable
standing or may have increased exposure to the volatile spot market, which is highly competitive and subject to significant price
fluctuations. We would not receive any revenues from a vessel while it remained unchartered, but we may be required to pay
expenses necessary to maintain the vessel in proper operating condition, insure it and service any indebtedness secured by such
vessel. The loss of any of our key customers, a decline in payments under our charters or the failure of a key customer to perform
under its charters with us could have a material adverse effect on our business, financial condition and results of operations.
When our contracts expire, we may not be able to successfully replace them. Our growth and our capacity to replace them
depends on our ability to expand relationships with existing customers and obtain new customers, for which we will face
substantial competition from new entrants and established companies with significant resources.
Time-charter contracts provide income at pre-determined rates over short or more extended periods of time. However, the pro-
cess for obtaining new time charters especially longer term time charters is highly competitive and generally involves a lengthy,
intensive and continuous screening and vetting process and the submission of competitive bids. In addition to the quality, age and
suitability of the vessel, longer term shipping contracts tend to be awarded based upon a variety of other factors relating to the
vessel operator, including:
~ the operator’s environmental, health and safety record;
~ compliance with the IMO standards and regulatory industry standards;
~ shipping industry relationships, reputation for customer service, technical and operating expertise;
~ shipping experience and quality of ship operations, including cost-effectiveness;
~ quality, experience and technical capability of crews;
~ willingness to accept operational risks pursuant to the charter, such as allowing termination of the charter for force
majeure events; and
As a result of these factors we may be unable to expand our relationships with existing customers or obtain new customers for our
charters on a profitable basis, if at all, therefore, when our contracts including our long-term charters expire, we cannot assure you
that we will be able to replace them promptly or at all or at rates sufficient to allow us to operate our business profitably, to meet our
obligations, including payment of debt service to our lenders, or to pay dividends. Our ability to renew the charter contracts on our
vessels on the expiration or termination of our current charters, or, on vessels that we may acquire in the future, the charter rates re-
ceivable under any replacement charter contracts, will depend upon, among other things, economic conditions in the sectors in which
our vessels operate at that time, changes in the supply and demand for vessel capacity and changes in the supply and demand for
the transportation of commodities. During periods of market distress when long-term charters may be renewed at rates at or below
operating costs, we may not choose to charter our vessels for longer terms particularly if doing so would create an ongoing negative
cash flow during the period of the charter. We may instead choose to employ our vessels in the spot market for short periods, or in
index-linked charters, or be forced to idle our vessels, or lay them up, or scrap them depending on market conditions and outlook at
the time those vessels become available for charter.
However, if we are successful in employing our vessels under longer-term time charters, our vessels will not be available for trading
in the spot market during an upturn in the market cycle, when spot trading may be more profitable. If we cannot successfully employ
our vessels in profitable charter contracts, our results of operations and operating cash flow could be materially adversely affected.
We have adopted an anti-bribery policy consistent with the provisions of the FCPA and anti-bribery legislation in other
jurisdictions. Actual or alleged violations of these policies could result in damage of our reputation, sanctions, criminal
penalties, imprisonment, civil action and fines, which could have an adverse effect on our business.
We operate in a number of countries throughout the world, including countries known to have a reputation for corruption. We are
committed to doing business in accordance with applicable anti-corruption laws and have adopted policies consistent and in full
compliance with the FCPA and anti-bribery legislation in other jurisdictions. We are subject, however, to the risk that we, our affili-
ated entities or our or their respective officers, directors, employees and agents may take actions determined to be in violation of
such anti-corruption laws, including the FCPA. Any such violation could result in substantial fines, sanctions, civil and/or criminal
penalties or curtailment of operations in certain jurisdictions, and might adversely affect our business, results of operations or
financial condition. In addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore,
detecting, investigating and resolving actual or alleged violations is expensive and can consume significant time and attention of
our senior management.
We may have difficulty properly managing our planned growth through acquisitions of additional vessels.
As of February 16, 2024, we intend to vigorously continue our fleet renewal strategy having entered into contracts for the ac-
quisition of seven environmentally advanced Japanese and Chinese dry-bulk GHG-EEDI Phase 3 NOx-Tier III compliant newbuilds,
including two methanol dual fueled, scheduled to be delivered one in 2024, two in 2025, three in 2026 and one in 2027. We
may contract additional newbuild vessels or make selective acquisitions of additional second-hand vessels. Our future growth will
primarily depend on our ability to locate and acquire suitable vessels, enlarge our customer base, operate and supervise any new-
builds we may order and obtain required debt or equity financing on acceptable terms.
A delay in the delivery to us of any such vessel, or the failure of the shipyard to deliver a vessel at all, could cause us to breach our
obligations under a related charter and could adversely affect our earnings. In addition, the delivery of any of these vessels with
substantial defects could have similar consequences.
A shipyard could fail to deliver a newbuild on time or at all because of:
~ work stoppages or other hostilities, political, economic or other disturbances that disrupt the operations of the shipyard,
including as a result of Covid-19;
~ quality or engineering problems;
~ bankruptcy or other financial crisis of the shipyard;
~ a backlog of orders at the shipyard;
~ disputes between the Company and the shipyard regarding contractual obligations;
~ weather interference or catastrophic events, such as major earthquakes or fires;
~ our requests for changes to the original vessel specifications; or
~ shortages of or delays in the receipt of necessary construction materials, such as steel, or equipment, such as main
engines, electricity generators and propellers.
A third-party seller could fail to deliver a second-hand vessel on time or at all because of:
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~ bankruptcy or other financial crisis of the third-party seller;
~ quality or engineering problems;
~ disputes between the Company and the third-party seller regarding contractual obligations; or
~ weather interference or catastrophic events, such as major earthquakes or fires.
In addition, we may seek to terminate or novate a vessel acquisition contract due to market conditions, financing limitations or
other reasons. The outcome of contract termination or novation negotiations may require us to forego deposits on construc-
tion or acquisition, as applicable, and pay additional cancellation fees. In addition, where we have already arranged a future
charter with respect to the terminated contract, we may incur liabilities to such charter counterparty depending on the terms
of such charter.
During periods in which charter rates are high, vessel values generally are high as well, and it may be difficult to consummate ves-
sel acquisitions or enter into newbuild contracts at favorable prices. During periods when charter rates are low, we may be unable
to fund the acquisition of vessels, whether through lending or cash on hand. For these reasons, we may be unable to execute our
growth plans or avoid significant expenses and losses in connection with our future growth efforts.
As we expand our business, we will need to improve or expand our operations and financial systems, staff and crew; if we
cannot improve these systems or recruit suitable employees, our performance may be adversely affected.
Our current operating and financial systems may not be adequate as we implement our plan to expand the size of our fleet, and
our Managers’ attempts to improve those systems may be ineffective. In addition, as we expand our fleet, we will have to rely
on our Managers to recruit additional seafarers and shoreside administrative and management personnel. Our Managers may
not be able to continue to hire suitable employees or a sufficient number of employees as we expand our fleet. If our Managers’
unaffiliated crewing agents encounter business or financial difficulties, we may not be able to adequately staff our vessels. We
may also have to increase our customer base to provide continued employment for most of our new vessels. If we are unable
to operate our financial systems, our Managers are unable to operate our operations systems effectively or recruit suitable
employees in sufficient numbers or we are unable to increase our customer base as we expand our fleet, our performance may
be adversely affected.
Unless we set aside reserves for vessel replacement, at the end of a vessel’s useful life, our revenue will decline, which
would adversely affect our cash flows and income.
As of February 16, 2024, the vessels in our current fleet had an average age of 9.9 years. Unless we maintain cash reserves for
vessel replacement, we may be unable to replace the vessels in our fleet upon the expiration of their useful lives. We estimate
the useful life of our vessels to be 25 years from the date of initial delivery from the shipyard. We estimate the useful life of our
second-hand vessels to be 25 years from the date of built. Our cash flows and income are dependent on the revenues we earn by
chartering our vessels to customers. If we are unable to replace the vessels in our fleet upon the expiration of their useful lives,
our business, financial condition and results of operations will be materially adversely affected. Any reserves set aside for vessel
replacement would not be available for other cash needs or dividends.
Our ability to obtain financing on favorable terms due to the unavailability of debt and equity capital and the deterioration
of the global banking markets may adversely impact our business. If economic conditions globally continue to be volatile,
it could impede our operations.
Although capital markets have improved since 2008, when banks and other financial institutions active in the shipping industry
became increasingly unwilling to provide credit, the shipping industry remains negatively affected by the scarcity of credit and
the cost of financing has increased. Financing institutions have increased interest rate margins or even ceased funding for certain
shipping companies. Furthermore, vessels older than 15 years old may not be financed by banks and other financial institutions at
all. Any further deterioration of the global banking markets may decrease the availability of financing or refinancing on acceptable
terms when needed, and we may be unable to meet our debt obligations as they become due.
Despite the uncertainty of growth in China there was a 8.1% global gross domestic product (‘’GDP’’) increase for 2021, a 3%
increase in 2022, and a 5.3% increase in 2023. However, China’s GDP is expected to decrease to 4.5% growth in 2024. Fol-
lowing the lifting of Covid-19 restrictions, the projected economic growth in the U.S. and the E.U. is forecasted at 0.9% and 0.7%
GDP growth for 2024, respectively. Any adverse developments in relation to trade wars, the war between Russia and Ukraine, the
war between Israel and Hamas or Covid-19 may affect credit markets globally and increase volatility of global economic condi-
tions which could impede our results of operations and financial condition.
If we are unable to obtain additional secured indebtedness, we may be unable to refinance our existing indebtedness and
may not be able to finance a fleet replacement and expansion program in the future, any of which would have a material
adverse effect on our business, financial condition and results of operations.
Global financial markets and economic conditions have been volatile. Future financing and investing activities may involve refi-
nancing of certain existing debt near or upon maturity and the financing of future fleet replacement and expansion. Our ability to
refinance existing indebtedness, or to access the capital markets for future offerings may be limited by our financial condition at
the time of any such financing or offering, including the actual or perceived credit quality of our charterers and the market value
of our fleet, as well as by adverse market conditions resulting from, among other things, general economic conditions, weakness
in the financial markets and contingencies and uncertainties that are beyond our control. To the extent that we are unable to
enter into new credit facilities and obtain such additional secured indebtedness on terms acceptable to us, we will need to find
alternative financing. In addition, we may also be liable for other damages for breach of contract. A failure to satisfy our financial
commitments could result in the acceleration of our indebtedness and foreclosure on our vessels. Such events, if they occurred,
would adversely affect our business, financial condition and results of operations.
The aging of our fleet and our acquisitions of second-hand vessels may result in increased operating costs in the future,
which could adversely affect our ability to operate our vessels profitably.
In general, the costs to maintain a vessel in good operating condition increase with the age of the vessel. As of February 16, 2024,
the average age of the vessels in our current fleet was 9.9 years. As our vessels age, they may become less fuel and energy efficient
and more costly to maintain and will not be as advanced as more recently constructed vessels due to improvements in design and
engine technology. Rates for cargo insurance, paid by charterers, also increase with the age of a vessel, making older vessels less
desirable to charterers. Governmental regulations, safety or other equipment standards related to the age of vessels may require
expenditures for alterations, or the addition of new equipment, to our vessels and may restrict the type of activities in which our
vessels may engage, which could adversely affect our ability to operate our vessels profitably. As our vessels age, market condi-
tions may not justify those expenditures or enable us to operate our vessels profitably during the remainder of their useful lives.
Twenty-five vessels in our fleet were over ten years old as of December 31, 2023. We may encounter higher operating and main-
tenance costs due to the age and condition of those vessels. In addition, if in the future we acquire additional second-hand vessels,
such vessels may develop unexpected mechanical and operational problems despite adherence to regular survey schedules and
proper maintenance. We cannot obtain the same knowledge about the condition of a second-hand vessel compared to a newbuild
through the performed inspection prior to the purchase of such second-hand vessel nor about the cost of any required (or antici-
pated) repairs that we would have had if this vessel had been built for and operated exclusively by us. We will have the benefit of
warranties on newly constructed vessels; we may not receive the benefit of warranties on second-hand vessels.
Due to our lack of vessel diversification, supply chain issues and adverse developments in the drybulk transportation
business could adversely affect our business, financial condition and operating results.
We derive all our revenues exclusively from our business operations in the drybulk transportation industry, unlike other shipping
companies which have vessels that carry liquefied gas, crude oil and oil products. Since we depend exclusively on the transport of
drybulk, an adverse market development in the drybulk sector of the transportation industry, such as the reduction of coal trade
due to environmental concerns or the disruption of the grains trade due to war in Ukraine could therefore have a stronger impact
on our business, results of operations, cash flows and financial condition, than if we had multiple sources of revenues, lines of
businesses or types of assets.
We are not able to accurately predict whether SOFR will become the most prevalent alternative reference rate in the mar-
ket. The market transition away from LIBOR to SOFR could have a material adverse effect on our financing costs, and as
a result, our financial condition, operating results and cash flows.
On March 5, 2021, the ICE Benchmark Administration Limited, the administrator of LIBOR and the United Kingdom Financial
Conduct Authority (‘’FCA’’), which regulates the process for establishing LIBOR, announced that all LIBOR settings will either
cease to be published by any benchmark administrator, or no longer be representative immediately after December 31, 2021,
for most LIBOR settings, and immediately after June 30, 2023, for overnight, one-month, three-month, six-month and 12-month
U.S. dollar LIBOR settings. Accordingly, the FCA has stated that it does not intend to persuade or compel banks to submit to LI-
BOR after such respective dates. As of January 1, 2022, publication of one-week and two-month U.S. dollar LIBOR has ceased,
and regulated U.S. financial institutions are no longer permitted to enter into new contracts referencing any LIBOR settings. The
Alternative Reference Rates Committee (‘’ARRC’’), a committee convened by the Federal Reserve Board which has now disbanded,
and the New York Federal Reserve Bank proposed replacing U.S. dollar LIBOR with a new index based on trading in overnight
repurchase agreements, the Secured Overnight Financing Rate (‘’SOFR’’). The ARRC has formally announced and recommended
SOFR as an alternative reference rate to LIBOR. At this time, we are not able to accurately predict whether SOFR will become the
most prevalent alternative reference rate in the market and will be the benchmark for new borrowings. The market transition away
from LIBOR to SOFR could have a material adverse effect on our financing costs, and as a result, our financial condition, operating
results and cash flows.
We are and will be exposed to floating interest rates and may selectively enter into interest rate derivative contracts,
which can result in higher than market interest rates and charges against our income.
The loans under our credit facilities are generally advanced at a floating rate based on SOFR, which is volatile and can affect the
amount of interest payable on our debt, and which, in turn, could have an adverse effect on our earnings and cash flow. In order to
manage our exposure to interest rate fluctuations, we may, from time to time, use interest rate derivatives to effectively fix some
of our floating rate debt obligations. As of February 16, 2024, we do not have any interest rate hedging arrangements in place.
Our financial condition could be materially adversely affected at any time that we have not entered into interest rate hedging ar-
rangements to hedge our exposure to the interest rates applicable to our credit facilities and any other financing arrangements we
may enter into in the future. Moreover, even if we have entered into interest rate swaps or other derivative instruments for pur-
poses of managing our interest rate exposure, our hedging strategies may not be effective and we may incur substantial losses.
The use of interest rate derivatives may affect our results through mark to market valuation of these derivatives, while adverse
movements in interest rate derivatives may require us to post cash as collateral, which may impact our liquidity.
Entering into swaps and derivatives transactions is inherently risky and presents various possibilities for incurring significant
losses. The derivatives strategies that we employ in the future may not be successful or effective, and we could, as a result, incur
substantial additional interest costs.
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Because we generate substantially all of our revenues in U.S. dollars but incur a material portion of our expenses in other
currencies, including our management fees, and also incur a material portion of our indebtedness and our capital expen-
diture requirements in other currencies, exchange rate fluctuations could have a material adverse effect on our business,
financial condition and results of operations.
We generate substantially all of our revenues in U.S. dollars, but in 2023 we incurred approximately 22.0% of our vessel operating
expenses in currencies other than the U.S. dollar, of which 60.1% was denominated in Euros. In addition, we incurred the majority
of our management fees in Euros, and this will continue in the future. In February 2022, one of our subsidiaries issued a non-
amortising unsecured bond in the amount of €100,000,000, which is listed in the Athens Stock Exchange (the “Bond”). The Bond
is guaranteed by us and pays a coupon of 2.95% on a semi-annual basis. It matures in February 2027 and may be redeemed at
our option in part or in full after February 2024, subject to the payment of a premium ranging from 1.5% to 0.5% of the redeemed
amount depending on the timing of the redemption. We have entered into arrangements to counterbalance the currency risk arising
from the Bond redemption for 45% of the outstanding amount, while we have not entered into any arrangements to counterbalance
the currency risk arising from the coupon payments. As of December 31, 2023, all of our secured indebtedness, as well as the
amounts due under the contracts for the acquisition of the seven newbuild vessels currently in our orderbook, were denominated
in U.S. dollars. We have historically entered into shipbuilding contracts and purchase of vessels whereby part of the contract price
was payable in Japanese yen and Singapore dollars. Also, new credit facilities and financing agreements, purchase of vessels or
newbuild contracts may be denominated in or permit conversion into currencies other than the U.S. dollar. The use of different
currencies could lead to fluctuations in our net income due to changes in the value of the U.S. dollar relative to other currencies, in
particular the Euro and the Japanese yen. We have only partially hedged our overall currency exposure, and, as a result, our results
of operations and financial condition, denominated in U.S. dollars, and our ability to pay dividends, could suffer.
Inflation pressures across the world economies and the changes in central bank rates could lead to subpar economic
growth, declining market conditions and eventually contraction for a number of emerging and advanced economies, ham-
per the fragile recovery of world economies and could adversely affect dry-bulk world trade and freight markets, the cost
of our capital, financing, loan and credit facilities and the cost of our overall indebtedness which could have a material
adverse effect on our business, financial condition and results of operations.
The world economy is facing a number of challenges related to geopolitical tensions, which have or may be developed to conflicts
such as the Russian war in Ukraine, the war between Israel and Hamas and tensions between the United States and China in relation
to Taiwan and the South China Sea region, as well as pandemics that have occurred (Covid-19), or may appear in the future. Such
events have led to large scale disruptions including disruptions in the supply chains, energy and commodity markets and subsequent-
ly to a high inflation environment. Global headline inflation is expected to fall from an estimated 6.8% in 2023 (annual average) to
5.8% in 2024 and 4.4% in 2025, as forecasted in the January 2024 World Economic Outlook of the International Monetary Fund.
During 2023, the central banks increased interest rates to combat inflation. The Federal Reserve has increased the federal fund
interest rate by 100 basis points during the last twelve months to a target of 5.25% to 5.50%. The European Central Bank has
raised interest rates by 125 basis points to 4.50% during the last twelve months. It is difficult to predict the future of interest
rates, but changes in interest rates by both central banks could lead to subpar economic growth.
As a result, global economic conditions and global financial markets have been, and continue to be, volatile and certain coun-
tries may face recession and uncertainty surrounding the potential for continued economic growth, which could lead to reduced
demand for transportation of dry-bulk commodities and reduced charter rates. Global growth is projected to fall from an esti-
mated 3% in 2023 to 2.9% in 2024 according to recent forecasts from the International Monetary Fund January 2024 World
Economic Outlook forecast.
Tighter monetary conditions and lower growth or recession as a result of the inflationary environment could potentially affect the
financial and debt stability.We cannot predict how long the current global inflationary conditions and high interest rates will last
or whether central banks may decide to reduce rates in 2024. In addition, the recent developments in Ukraine led to increased
economic uncertainty amidst fears of a more generalized military conflict or further significant inflationary pressures, due to the
increases in fuel prices following the sanctions imposed on Russia the ongoing war between Israel and Hamas and the uncertainty
about the trajectory of the conflict in the Middle East. Persistent industry-wide inflationary pressures may affect the shipping
industry in general and dry-bulk shipping specifically and could adversely affect our business and financial results by reducing our
revenue due to low freight market conditions, increasing the costs of financing, loan and credit facilities, the cost of our operat-
ing expenses including our crew cost and our overall indebtedness, which could have a material adverse effect on our business,
financial condition and results of operations.
Restrictive covenants in our existing credit facilities and financing agreements including our Bond, impose, and any
future credit facilities and financing agreements will impose, financial and other restrictions on us, and any breach of
these covenants could result in the acceleration of our indebtedness and foreclosure on our vessels.
We have substantial indebtedness and as of December 31, 2023, we had $515.9 million outstanding under our credit facilities
and financing agreements.
Our existing credit facilities and financing agreements impose, and any future credit facility and financing agreement will
impose, operating and financial restrictions on us. These restrictions generally limit our ability to, among other things:
~ pay dividends if an event of default has occurred and is continuing or would occur as a result of the payment of such dividend;
~ enter into certain long-term charters without the lenders’ consent;
~ incur additional indebtedness, including through the issuance of guarantees;
~ change the flag, class or management of the vessel mortgaged under such facility or terminate or materially amend the
management agreement relating to such vessel;
~ create liens on their assets;
~ make loans;
~ make investments;
~ make capital expenditures;
~ undergo a change in ownership or control or permit a change in ownership and control of our Managers;
~ sell the vessel mortgaged under such facility; and
~ change our chief executive officer.
Therefore, we may need to seek permission from our lenders in order to engage in some corporate actions. Our lenders’ interests
may be different from ours, and we cannot guarantee that we will be able to obtain our lenders’ permission when needed. This may
limit our ability to pay dividends to our shareholders, finance our future operations or pursue business opportunities.
Certain of our existing credit facilities require our subsidiaries to maintain financial ratios and satisfy financial covenants.
Depending on the credit facility, certain of our subsidiaries are subject to financial ratios and covenants requiring that these
subsidiaries:
~ ensure that the market value of the vessel mortgaged under the applicable credit facility, determined in accordance with the
terms of that facility, does not fall below 105%, 112%, 120% or 135%, as the case may be (the “Minimum Value Covenant”);
~ maintain at all times a minimum cash balance per vessel with the respective lender from $200,000 to $500,000 as the case
may be; and
~ ensure that we comply with certain financial covenants under the guarantees described below.
In addition, under our loan agreements or under guarantees we have entered into with respect to certain of our subsidiaries’
credit facilities including our Bond, we are subject to financial covenants. Depending on the facility, these financial covenants
include the following as of February 16, 2024:
~ our total consolidated liabilities divided by our total consolidated assets (based on the market value of all vessels owned
or leased on a finance lease taking into account their employment, and the book value of all other assets), must not exceed
85% (the “Consolidated Leverage Covenant”);
~ our total consolidated assets (based on the market value of all vessels owned or leased on a finance lease taking into ac-
count their employment, and the book value of all other assets) less our total consolidated liabilities must not be less than
$150 million (the “Net Worth Covenant”);
~ our ratio of its EBITDA over consolidated interest expense must not be less than 2.0:1, on a trailing 12 months’ basis (the
“EBITDA Covenant”);
~ a minimum of 30% or 35%, as the case may be, of our voting and ownership rights shall remain directly or indirectly
beneficially owned by the Hajioannou family for the duration of the relevant credit facilities and in the case of one facil-
ity, Polys Hajioannou is required to beneficially hold a minimum of 20% of the voting and ownership rights (the “Control
Covenant”): and
~ payment of dividends is subject to no event of default having occurred and be continuing or would occur as a result of the
payment of such dividends.
Failure to meet our payment and other obligations or to maintain compliance with the applicable financial covenants could lead
to defaults under our secured credit facilities. Our lenders could then accelerate our indebtedness and foreclose on the vessels in
our fleet securing those credit facilities. The loss of these vessels would have a material adverse effect on our business, financial
condition and results of operations.
The declaration and payment of dividends will always be subject to the discretion of our board of directors and will depend
on a number of factors. Our board of directors may not declare dividends in the future.
In February 2023, we declared and paid a cash dividend of $0.05 per share of Common Stock, and have since declared and paid
quarterly consecutive cash dividends, each of $0.05 per share of Common Stock. The declaration and payment of future dividends,
if any, will always be subject to the discretion of the board of directors of the Company. There is no guarantee that the Company’s
board of directors will determine to issue cash dividends in the future. The timing and amount of any dividends declared will depend
on, among other things: (i) the Company’s earnings, fleet employment profile, financial condition and cash requirements and avail-
able sources of liquidity; (ii) decisions in relation to the Company’s growth, fleet renewal and leverage strategies; (iii) provisions of
Marshall Islands and Liberian law governing the payment of dividends; (iv) restrictive covenants in the Company’s existing and future
debt instruments; and (v) global economic and financial conditions. Therefore, we might not continue paying dividends on our shares
of Common Stock in the future.
There may be a high degree of variability from period to period in the amount of cash, if any, that is available for the payment
of dividends based upon, among other things:
~ the rates we obtain from our charters as well as the rates obtained upon the expiration of our existing charters;
~ the level of our operating costs;
~ the level of our general and administrative costs;
~ the number of unscheduled off-hire days and the timing of, and number of days required for, scheduled drydocking of our ships;
~ vessel acquisitions and related financings;
~ level of indebtedness;
~ restrictions in our loan and credit facilities and in any future debt facilities;
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~ prevailing global and regional economic and political conditions;
~ the effect of governmental regulations and maritime self-regulatory organization standards on the conduct of our business;
~ the amount of cash reserves established by our board of directors; and
~ restrictions under Marshall Islands and Liberian law.
We may incur expenses or liabilities or be subject to other circumstances in the future that reduce or eliminate the amount of cash
that we have available for distribution as dividends, if any. Our growth and fleet renewal strategies contemplate that we will fi-
nance the acquisition of our contracted newbuilds or selective acquisitions of second-hand vessels through a combination of cash
on hand, our operating cash flow and debt financing or equity financing. If financing is not available to us on acceptable terms, our
board of directors may decide to finance or refinance such acquisitions with a greater percentage of cash from operations to the
extent available, which would reduce or even eliminate the amount of cash available for the payment of dividends. We may also
enter into other agreements that will restrict our ability to pay dividends.
Under the terms of certain of our existing credit facilities, we are not permitted to pay dividends if an event of default has occurred
and is continuing or would occur as a result of the payment of such dividend. We expect that any future credit facilities will also
have restrictions on the payment of dividends. In addition, cash dividends on our Common Stock are subject to the priority of divi-
dends on the 804,950 outstanding shares of Series C Preferred Shares and 3,195,050 outstanding shares of Series D Preferred
Shares as of December 31, 2023.
The laws of the Republic of Liberia and of the Republic of the Marshall Islands, where our vessel-owning subsidiaries are incorpo-
rated, generally prohibit the payment of dividends other than from surplus or net profits, or while a company is insolvent or would
be rendered insolvent by the payment of such a dividend. Our subsidiaries may not have sufficient funds, surplus or net profits to
make distributions to us. In addition, under guarantees we have entered into with respect to certain of our subsidiaries’ existing
credit and loan facilities, we are subject to financial and other covenants, which may limit our ability to pay dividends. We also may
not have sufficient surplus or net profits in the future to pay dividends.
The amount of cash we generate from our operations may differ materially from our net income or loss for the period, which will
be affected by non-cash items. We may incur other expenses or liabilities that could reduce or eliminate the cash available for
distribution as dividends. As a result of these and the other factors mentioned above, we may pay dividends during periods when
we record losses and may not pay dividends during periods when we record net income.
We are a holding company and we depend on the ability of our subsidiaries to distribute funds to us in order to make
dividend payments.
We are a holding company and our subsidiaries, which are all wholly-owned by us, conduct all of our operations and own all of our
operating assets. We have no significant assets other than the equity interests in our wholly-owned subsidiaries and cash and
cash equivalents held by us. As a result, our ability to make dividend payments depends on our subsidiaries and their ability to
distribute funds to us. The ability of a subsidiary to make these distributions could be affected by a claim or other action by a third
party, including a creditor, and the laws of the Republic of Liberia, the Republic of the Marshall Islands where our vessel-owning
subsidiaries are incorporated, and of the Republic of Cyprus, where one of our subsidiaries, the holding company of four of our
vessel-owning subsidiaries, is incorporated, which regulate the payment of dividends by companies. If we are unable to obtain
funds from our subsidiaries, our board of directors may exercise its discretion not to declare or pay dividends.
We depend on our Managers to operate our business and our business could be harmed if our Managers fail to perform
their services satisfactorily.
Pursuant to our management agreements with our Managers (the “Management Agreements”), our Managers provide us with
technical, administrative and commercial services (including vessel maintenance, crewing, purchasing, shipyard supervision, in-
surance, assistance with regulatory compliance, financial services and office space) and our executive officers. Our operational
success depends significantly upon our Managers’ satisfactory performance of these services. Our business would be harmed
if our Managers failed to perform these services satisfactorily. In addition, if either of the Management Agreements were to be
terminated, expire or if their terms were to be altered, our business could be adversely affected, as we may not be able to im-
mediately replace such services, and even if replacement services were immediately available, the terms offered could be less
favorable than those under our Management Agreements.
Our ability to compete for and enter into charters and to expand our relationships with our existing charterers will depend
largely on our relationship with our Managers and their reputation and relationships in the shipping industry. If our Managers
suffer material damage to their reputation or relationships, it may harm our ability to:
~ renew existing charters upon their expiration;
~ obtain new charters;
~ successfully interact with shipyards during periods of shipyard construction constraints;
~ obtain financing on commercially acceptable terms;
~ maintain satisfactory relationships with our charterers and suppliers; and
~ successfully execute our business strategies.
If our ability to do any of the things described above is impaired, it could have a material adverse effect on our business, financial
condition and results of operations.
Although we may have rights against our Managers if they default on their obligations to us, investors in us will have no recourse
against our Managers.
Our Managers are permitted to provide certain management services to affiliates and third parties under the specific restric-
tions of our Management Agreements. Although our Managers are required to provide preferential treatment to our vessels
with respect to chartering arrangements under the Management Agreements, our Managers’ time and attention may be di-
verted from the management of our vessels in such circumstances. Further, we will need to seek approval from our lenders to
change our Managers.
Management fees are payable to our Managers regardless of our profitability, which could have a material adverse effect
on our business, financial condition and results of operations.
Pursuant to our Management Agreements, we pay our Managers a daily ship management fee of €875 per vessel and Safe
Bulkers Management Monaco an annual ship management fee of €3.5 million for providing commercial, technical and administra-
tive services (see the section entitled “Item 5. Operating and Financial Review and Prospects - A. Operating Results - General and
Administrative Expenses” for more information). In addition, we pay our Managers certain commissions and fees with respect
to vessel purchases, sales and newbuilds. The management fees do not cover expenses such as voyage expenses, vessel oper-
ating expenses, maintenance expenses, crewing costs, insurance premiums, commissions and certain company administration
expenses such as directors’ and officers’ liability insurance, legal and accounting fees and other similar company administration
expenses, which are reimbursed or paid by us. The management fees are payable whether or not our vessels are employed, and
regardless of our profitability, and we have no ability to require our Managers to reduce the management fees if our profitability
decreases, which could have a material adverse effect on our business, financial condition and results of operations. The latest
expiration date of the Management Agreements with our Managers is May 2027. We expect to enter into new agreements with
the Managers upon their expiration; however, the terms upon which the new management agreements will be entered into are
unknown at this time and may be less favorable to the Company than those currently in place.
All of our Managers are privately held companies, and there is little or no publicly available information about them; an in-
vestor could have little advance warning of problems affecting our Managers that could have a material adverse effect on us.
The ability of our Managers to continue providing services for our benefit will depend in part on their own financial strength.
Circumstances beyond our control could impair our Managers’ financial strength. Because our Managers are privately held, it is
unlikely that information about their financial strength would become public or available to us prior to any default by our Manag-
ers under the Management Agreements. As a result, we may, and our investors might, have little advance warning of problems
that affect our Managers, even though those problems could have a material adverse effect on us
Our chief executive officer also controls our Managers, which could create conflicts of interest between us and our Managers.
Our chief executive officer, Polys Hajioannou, controls both of our Managers. Polys Hajioannou, directly and through entities
controlled by him, owns approximately 43.35% of our outstanding Common Stock as of February 16, 2024 (see “Item 7. Major
Shareholders and Related Party Transactions—A. Major Shareholders” for more information). These relationships could create
conflicts of interest between us, on the one hand, and our Managers, on the other hand. These conflicts may arise in connection
with the chartering, purchase, sale and operation of the vessels in our fleet versus vessels owned or chartered-in by other compa-
nies affiliated with our Managers or our chief executive officer. To the extent we elect not to exercise our right of first refusal with
respect to any drybulk vessel that may be acquired by companies affiliated with our chief executive officer, such companies could
acquire and operate such drybulk vessels in competition with us. In addition, although under our Management Agreements our
Managers will be required to first provide us any chartering opportunities in the drybulk sector, our Managers are not prohibited
from giving preferential treatment in other areas of its management to vessels that are beneficially owned by related parties. In
addition, under our restrictive covenant arrangements with Mr. Hajioannou and certain entities affiliated with him, he and such
entities may own, operate or finance a maximum of eight drybulk vessels on the water at any one time or enter into an unlimited
number of contracts with shipyards for newbuild drybulk vessels as part of his estate or family planning. Any such drybulk vessels
are not required to be managed by either of our Managers, and Mr. Hajioannou and his related entities are not required to first
provide chartering opportunities to us with respect to such vessels. Additionally, our restrictive covenant arrangements permit
Mr. Hajioannou to acquire up to a 35% ownership stake in any Minority Invested Business (as defined below) developed from
a permitted acquisition, subject to certain requirements, including a commitment that, unless approved by the majority of our
independent directors, no drybulk vessels owned by such Minority Invested Business will be managed by either of our Managers
or any other person or entity in which Mr. Hajioannou has an ownership interest. These conflicts of interest may have an adverse
effect on our business, financial condition and results of operations.
While we adhere to high standards of evaluating related party transactions, agreements between us and other affiliated
entities may be challenged as less favorable than agreements that we could obtain from unaffiliated third parties.
We have entered into various transactions with Mr. Hajioannou, our Chairman and Chief Executive Officer, and entities controlled
by and/or affiliated with Mr. Hajioannou. For example, in 2017, we sold one drybulk vessel to an entity owned by Mr. Hajioannou.
While we believe this transaction was properly evaluated and approved by an independent special committee of our board of direc-
tors, certain terms related to the transaction, including price, may be challenged to be on terms that are less favorable to us than
terms that would have otherwise been agreed upon with unaffiliated third-parties. Future transactions with Mr. Hajioannou and
entities controlled by and/or affiliated with Mr. Hajioannou may undergo scrutiny by our shareholders, the media or others and
result in a challenge of the terms associated with any such transaction.
Our business depends upon certain employees who may not necessarily continue to work for us; if such employees were
no longer to be affiliated with us, our business, financial condition and results of operation could suffer.
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Our future success depends, to a significant extent, upon our chief executive officer, Polys Hajioannou, and certain other members
of our senior management and of our Managers. Polys Hajioannou has substantial experience in the drybulk shipping industry and
for over 30 years has worked with us, our Managers and their predecessor. He and other members of our senior management
and of our Managers manage our business and their performance is crucial to the execution of our business strategies and to the
growth and development of our business. If these individuals were no longer to be affiliated with us or our Managers, or if we were
to otherwise cease to receive advisory services from them, we may be unable to recruit other employees with equivalent talent
and experience, and our business and financial condition could suffer. We do not maintain, and do not intend to maintain, “key
man” life insurance on any of our executive officers.
The provisions in our restrictive covenant arrangements with our chief executive officer and certain entities affiliated
with him restricting their ability to compete with us, like restrictive covenants generally, may not be enforceable.
Our chief executive officer, Polys Hajioannou, and certain entities affiliated with him have entered into restrictive covenant agree-
ments with us under which they are precluded from competing with us during either (i) with respect to Polys Hajioannou, the term
of his service with us as executive and director and for one year thereafter, or (ii) with respect to entities affiliated with Polys
Hajioannou, during the term of the Management Agreements and for one year following the termination of our Management
Agreements, in each case subject to certain exceptions. Courts generally do not favor the enforcement of such restrictions, par-
ticularly when they involve individuals and could be construed as infringing on such individuals’ ability to be employed or to earn
a livelihood. Our ability to enforce these restrictions, should it ever become necessary, will depend upon the circumstances that
exist at the time enforcement is sought. A court may not enforce the restrictions as written by way of an injunction and we may
not necessarily be able to establish a case for damages as a result of a violation of the restrictive covenants.
Our vessels may call on ports located in Iran and Syria, which are identified by the United States government as state
sponsors of terrorism and are subject to United States economic sanctions, which could be viewed negatively by investors
and adversely affect the trading price of our Common Stock and Preferred Shares.
From time to time, vessels in our fleet have called and/or may call on ports located in countries identified by the United States
government as state sponsors of terrorism and subject to United States economic sanctions. From January 1, 2020 through
December 31, 2020, vessels in our fleet did not make any calls on ports in Iran and Syria out of a total of 809 calls made on
worldwide ports. From January 1, 2021 through December 31, 2021, vessels in our fleet did not make any calls on ports in Iran
and Syria out of a total of 680 calls made on worldwide ports. From January 1, 2022 through December 31, 2022, no vessels
in our fleet made any calls on ports in Iran and Syria out of a total of 690 calls made on worldwide ports. From January 1, 2023
through December 31, 2023, no vessels in our fleet made any calls on ports in Iran and Syria out of a total of 809 calls made
on worldwide ports. Iran and Syria are identified by the United States government as state sponsors of terrorism. Although these
designations and controls do not prevent our vessels from making calls on ports in these countries, potential investors could view
such port calls negatively, which could adversely affect our reputation and the market for our Common Stock. Investor perception
of the value of our Common Stock may be adversely affected by the consequences of war, the effects of terrorism, civil unrest and
governmental actions in these and surrounding countries.
Our policy is for our vessels to avoid making calls on ports in Iran and Syria unless, in the case of Iran, the charterer represents
to us that the cargo is not in contravention with any E.U., U.S. or United Nation sanctions and the export of such cargo has been
authorized by the Office of Foreign Assets Control of the U.S. Department of the Treasury.
If our vessels call on ports located in countries that are subject to sanctions and embargoes imposed by the U.S. or other governments,
it could adversely affect our reputation and the market for our shares. The U.S. government and other authorities have made certain
countries subject to certain sanctions and embargoes or have identified countries or other authorities as state sponsors of terrorism.
From time to time, on charterers’ instructions, our vessels may call on ports located in such countries. Sanctions and embargo laws and
regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same activities, and such
sanctions and embargo laws and regulations may be amended or strengthened over time.In addition, charterers and other parties that
we have previously entered into contracts with regarding our vessels may be affiliated with persons or entities that are now or may
become the subject of sanctions imposed by the U.S. government, the E.U. and/or other international bodies. If we determine that such
sanctions require us to terminate existing contracts or if we are found to be in violation of such sanctions, we may suffer reputational
harm and our results of operations may be adversely affected. Although we believe that we have been in compliance with all applicable
sanctions and embargo laws and regulations, and intend to maintain such compliance, there can be no assurance that we will be in
compliance in the future, particularly as the scope of certain laws may be unclear and may be subject to changing interpretation. Any
such violation could result in fines, penalties or other sanctions that could severely impact our ability to access U.S. capital markets
and conduct our business and could result in some investors deciding, or being required, to divest their interest, or not to invest, in our
securities. For example, certain institutional investors may have investment policies or restrictions that prevent them from holding se-
curities of companies that have contracts with countries identified by the U.S. government as state sponsors of terrorism. Additionally,
some investors may decide to divest their interest, or not to invest, in our company simply because we do business with companies
that do business in sanctioned countries. The determination by these investors not to invest in, or to divest, our shares may adversely
affect the price at which our shares trade. Moreover, our charterers may violate applicable sanctions and embargo laws and regula-
tions as a result of actions that do not involve us or our vessels, and those violations could in turn result in liability for the Company or
negatively affect our reputation. In addition, our reputation and the market for our securities may be adversely affected if we engage
in certain other activities, such as entering into charters with individuals or entities in countries subject to U.S. sanctions and embargo
laws that are not controlled by the governments of those countries, or engaging in operations associated with those countries pursuant
to contracts with third-parties that are unrelated to those countries or entities controlled by their governments.
See “Item 4. Information on the Company—B. Business Overview—Disclosure of activities pursuant to Section 13(r) of the U.S.
Securities Exchange Act of 1934” for more information.
We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate law;
therefore, you may have more difficulty protecting your interests than shareholders of a U.S. corporation.
Our corporate affairs are governed by our articles of incorporation, our bylaws and by the Marshall Islands Business Corporations
Act (“BCA”). The provisions of the BCA resemble provisions of the corporation laws of a number of states in the United States.
However, there have been few judicial cases in the Republic of the Marshall Islands interpreting the BCA. The rights and fiduciary
responsibilities of directors under the laws of the Republic of the Marshall Islands are not as clearly established as the rights and
fiduciary responsibilities of directors under statutes or judicial precedent in existence in certain United States jurisdictions. The
rights of shareholders of companies incorporated in the Republic of the Marshall Islands may differ from the rights of shareholders
of companies incorporated in the United States. While the BCA provides that it is to be interpreted according to the non-statutory
laws of the State of Delaware and other states with substantially similar legislative provisions, there have been few, if any, court
cases interpreting the BCA in the Republic of the Marshall Islands and we cannot predict whether Marshall Islands courts would
reach the same conclusions as United States courts. Thus, you may have more difficulty in protecting your interests in the face
of actions by our management, directors or controlling shareholders than would shareholders of a corporation incorporated in a
United States jurisdiction which has developed a more substantial body of case law in the corporate law area.
It may be difficult to serve us with legal process or enforce judgments against us, our directors or our management.
We are incorporated under the laws of the Republic of the Marshall Islands, and our Managers’ business is operated primarily from
their offices in Limassol, Cyprus, Athens, Greece and Monaco. In addition, a majority of our directors and officers are or will be non-
residents of the United States, and all of our assets and a substantial portion of the assets of these non-residents are located out-
side the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals
in the United States if you believe that your rights have been infringed under the securities laws or otherwise. You may also have
difficulty enforcing, both within and outside of the United States, judgments you may obtain in the United States courts against us
or these persons in any action, including actions based upon the civil liability provisions of United States federal or state securities
laws. There is also substantial doubt that the courts of the Republic of the Marshall Islands, the Republic of Cyprus or Greece would
enter judgments in original actions brought in those courts predicated on United States federal or state securities laws.
We may be subject to lawsuits for damages and penalties.
The nature of our business exposes us to the risk of lawsuits for damages or penalties relating to, among other things, personal
injury, property casualty and environmental contamination. From time to time, we may be subject to legal proceedings and claims
in the ordinary course of business, principally personal injury and property casualty claims. We expect that these claims would be
covered by insurance, subject to customary deductibles. However, such claims, even if lacking merit, could result in the expendi-
ture of significant financial and managerial resources.
The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.
Under some jurisdictions, vessels used for the conveyance of illegal drugs could subject the vessels to forfeiture to the government of
such jurisdiction. Vessels in our fleet may call in ports in South America and other areas where smugglers, during vessel operations,
and without our knowledge, may attempt to hide drugs and other contraband on those vessels, with or without the knowledge of crew
members. To the extent our vessels are found with contraband, whether inside or attached to the hull of our vessel and whether with
or without the knowledge of any member of the vessels’ crew, we may face governmental or other regulatory claims or penalties
which could have an adverse effect on our reputational, our business, results of operations, cash flows and financial condition.
Regulatory and legal risks as a result of our global operations could have a material adverse effect on our business,
results of operations and financial conditions.
Our global operations increase both the number and the level of complexity of U.S. or foreign laws and regulations applicable
to us. These laws and regulations include international labor laws; U.S. laws such as the FCPA and other laws and regulations
established by the Office of Foreign Assets Control; local laws such as the U.K. Bribery Act 2010; data privacy requirements like
the European General Data Protection Regulation, enforceable as of May 25, 2018; and the E.U.-U.S. Privacy Shield Framework,
adopted by the European Commission on July 12, 2016. We may inadvertently breach some provisions of those laws and regu-
lations which could result in cease of business activities, criminal sanctions against us, our officers or our employees, fines and
materially damage our reputation. In addition, detecting, investigating and resolving such cases of actual or alleged violations may
be expensive and time consuming for our senior management.
Risks Relating to Our Common Stock and Preferred Shares
Polys Hajioannou, the largest shareholder of the Company, is able to significantly influence the outcome of matters on
which our shareholders are entitled to vote and its interests may be different from yours.
As of February 16, 2024, Polys Hajioannou owned or controlled approximately 43.35%, of our outstanding Common Stock (see
“Item 7. Major Shareholders and Related Party Transactions – A. Major Shareholders” for more information). Polys Hajioannou
is the largest shareholder of the Company and is able to significantly influence the outcome of matters on which our sharehold-
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ers are entitled to vote, including the election of our entire board of directors and other significant corporate actions including
mergers, sales of assets or other similar transactions. The interests of Polys Hajioannou may be different from yours.
Our status as a foreign private issuer within the rules promulgated under the Exchange Act exempts us from certain
requirements of the SEC and NYSE.
We are a “foreign private issuer” within the rules promulgated under the Exchange Act. Under the NYSE listing rules, a foreign private
issuer may elect to comply with the practice of its home country and to not comply with certain NYSE corporate governance require-
ments, including the requirements that (a) a majority of the board of directors consist of independent directors, (b) a nominating and
corporate governance committee be established that is composed entirely of independent directors and has a written charter addressing
the committee’s purpose and responsibilities, (c) a compensation committee be established that is composed entirely of independent
directors and has a written charter addressing the committee’s purpose and responsibilities, (d) an annual performance evaluation of
the nominating and corporate governance and compensation committees be undertaken and (e) the obligation to obtain shareholder
approval in connection with certain issuances of authorized stock or the approval of, and material revisions to, equity compensation
plans. Moreover, we are not required to comply with certain requirements of the SEC that domestic issuers are required to comply with,
including (a) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on
Form 8-K, (b) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security
registered under the Exchange Act, (c) the provisions of Regulation FD aimed at preventing issuers from making selective disclosures of
material information and (d) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading
activities and establishing insider liability for profits realized from any “short-swing” trading transaction (i.e., a purchase and sale, or sale
and purchase, of the issuer’s equity securities within less than six months). Therefore, you will not have the same protections afforded to
shareholders of companies that are subject to all NYSE corporate governance requirements or SEC requirements.
For example, in reliance on the foreign private issuer exemption to the NYSE listing rules, a majority of our board of directors
may not consist of independent directors; our board’s approach may therefore be different from that of a board with a majority of
independent directors, and as a result, the management oversight of our Company may be more limited than if we were subject
to the NYSE listing rules. Because of these exemptions, investors are not afforded the same protections or information generally
available to investors holding shares in public companies organized in the U.S.
See “Item 16G. Corporate Governance” for more information.
Future sales of our Common Stock could cause the market price of our Common Stock to decline and our existing share-
holders may experience significant dilution.
We may issue additional shares of our Common Stock in the future and our shareholders may elect to sell large numbers of shares
held by them from time to time, subject to applicable restrictions and limitations under Rule144 of the Securities Act.
In April 2011, we issued and sold 5,000,000 shares of Common Stock in a public offering. The gross proceeds of the April 2011
public offering were approximately $42.0 million. In March 2012, we issued and sold 5,750,000 shares of Common Stock in a
public offering. The gross proceeds of the March 2012 public offering were approximately $37.4 million. In November 2013, we
issued and sold 5,750,000 shares of Common Stock in a public offering. Concurrently with that public offering, we issued and
sold 1,000,000 shares of Common Stock to an entity associated with our chief executive officer, Polys Hajioannou, in a private
placement. The gross proceeds of the November 2013 public offering and private placement were approximately $50.2 million.
In December 2016, we issued and sold 15,640,000 shares of Common Stock in a public offering, in which an entity associated
with Polys Hajioannou purchased 2,727,272 shares of Common Stock. The gross proceeds of the December 2016 public offering
were approximately $17.2 million. In April 2017, we completed an exchange offer (the “Exchange Offer”) for our Series B Cumu-
lative Redeemable Perpetual Preferred Shares, par value $0.01 per share, liquidation preference $25.00 per share (“Series B
Preferred Shares”), in which we issued an additional 2,212,508 shares of Common Stock to holders of Series B Preferred Shares
who tendered such preferred shares in the Exchange Offer.
In November 2018, one of our subsidiaries entered into a memorandum of agreement with an unaffiliated seller to acquire a
Japanese-built, dry-bulk Post-Panamax class resale newbuild vessel. We had the option to finance up to 50% of the purchase price
of the vessel through the issuance of our Common Stock to the seller. In November 2018, November 2019 and April 2020, we
exercised our option and issued 1,441,048, 3,963,964 and 2,951,699 shares of our Common Stock respectively to the seller, to
finance the first installment of $3.3 million, the second installment of $6.6 million and part of the third installment of $3.3 million,
respectively of the purchase price of the vessel.
Sales of a substantial number of shares of our Common Stock in the public market, or the perception that these sales could occur,
may depress the market price for our Common Stock. These sales could also impair our ability to raise additional capital through
the sale of our equity securities in the future.
Our existing shareholders may also experience significant dilution in the future as a result of any future offering.
We also entered into a registration rights agreement in connection with our initial public offering with Vorini Holdings Inc., one
of our principal shareholders, pursuant to which we have granted it and certain of its transferees the right, under certain circum-
stances and subject to certain restrictions, to require us to register under the Securities Act of 1933, as amended (the “Securities
Act”), shares of our Common Stock held by them. Under the registration rights agreement, Vorini Holdings Inc. and certain of its
transferees have the right to request us to register the sale of shares held by them on their behalf and may require us to make avail-
able shelf registration statements permitting sales of shares into the market from time to time over an extended period. In addition,
those persons have the ability to exercise certain piggyback registration rights in connection with registered offerings initiated
by us. Registration of such shares under the Securities Act would, except for shares purchased by affiliates, result in such shares
becoming freely tradable without restriction under the Securities Act immediately upon the effectiveness of such registration.
The market price of our Common Stock may be adversely affected by sales of substantial amounts of our Common Stock
Common Stock sale offerings.
In August 2020, the Company filed a prospectus supplement with the SEC and entered into a sales agreement (the “Sales Agree-
ment”) with a sales agent (the “Sales Agent”), under which we might offer and sell shares of Common Stock from time to time up to
aggregate net offering proceeds of $23.5 million through an at the market offering program (the “ATM Program”). In May 2021, the
Company filed a supplement to the August 2020 prospectus supplement and increased its potential net offering proceeds under the
ATM Program to $100.0 million. As of December 31, 2021, the Company had offered to sell and had sold 19,417,280 shares of
common stock and had received aggregate net offering proceeds of $71.5 million under the ATM Program. The Company had not of-
fered to sell and has not sold any additional common shares under the ATM Program in 2022 and 2023. The ATM Program was ter-
minated by the Company on May 8, 2023. Following the termination of our ATM Program, the Company does not currently have an
active ATM program, however, our board of directors could adopt an ATM Program in the future dependent upon market conditions.
Subject to certain limitations in a typical sales agreement for an ATM program and compliance with applicable law, we would have the
discretion to deliver notices to the sales agent at any time throughout the term of the sales agreement. The number of shares that would
be sold by the sales agent after delivering a notice would fluctuate based on the market price of the shares of Common Stock during
the sales period and limits we set with the sales agent. Because the sales of the shares offered hereby would be made directly into the
market or in negotiated transactions, the prices which we sell these shares will vary and these variations may be significant. Purchasers
of the shares we sell, as well as our existing shareholders, would experience significant dilution if we sell shares at prices significantly
below the price at which they invested. Furthermore, all of our shares of Common Stock sold in the potential offering would be freely
tradable without restriction or further registration under the Securities Act. As a result of this potential offering, a substantial number of
our shares of Common Stock may be sold in the public market or may cause the perception that these sales could occur, either of, which
may cause the market price of our Common Stock to decline. If the board of directors did approve a new ATM Program and the Company
issued new shares under such program, this could make it more difficult for you to sell your shares of Common Stock at a time and price
that you deem appropriate and could impair our ability to raise capital through the sale of additional equity securities.
We may adopt additional share repurchase programs which may affect the market for our Common Stock and Preferred
Shares, including affecting our share price or increasing share price volatility.
The Company may, from time to time, repurchase Common Stock or Preferred Shares in the open market, in privately negotiated trans-
actions or otherwise, depending upon several factors, including market and business conditions, the trading price of our Common Stock
and other investment opportunities. The repurchase programs may be limited, suspended or discontinued at any time without prior
notice. In June 2019, we announced a share repurchase program under which we could, from time to time, purchase up to 5,000,000
shares of Common Stock in the aggregate on the open market. In March 2020, we expanded such share repurchase program to pro-
vide for the repurchase of an additional 1,500,000 shares of Common Stock on the open market. In March 2020, we announced a
preferred share repurchase program under which we could, from time to time, purchase up to 100,000 shares of each of our Series
C Preferred Shares and Series D Preferred Shares on the open market. Additionally, in March 2022, we issued a notice of redemption
of 1,492,554 of the outstanding Series C Preferred Shares. The redemption was completed on April 29, 2022, at a redemption price
of $25.00 per Series C Preferred Share in the amount of $37.3 million plus all accumulated and unpaid dividends to, but excluding,
the redemption date, of $0.7 million. Following the redemption, there were 804,950 Series C Preferred Shares outstanding, as of
December 31, 2022 and as of December 31, 2023. In June 2022, we authorized a program under which we could, from time to time,
purchase up to 5,000,000 shares of Common Stock in the aggregate on the open market. In March 2023, we expanded such share
repurchase program to provide for the repurchase of an additional 5,000,000 shares of Common Stock on the open market, up to a
total of 10,000,000 shares of Common Stock, all of which had been repurchased and canceled. In May 2023, we authorized a program
under which we could, from time to time, purchase up to 5,000,000 shares of Common Stock in the aggregate on the open market. In
July 2023, the Company terminated the program, having repurchased and canceled an amount of 139,891 shares of Common Stock,
In November 2023, we authorized an additional repurchase program for up to 5,000,000 shares of Common Stock. As of February 16,
2024, the Company had not repurchased any shares of Common Stock under the aforementioned program.
There is no guarantee of a continuing public market for you to resell our common or preferred stock.
Our Common Stock and Preferred Shares trade on the NYSE. We cannot assure you that an active and liquid public market for
our Common Stock or Preferred Shares will continue, which would likely have a negative effect on the price of our Common
Stock or Preferred Shares, as applicable, and impair your ability to sell or purchase our Common Stock or Preferred Shares,
as applicable, when you wish to do so.
If our Common Stock falls below the continued listing standard of $1.00 per share or otherwise fails to satisfy any of the
NYSE continued listing requirements, and if we are unable to cure such deficiency during any subsequent cure period, our
Common Stock could be delisted from the NYSE. If our Common Stock ultimately were to be delisted for any reason, we could
face significant material adverse consequences, including:
~ limited availability of market quotations for our Common Stock;
~ a limited amount of news and analyst coverage for us;
~ a decreased ability for us to issue additional securities or obtain additional financing in the future;
~ limited liquidity for our shareholders due to thin trading; and
~ loss of preferential tax rates for dividends received by certain non-corporate United States holders, loss of “mark-to-
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market” election by United States holders in the event we are treated as a ‘’passive foreign investment company’’, and loss
of our tax exemption under Section 883 of the Internal Revenue Code of 1986, as amended (the “Code”).
We have adopted a shareholders rights plan which could make it more difficult for a third-party to acquire us while the
plan remains in effect.
We have in effect a shareholders rights plan that is intended to enable all shareholders to realize the long-term value of their invest-
ment in the Company and to protect against any person or group from gaining control of the Company through coercive or otherwise
unfair takeover tactics. The shareholders rights plan is not intended to deter offers that are fair and otherwise in the best interests
of the Company’s shareholders. In connection with the Company’ s adoption of the shareholders rights plan, the Company declared a
dividend of one preferred share purchase right (a “Right”) for each outstanding share of our Common Stock. The Rights will be exer-
cisable on the earlier of (1) the tenth day after the public announcement that a person or group acquires ownership of 10% or more
of the Company’s Common Stock without the approval of the board of directors or (2) the tenth business day (or such later date as
determined by the board of directors) after a person or group announces a tender or exchange offer which would result in that person
or group holding 10% or more of the Company’s Common Stock. Polys Hajioannou, the Company’s Chairman and chief executive
officer, and his brother Nicolaos Hadjioannou are excluded persons for purposes of the shareholders rights plan and shares of our
Common Stock held by Mr. Hajioannou or Mr. Hadjioannou and entities controlled by and/or affiliated or associated with Mr. Hajioan-
nou or Mr. Hadjioannou or members or their respective families are not subject to the restrictions of the shareholders rights plan.
The Rights also become exercisable if a person or group that already beneficially owns 10% or more of our Common Stock (other
than one or more of the excluded persons described above) acquires any additional shares of our Common Stock without the ap-
proval of the board of directors. If the Rights become exercisable, all Rights holders (other than the person or group triggering the
Rights) will be entitled to acquire certain of our securities at a substantial discount. The Rights may substantially dilute the stock
ownership of a person or group attempting to take over our company without the approval of the board of directors, and the rights
plan could make it more difficult for a third-party to acquire our company or a significant percentage of our outstanding shares of
Common Stock, without first negotiating with the board of directors.
Anti-takeover provisions in our organizational documents and Management Agreements could make it difficult for our
shareholders to replace or remove our current board of directors and together with our adoption of a shareholders rights
plan could have the effect of discouraging, delaying or preventing a merger or acquisition, which could adversely affect
the market price of the shares of our Common Stock.
Several provisions of our articles of incorporation and bylaws could make it difficult for our shareholders to change the composition
of our board of directors in any one year, preventing them from changing the composition of our management. In addition, the same
provisions may discourage, delay or prevent a merger or acquisition that shareholders may consider favorable. These provisions:
~ authorize our board of directors to issue “blank check” preferred stock without shareholder approval;
~ provide for a classified board of directors with staggered, three-year terms;
~ prohibit cumulative voting in the election of directors;
~ authorize the removal of directors only for cause;
~ prohibit shareholder action by written consent unless the written consent is signed by all shareholders entitled to vote on
the action;
~ establish advance notice requirements for nominations for election to our board of directors or for proposing matters that
can be acted on by shareholders at shareholder meetings; and
~ provide that special meetings of our shareholders may only be called by the chairman of our board of directors, chief execu-
tive officer or a majority of our board of directors.
Pursuant to our shareholders rights plan any person that attempts to acquire us without the approval of our board of directors
may have their shareholdings substantially diluted.
Each Manager may terminate the applicable Management Agreement prior to the end of its term if there is a change in directors
after which at least one of the members of our board of directors is not a continuing director. “Continuing directors” means, as of
any date of determination, any member of our board of directors who was (a) a member of our board of directors on May 29, 2018
or (b) nominated for election or elected to our board of directors with the approval of a majority of the directors then in office who
were either directors on May 29, 2018 or whose nomination or election was previously so approved. In the event that either Man-
agement Agreement is so terminated, the Company shall pay to Safe Bulkers Management an amount in cash equal to the Man-
agement Fees paid or payable to either Manager, in the aggregate, during the 36 months preceding the applicable termination.
These anti-takeover provisions, including the provisions of our shareholders rights plan, could substantially impede the ability
of public shareholders to benefit from a change in control and, as a result, may adversely affect the market price of our Common
Stock and your ability to realize any potential change of control premium.
The amount of cash we have available for dividends on or to redeem our Preferred Shares will not depend solely on our
profitability.
The actual amount of cash we will have available for dividends or to redeem our Preferred Shares will depend on many factors,
including the following:
~ changes in our operating cash flow, capital expenditure requirements, working capital requirements and other cash needs;
~ restrictions under our existing or future credit facilities or any future debt securities, including existing restrictions under
our existing credit facilities on our ability to pay dividends if an event of default has occurred and is continuing or if the
payment of the dividend would result in an event of default and restrictions on our ability to redeem securities;
~ the amount of any cash reserves established by our board of directors; and
~ restrictions under the laws of the Republic of the Marshall Islands, which generally prohibits the payment of dividends other
than from surplus (retained earnings and the excess of consideration received for the sale of shares above the par value of
the shares) or while a company is insolvent or would be rendered insolvent by the payment of such a dividend.
The amount of cash we generate from our operations may differ materially from our net income or loss for the period, which will be
affected by non-cash items, and our board of directors in its discretion may elect not to declare any dividends. As a result of these
and the other factors mentioned above, we may pay dividends during periods when we record losses and may not pay dividends dur-
ing periods when we record net income.
The laws of the Republic of Liberia and of the Republic of the Marshall Islands, where our vessel-owning subsidiaries are incorpo-
rated, generally prohibit the payment of dividends other than from surplus or net profits, or while a company is insolvent or would be
rendered insolvent by the payment of such a dividend. Our subsidiaries may not have sufficient funds, surplus or net profits to make
distributions to us. In addition, under guarantees we have entered into with respect to certain of our subsidiaries’ existing credit fa-
cilities, we are subject to financial and other covenants, which may limit our ability to pay dividends and redeem the Preferred Shares.
These and future agreements may limit our ability to pay dividends on and to redeem the Preferred Shares. We also may not have
sufficient surplus or net profits in the future to pay dividends.
Our Preferred Shares represent perpetual equity interests, they are subordinate to our debt and your interests could be
diluted by the issuance of additional preferred shares, including additional Preferred Shares and by other transactions.
The Preferred Shares represent perpetual equity interests in us and, unlike our indebtedness, will not give rise to a claim for payment
of a principal amount at a particular date. As a result, holders of the Preferred Shares may be required to bear the financial risks of
an investment in the Preferred Shares for an indefinite period of time. Our Preferred Shares are subordinate to all of our existing and
future indebtedness and to any other senior securities we may issue in the future with respect to assets available to satisfy claims
against us. Each series of our Preferred Shares rank pari passu with one another and any class or series of capital stock established
after the original issue date of such preferred shares that is not expressly subordinated or senior to such preferred shares as to
the payment of dividends and amounts payable upon liquidation, dissolution or winding up. As of December 31, 2023, we had ag-
gregate debt outstanding of $515.9 million, of which $27.2 million payable within the next 12 months. Our existing indebtedness
restricts, and our future indebtedness may include restrictions on, our ability to pay dividends on or redeem preferred shares. In
March 2022, we issued a notice of redemption of 1,492,554 of the outstanding Series C Preferred Shares. The redemption was
completed on April 29, 2022, at a redemption price of $25.00 per Series C Preferred Share in the amount of $37.3 million plus
all accumulated and unpaid dividends to, but excluding, the redemption date, of $0.7 million. Following the redemption, there were
804,950 Series C Preferred Shares outstanding, as of December 31, 2023. Our articles of incorporation currently authorize the is-
suance of up to 20,000,000 shares of blank check preferred stock, par value $0.01 per share, of which, as of December 31, 2023,
804,950 shares of Series C Preferred Shares and 3,195,050 shares of Series D Preferred Shares were issued and outstanding. Of
the blank check preferred stock, 1,000,000 shares have been designated Series A Participating Preferred Stock in connection with
our adoption of a shareholders rights plan as described under “Item 10. Additional Information—B. Articles of Incorporation and
Bylaws—Shareholders Rights Plan.” The issuance of additional preferred shares on a parity with or senior to the Preferred Shares
would dilute the interests of holders of such shares, and any issuance of preferred shares senior to such preferred shares or of ad-
ditional indebtedness could affect our ability to pay dividends on, redeem or pay the liquidation preference on our Preferred Shares.
The liquidation preference amount on our Preferred Shares is fixed and Preferred shareholders will have no right to re-
ceive any greater payment regardless of the circumstances.
The payment due upon a liquidation to holders of any series of our Preferred Shares is fixed at the redemption preference of
$25.00 per share plus accumulated and unpaid dividends to the date of liquidation. If, in the case of our liquidation, there are re-
maining assets to be distributed after payment of this amount, you will have no right to receive or to participate in these amounts.
Furthermore, if the market price for our Preferred Shares is greater than the liquidation preference, Preferred shareholders will
have no right to receive the market price from us upon our liquidation.
Holders of Preferred Shares have extremely limited voting rights.
The voting rights of holders of Preferred Shares are extremely limited. Our Common Stock is the only class or series of our shares
carrying full voting rights. Holders of Preferred Shares have no voting rights other than the ability (voting together as a class with
all other classes or series of preferred stock upon which like voting rights have been conferred and are exercisable, including all of
the Preferred Shares), subject to certain exceptions, to elect one director if dividends for six quarterly dividend periods (whether
or not consecutive) payable on our Preferred Shares are in arrears and certain other limited protective voting rights.
Our ability to pay dividends on and to redeem our Preferred Shares is limited by the requirements of the laws of the
Republic of the Marshall Islands, the laws of the Republic of Liberia and existing and future agreements.
The laws of the Republic of Liberia and of the Republic of the Marshall Islands, where our vessel-owning subsidiaries are incorpo-
rated, generally prohibit the payment of dividends other than from surplus or net profits, or while a company is insolvent or would
be rendered insolvent by the payment of such a dividend. Our subsidiaries may not have sufficient funds, surplus or net profits
to make distributions to us. In addition, under guarantees we have entered into with respect to certain of our subsidiaries’ exist-
ing credit facilities, we are subject to financial and other covenants, which may limit our ability to pay dividends and redeem the
Preferred Shares. These and future agreements may limit our ability to pay dividends on and to redeem the Preferred Shares. We
also may not have sufficient surplus or net profits in the future to pay dividends.
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Tax Risks
In addition to the following risk factors, you should read “Item 10. Additional Information—E. Tax Considerations—Marshall Is-
lands Tax Considerations,” “Item 10. Additional Information—E. Tax Considerations—Liberian Tax Considerations,” and “Item 10.
Additional Information —E. Tax Considerations—United States Federal Income Tax Considerations” for a more complete discus-
sion of expected material Marshall Islands, Liberian and United States federal income tax consequences of owning and disposing
of our Common Stock and Preferred Shares.
We may earn shipping income that will be subject to United States income tax, thereby reducing our cash available for
distributions to you.
Under United States tax rules, 50% of our gross income attributable to shipping that begins or ends in the United States may be
subject to a 4% United States federal income tax (without allowance for deductions). The amount of this income may fluctuate,
and we may not qualify for any exemption from this United States tax. Many of our charters contain provisions that obligate the
charterers to reimburse us for this 4% United States tax. To the extent we are not reimbursed by our charterers, the 4% United
States tax will decrease our cash that is available for dividends.
For a more complete discussion, see the section entitled “Item 10. Additional Information—Tax Considerations—E. United States
Federal Income Tax Considerations—Taxation of Operating Income in General.”
United States tax authorities could treat us as a “passive foreign investment company,” which could have adverse United
States federal income tax consequences to United States holders.
We are an international company that conducts business throughout the world. Tax laws and regulations are highly complex and
subject to interpretation. A non-United States corporation will be treated as a “passive foreign investment company,” or PFIC, for
United States federal income tax purposes if either (a) at least 75% of its gross income for any taxable year consists of certain
types of “passive income” or (b) at least 50% of the average value of the corporation’s assets produce or are held for the produc-
tion of those types of “passive income.” For purposes of these tests, “passive income” includes dividends, interest, gains from the
sale or exchange of investment property, and rents and royalties other than rents and royalties that are received from unrelated
parties in connection with the active conduct of a trade or business. For purposes of these tests, income derived from the perfor-
mance of services does not constitute “passive income.” United States shareholders of a PFIC are subject to a disadvantageous
United States federal income tax regime with respect to the income derived by the PFIC, the distributions they receive from the
PFIC, and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC. In particular, United States
holders who are individuals would not be eligible for preferential tax rates otherwise applicable to qualified dividends.
Based on our current operations and anticipated future operations, we believe that it is more likely than not that we currently
will not be treated as a PFIC. In this regard, we intend to treat gross income we derive or are deemed to derive from our period
time chartering activities as services income, rather than rental income. Accordingly, we believe that our income from our period
time chartering activities should not constitute “passive income,” and that the assets we own and operate in connection with the
production of that income should not constitute passive assets.
There are legal uncertainties involved in this determination. In Tidewater Inc. v. United States, 565 F.3d 299 (5th Cir. 2009), the United
States Court of Appeals for the Fifth Circuit held that, contrary to the position of the United States Internal Revenue Service, or the “IRS,”
in that case, and for purposes of a different set of rules under the Code, income received under a period time charter of vessels should be
treated as rental income rather than services income. If the reasoning of this case were extended to the PFIC context, the gross income
we derive or are deemed to derive from our period time chartering activities would be treated as rental income, and we would probably
be a PFIC. The IRS has stated that it disagrees with the holding in Tidewater and has specified that income from period time charters
should be treated as services income. However, the IRS’ statement with respect to the Tidewater decision was an administrative action
that cannot be relied upon or otherwise cited as precedent by taxpayers. In light of these authorities, the IRS or a United States court
may not accept the position that we are not a PFIC, and there is a risk that the IRS or a United States court could determine that we are
a PFIC. Moreover, we may constitute a PFIC for a future taxable year if there were to be changes in our assets, income or operations.
If the IRS were to find that we are or have been a PFIC for any taxable year, our United States shareholders would face adverse
United States tax consequences. See “Item 10. Additional Information—E. “Tax Considerations—United States Federal Income
Tax Considerations—United States Federal Income Taxation of United States Holders” for a more comprehensive discussion of the
United States federal income tax consequences to United States shareholders if we are treated as a PFIC
ITEM 4.
INFORMATION ON THE COMPANY
A. History and Development of the Company
Safe Bulkers, Inc. was incorporated in the Republic of the Marshall Islands on December 11, 2007, for the purpose of acquiring
ownership of various subsidiaries that either owned or were scheduled to own vessels. Polys Hajioannou, our chief executive of-
ficer, has a long history of operating and investing in the international shipping industry, including a long history of vessel owner-
ship. Vassos Hajioannou, the late father of Polys Hajioannou, our chief executive officer, first invested in shipping in 1958. Polys
Hajioannou has been actively involved in the industry since 1987, when he joined the predecessor of Safety Management.
Over the past 30 years under the leadership of Polys Hajioannou, we have sold or contracted to sell 28 drybulk vessels during
periods of what we viewed as favorable second-hand market conditions and have contracted to acquire 65 drybulk newbuilds
and 14 drybulk second-hand vessels. Also under his leadership, we have expanded the classes of drybulk vessels in our fleet and
the aggregate carrying capacity of our fleet has grown from 887,900 dwt prior to our initial public offering in May 28, 2008 to
4,719,600 dwt as of February 16, 2024. Information on our capital expenditure requirements are discussed in “Item 5. Operat-
ing and Financial Review and Prospects—B. Liquidity and Capital Resources.” The quality and size of our current fleet, together
with our long-term relationships with several of our charter customers, are, we believe, the results of our long-term strategy of
maintaining a high quality fleet, our broad knowledge of the drybulk industry and our strong management team. In addition to
benefiting from the experience and leadership of Polys Hajioannou, we also benefit from the expertise of our Managers which,
along with their predecessor, have specialized in drybulk shipping since 1965. In June 2008, we completed an initial public offer-
ing of our Common Stock in the U.S. and our Common Stock began trading on the NYSE. Our principal executive office is located
at Apt. D11, Les Acanthes, 6, Avenue des Citronniers MC 98000 Monaco. Our registered address in the Republic of the Marshall
Islands is Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands, MH96960 and tele-
phone numbers are +30 2 111 888 400 and +357 25 887 200. The name of our registered agent at such address is The Trust
Company of the Marshall Islands, Inc.
The SEC maintains an internet site at http://www.sec.gov that contains reports, information statements, and other information
regarding issuers that we file electronically with the SEC.
B. Business Overview
We are an international provider of marine drybulk transportation services, transporting bulk cargoes, particularly coal, grain and
iron ore, along worldwide shipping routes for some of the world’s largest consumers of marine drybulk transportation services.
As of February 16, 2024, we had a fleet of 47 drybulk vessels, one of which is held for sale, with an aggregate carrying capacity
of 4,719,600 dwt.
We employ our vessels on both period time charters and spot time charters, according to our assessment of market conditions,
with some of the world’s largest consumers of marine drybulk transportation services. The vessels we deploy on period time
charters provide us with relatively stable cash flow and high utilization rates, while the vessels we deploy in the spot market
allow us to maintain our flexibility in low charter market conditions. We are focused on owning a modern, well-maintained
fleet with the best designs in the shipping dry-bulk sector, targeting to reduce the environmental impact from our operations.
Over the past several years, we have made publicly available our annual sustainability report, where we present in detail our
environmental, social and governance strategy for the future, as well as the impact of our operations and business on society
and the environment. We believe that integrating ESG at the very heart of our corporate strategy, will enable us to continue to
have access to capital, enjoy existing and future investors’ trust, reduce our fleets’ carbon footprint and remain competitive in
the dry bulk market.
Our ESG Strategy
During previous years, a number of countries and the IMO, have adopted regulatory frameworks to reduce GHG emissions (in-
creased energy efficiency standards for existing vessels and newbuilds, classification of vessels on the basis of annual CO2 emis-
sions, cap and trade regimes, carbon taxes, and incentives or mandates for using alternative fuels with lower carbon footprint
compared to fossil fuels or using renewable energy), due to concerns over the risk of climate change. GHG emissions reduction
measures for achieving 2030 goals, adopted by the IMO, EU and other jurisdictions, may impose operational and financial restric-
tions such as carbon taxes or an emission trading system ETS on the basis of CO2 emissions affecting more the less efficient
vessels, reducing their trade and competitiveness, increasing their environmental compliance costs, imposing additional energy
efficiency investments, or even making such older, less energy efficient vessels obsolete. Investor advocacy groups, certain insti-
tutional investors, investment funds, lenders and other market participants are increasingly focused on ESG practices hindering
access to capital and reallocating capital as a result of their assessment of a company’s ESG practices.
Safe Bulkers, targeting to reduce the environmental impact of our operations, and increase the sustainability of our business over
time, has placed and integrated ESG at the heart of our corporate strategy and has undertaken significant investments with the
purpose of increasing our fleet’s environmental competitiveness and successfully meet society’s expectations as to our proper
role. In light of investors’ increased focus on ESG matters and in response to the GHG environmental regulations, we have as-
sessed the applicability of relevant energy efficiency measures, and decided to pursue a two-fold strategy: i) a comprehensive
fleet renewal program consisting of several newbuild orders with advanced energy efficiency characteristics, the acquisition of
younger second-hand vessels and the sale of older, less efficient vessels at suitable times and ii) an extensive program for envi-
ronmental upgrading of existing vessels in our fleet during their dry-dockings.
As of February 16, 2024, our fleet consisted of 47 vessels, 11 of which are eco-ships built after 2014, with superior energy effi-
ciency characteristics compared to past-2014 designs, and nine vessels built 2022 onwards, compliant with the most recent IMO
GHG Phase 3 - NOx Tier III regulations. In addition, the Company’s outstanding orderbook consists of seven newbuilds compliant
with the IMO GHG Phase 3 - NOx Tier III regulations, including two methanol dual fueled, to be delivered one in 2024, two in 2025,
three in 2026 and one in 2027, and following all scheduled deliveries, reaching 27 vessels with improved energy efficiency char-
acteristics. The aggregate capital expenditure for all sixteen of our newbuilds exceeded $575 million.
As of February 16, 2024 we have contracted to sell one of our older Panamax class vessels, built in 2005, with an estimated forward
delivery to her new owners in April to May 2024. During the last three years and until February 16, 2024, the Company has sold or
contracted to sell twelve vessels with total deadweight of 0.94 million tonnes and of 14.6 years average age with aggregate gross
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sale proceeds of $197.2 million and acquired seven second-hand vessels with total deadweight of 0.97 million tonnes and of 9.2
years average age at an aggregate gross acquisition cost of $187.0 million.
In parallel and as of February 16, 2024, we have completed environmental upgrades on 21 vessels through an extensive vessel
environmental upgrade program which involves application of low friction paints and installation of energy saving device.While we
are investing in newbuilds, relatively young second-hand vessels and environmental upgrades, we continue to monitor technologi-
cal developments in relation to new environmentally friendly alternative marine fuels, which we expect will play an increasingly
important role in the next decade.
As of February 16, 2024, we have installed Scrubbers on 21 of our vessels, including seven of our Capesize class vessels, and have
agreed to install a Scrubber on the last remaining Capesize class vessel, effectively reducing SOx emissions compared to VLSFO
and capitalizing on our Scrubber investments in relation to price differential between VLSFO and HSFO. The total cost of the Scrub-
ber investments will amount to $59.6 million, which we estimate we have already recovered through the additional earnings of the
Scrubber-fitted vessels. As of February 16, 2024, we have retrofitted our entire fleet with BWTS.
On the financing front, during the last three years, we were one of the first shipping companies which secured two sustainability-
linked financings with separate lenders, of $160.0 million and for 11 of our vessels in aggregate, both of which incorporated incen-
tive discount or increase on interest rate, linked to independently verified predetermined emission targets.
Additionally, during 2023, we announced the formation of our environmental, social and governance board committee. The ESG
Committee which consists of six board members, four of whom are independent directors, shall review the Company’s ESG per-
formance and ensure governance oversight by the Board of Directors of the ESG strategy and implementation, consistent with the
priorities outlined and articulated in the Company’s annual sustainability report.
Further to the above, the Company is undertaking various actions in relation to its corporate governance, personnel initiatives and the
societies aiming towards continuously advanced integration. We believe that integrating ESG at the very heart of our corporate strat-
egy will reduce our fleets’ carbon footprint and environmental impact, and in parallel, improve our environmental-based competitive-
ness and social acceptance, allow us to enjoy existing and future investors’ trust and enable us to continue to have access to capital.
Our Fleet, Newbuilds and Employment Profile
As of February 16, 2024, our fleet comprised 47 vessels, one of which is held for sale, of which 10 are Panamax class vessels, 11 are
Kamsarmax class vessels, 18 are Post-Panamax class vessels and 8 are Capesize class vessels, with an aggregate carrying capacity of
4,719,600 dwt and an average age of 9.9 years.
Our orderbook consists of seven environmentally advanced Japanese and Chinese Kamsarmax class newbuild vessels, including two
methanol dual-fueled, with scheduled deliveries one in the remainder of 2024, two in 2025, three in 2026 and one in 2027. All seven
newbuilds are designed to comply with the requirements of the IMO for EEDI Phase 3 and NOx Tier III. Assuming consummation of the
sale of one of our vessels and delivery of the seven contracted newbuild vessels through 2027, our fleet will comprise of 9 Panamax
class vessels, 18 Kamsarmax class vessels, 18 Post-Panamax class vessels and 8 Capesize class vessels, and the aggregate carrying
capacity of our 53 vessels will be 5,216,600 dwt. The majority of vessels in our fleet have sister ships with similar specifications. We
believe using sister ships provides cost savings because it facilitates efficient inventory management and allows for the substitution of
sister ships to fulfill our period time charter obligations.
The table below presents additional information with respect to our drybulk vessel fleet, including our newbuilds, and their deployment as
of February 16, 2024. Certain vessels that are chartered on time charters at a daily gross charter rate linked to the Baltic Panamax Index
(“BPI”),or the Baltic Capesize Index (“BCI”), are shown in the below table with the special notation BPI or BCI, plus or minus the relevant
charter hire adjustments, where applicable. For certain vessels that are equipped with Scrubbers, the benefit from Scrubber operation
(the ‘’Scrubber Benefit’’) is calculated on the basis of the price differential between HSFO and VLSFO for the specific voyage. In cases
where the Scrubber Benefit can be calculated or it is a part of the charter rate, it is included in the referenced charter rate. A special nota-
tion on the table is provided in cases where the Scrubber Benefit is not part of the referenced charter rate and it cannot be calculated.
Vessel Name
Dwt
Year
Built1
Country of
Construction
Charter
Type
Charter
Rate 2
Commis-
sions 3
Charter
Period 4
Sister
Ship5
CURRENT FLEET
Panamax
Maritsa45
76,000
2005
Japan
Period
$16,950
3.75% Apr 2023 - Apr 2024
Paraskevi 2
75,000
2011
Japan
Spot
$13,750
5.00% Jan 2024 - Apr 2024 A
Zoe12
75,000
2013
Japan
Period
16,750
3.75% Feb 2024 - Nov 2024 A
Koulitsa 2
78,100
2013
Japan
Period
$15,000
5.00% Nov 2023 - Apr 2024
Kypros Land12
77,100
2014
Japan
Period14
$13,800
3.75% Aug 2020 - Aug 2022
BPI 82 5TC *
97% - $2,150
3.75% Aug 2022 - Aug 2025
G
Kypros Sea
77,100
2014
Japan
Period14
Kypros Bravery
78,000
2015
Japan
Period13
Kypros Sky30
77,100
2015
Japan
Period13
Kypros Loyalty
78,000
2015
Japan
Period13
$13,800
3.75% Jul 2020 - Jul 2022
BPI 82 5TC *
97% - $2,150
3.75% Jul 2022 - Dec 2023
$10,786
3.75% Jan 2024 - Mar 2024
G
$12,144
3.75% Apr 2024 - Jun 2024
BPI 82 5TC *
97% - $2,150
3.75% Jul 2024 - Jul 2025
$11,750
3.75% Aug 2020 - Aug 2022
BPI 82 5TC *
97% - $2,150
3.75% Aug 2022 - Dec 2023
$12,726
3.75% Jan 2024 - Mar 2024 H
$14,666
3.75% Apr 2024 - Jun 2024
BPI 82 5TC*
97% - $2,150
3.75% Jul 2024 - Aug 2025
$11,750
3.75% Aug 2020 - Aug 2022
BPI 82 5TC *
97% - $2,150
3.75% Aug 2022 - Aug 2025
$11,750
3.75% Jul 2020 - Jul 2022
BPI 82 5TC*
97% - $2,150
3.75% Jul 2022 - Dec 2023
$10,543
3.75% Jan 2024 - Mar 2024
$11,659
3.75% Apr 2024 - Jun 2024
$14,423
3.75% Jul 2024 - Sep 2024
BPI 82 5TC *
97% - $2,150
3.75% Oct 2024 - Jul 2025
$13,800
3.75% Aug 2020 - Aug 2022
BPI 82 5TC*
97% - $2,150
3.75% Aug 2022 - Dec 2023
G
H
H
Kypros Spirit30
78,000
2016
Japan
Period14
$11,465
3.75% Jan 2024 - Mar 2024
$13,696
3.75% Apr 2024 - Jun 2024
BPI 82 5TC*
97% - $2,150
3.75% Jul 2024 - Jul 2025
Kamsarmax
Pedhoulas
Merchant
Pedhoulas
Leader
Pedhoulas
Commander
82,300
2006
Japan
Period
$13,750
3.75% Oct 2023 - Jun 2024
B
82,300
2007
Japan
Period32
$12,400
5.00% Nov 2023 - Aug 2024 B
83,700
2008
Japan
Period31
$20,000
3.75% Jan 2024 - Apr 2024
Pedhoulas Rose
82,000
2017
China
Period19,24
$14,375
5.00% Sep 2023 - May 2024
Pedhoulas
Cedrus15
Vassos9
Pedhoulas
Trader7
Morphou
81,800
2018
Japan
Period
$11,000 +
50%*112.5%
BPI 82 5TC
5.00% Mar 2023 - Apr 2024
82,000
2022
Japan
Period
$16,000
3.75% Dec 2023 - May 2024
82,000
2023
Japan
Period
$16,100
5.00% Nov 2023 - May 2024
82,000
2023
Japan
Period38
$17,573
5.00% Jan 2024 - Dec 2024
K
SAFEBULKERS
42
ANNUAL REPORT 2023
43
Rizokarpaso10
82,000
2023
Japan
Period39
$16,800
5.00% Nov 2023 - Aug 2024 K
Ammoxostos11
82,000
2024
Japan
Period40
$18,000
5.00% Jan 2024 - Oct 2024 K
Kerynia
82,000
2024
Japan
Period
$18,750
5.00% Jan 2024 - Nov 2024 K
Post-Panamax
Marina
Xenia
Sophia
Eleni
Martine
Andreas K
87,000
87,000
87,000
87,000
87,000
2006
2006
2007
2008
2009
Japan
Japan
Japan
Japan
Japan
92,000
2009 South Korea
Panayiota K11
92,000
2010 South Korea
Period19,37
Spot19
Spot19
Period19,36
Spot19
Spot19
Spot19
$13,097
$10,250
$14,400
$13,508
$15,100
$22,500
$12,000
5.00% Jan 2024 - Dec 2024
5.00% Jan 2024 - Feb 2024
5.00% Jan 2024 - Mar 2024
5.00% Jan 2024 - Jul 2024
5.00% Dec 2023 - Mar 2024
5.00% Jan 2024 - Mar 2024
5.00% Dec 2023 - Feb 2024
Agios
Spyridonas11
Venus Heritage12
Venus History12
Venus Horizon
Venus Harmony
92,000
2010 South Korea
Spot19,42
$13,000
5.00% Jan 2024 - Mar 2024
95,800
95,800
95,800
95,700
2010
2011
2012
2013
Japan
Japan
Japan
Japan
Spot19
Spot19
Spot19,43
Period
$13,750
$12,500
$12,128
$18,250
5.00% Jan 2024 - Mar 2024
5.00% Jan 2024 - Mar 2024
5.00% Feb 2024 - Mar 2024
5.00% Jan 2024 - Sep 2024
Troodos Sun17
85,000
2016
Japan
Period19,20
Troodos Air
85,000
2016
Japan
Period19,23
BPI 82 5TC *
116.5%
BPI 82 5TC *
113.5%
4.38% Jun 2023 - May 2024
5.00% Jun 2023 - May 2024
Troodos Oak
85,000
2020
Japan
Period
$15,350
5.00% Sep 2023 - Jun 2024
Climate Respect
87,000
2022
Japan
Period24
BPI 82 5TC *
133.5%
5.00% Oct 2023 - Jul 2024
Climate Ethics
Climate Justice
Capesize
87,000
87,000
2023
2023
Japan
Japan
Period
Period
$17,950
$21,500
5.00% Nov 2023 - Aug 2024
5.00% Jul 2023 - Jun 2024
Mount Troodos
181,400
2009
Japan
Period19,27 BCI 5TC * 106% 3.75% Mar 2023 - Mar 2024
Period19,32
$20,000
5.00% Apr 2024 - Feb 2026
Kanaris
Pelopidas
178,100
176,000
2010
2011
China
China
Period6
Period19,26
$25,928
$25,250
2.50% Sep 2011 - Sep 2031
3.75% Jun 2022 - May 2025
Aghia Sofia16
176,000
2012
China
Stelios Y
181,400
2012
Japan
Period19,33 BCI 5TC * 123% 5.00% Jun 2023 - May 2024
Period19,34
Period35
$26,000
$24,400
5.00% Aug 2024 - Jan 2026
3.75% Nov 2021 - Nov 2024
Period28
BCI 5TC * 117% 3.75% Nov 2024 - Feb 2027
D
D
D
D
D
E
E
E
F
F
F
I
I
J
J
J
C
Lake Despina8
Maria
Michalis H
Total
Chartered-In
Arethousa 44
Total
181,400
181,300
180,400
2014
2014
2012
Japan
Japan
China
Period19,18
$25,200
5.00% Feb 2022 - Feb 2025
Period19,29 BCI 5TC * 130% 5.00% Jan 2024 - Sep 2024
C
Period19,22
$23,000
3.75% Sep 2022 - Jul 2025
4,719,600
75,000
2012
Japan
Period
$11,950
5.00% Aug 2023 - Mar 2024
75,000
Newbuilds orderbook
TBN
TBN
TBN
82,500 Q3 2024
82,500 Q1 2025
China
China
82,000 Q2 2025
Japan
TBN
TBN
TBN
TBN
81,800 Q2 2026
81,800 Q3 2026
81,200 Q4 2026
81,200 Q1 2027
Japan
Japan
China
China
Subtotal
TOTAL
573,000
5,292,600
(1)
(2)
(3)
(4)
(5)
For existing vessels, the year represents the year built. For our newbuild, the date shown reflects the expected delivery dates.
Quoted charter rates are the recognized daily gross charter rates. For charter parties with variable rates among periods or consecutive charter parties with
the same charterer, the recognized gross daily charter rate represents the weighted average gross daily charter rate over the duration of the applicable
charter period or series of charter periods, as applicable. In the case of a charter agreement that provides for additional payments, namely ballast bonus
to compensate for vessel repositioning, the gross daily charter rate presented has been adjusted to reflect estimated vessel repositioning expenses. Gross
charter rates are inclusive of commissions. Net charter rates are charter rates after the payment of commissions. In the case of voyage charters, the charter
rate represents revenue recognized on a pro rata basis over the duration of the voyage from load to discharge port less related voyage expenses.
Commissions reflect payments made to third-party brokers or our charterers.
The start dates listed reflect either actual start dates or, in the case of contracted charters that had not commenced as of February 16, 2024, the scheduled
start dates. Actual start dates and redelivery dates may differ from the referenced scheduled start and redelivery dates depending on the terms of the char-
ter and market conditions and does not reflect the options to extend the period time charter.
Each vessel with the same letter is a “sister ship” of each other vessel that has the same letter, and under certain of our charter contracts, may be substi-
tuted with its “sister ships.”
(6) Charterer of MV Kanaris agreed to reimburse us for part of the cost of the scrubbers and BWTS installed on the vessel, which is recorded by increasing the
recognized daily charter rate by $634 over the remaining tenor of the time charter party.
(7) MV Pedhoulas Trader was sold and leased back in September 2023 on a bareboat charter basis for a period of ten years with a purchase option in favor of
the Company three years following the commencement of the bareboat charter period and a purchase obligation at the end of the bareboat charter period,
all at predetermined purchase prices.
(8) MV Lake Despina was sold and leased back in April 2021 on a bareboat charter basis for a period of seven years with a purchase option in favor of the
Company five years and six months following the commencement of the bareboat charter period at a predetermined purchase price.
(9) MV Vassos was sold and leased back in May 2022 on a bareboat charter basis for a period of ten years with a purchase option in favor of the Company three
years following the commencement of the bareboat charter period and a purchase obligation at the end of the bareboat charter period, all at predetermined
purchase prices.
(10) MV Rizokarpaso was sold and leased back in November 2023 on a bareboat charter basis for a period of ten years with a purchase option in favor of the
Company three years following the commencement of the bareboat charter period and a purchase obligation at the end of the bareboat charter period, all at
predetermined purchase prices.
(11) MV Ammoxostos was sold and leased back in January 2024 on a bareboat charter basis for a period of ten years with a purchase option in favor of the
Company three years following the commencement of the bareboat charter period and a purchase obligation at the end of the bareboat charter period, all at
predetermined purchase prices.
(12) MV Zoe, MV Kypros Land, MV Venus Heritage and MV Venus History were sold and leased back in November 2019, on a bareboat charter basis, one for a
period of eight years and three for a period of seven and a half years, with a purchase option in favor of the Company five years and nine months following
the commencement of the bareboat charter period at a predetermined purchase price.
(13) A period time charter of 5 years at a daily gross charter rate of $11,750 for the first two years and a gross daily charter rate linked to the BPI-82 5TC
times 97% minus $2,150, for the remaining period.
(14) A period time charter of 5 years at a daily gross charter rate of $13,800 for the first two years and a gross daily charter rate linked to the BPI-82 5TC
times 97% minus $2,150, for the remaining period.
(15) MV Pedhoulas Cedrus was sold and leased back in February 2021 on a bareboat charter basis for a period of ten years with a purchase option in favor of
the Company three years following the commencement of the bareboat charter period and a purchase obligation at the end of the bareboat charter period,
all at predetermined purchase prices.
(16) MV Aghia Sofia was sold and leased back in September 2022 on a bareboat charter basis, for a period of five years with purchase options in favor of the
Company commencing three years following the commencement of the bareboat charter period and a purchase obligation at the end of the bareboat charter
period, all at predetermined purchase prices.
(17) MV Troodos Sun was sold and leased back in August 2021 on a bareboat charter basis for a period of ten years, with purchase options in favor of the
Company commencing three years following the commencement of the bareboat charter period and a purchase obligation at the end of the bareboat charter
period, all at predetermined purchase prices.
(18) A period time charter for a duration of 3 years at a gross daily charter rate of $22,500 plus an one-off $3.0 million payment upon charter commencement.
The charter agreement also grants the charterer an option to extend the period time charter for an additional year at a gross daily charter rate of $27,500.
(19) Scrubber benefit was agreed on the basis of fuel consumption of heavy fuel oil and the price differential between the HSFO and the VLSFO cost for the voy-
age and is not included on the daily.
(20) A period time charter of 11 to 13 months at a daily gross charter rate linked to the BPI-82 5TC times 116.5%.
(21) A period time charter of 12 to 14 months at a daily gross charter rate of $11,000 plus additional gross daily charter rate linked to the 50% of the BPI-82
5TC times 112.5% .
(22) A period time charter for a minimum duration of three years at a gross daily charter rate of $23,000. The charter agreement also grants the charterer an
option to extend the period time charter for an additional year at the same gross daily charter rate.
(23) A period time charter of 11 to 14 months at a daily gross charter rate linked to the BPI-82 5TC times 113.5% .
(24) A period time charter of 10 to 13 months at a daily gross charter rate linked to the BPI-82 5TC times 133.5%.
(25) A period time charter for a duration of 10 to 12 months at a gross daily charter rate of $12,400. The charter agreement also grants the charterer an option
to extend the period time charter for an additional duration of 10 to 12 months at a gross daily charter rate of $14,400.
(26) A period time charter for a duration of three years at a gross daily charter rate of $25,250. The charter agreement also grants the charterer an option to
extend the period time charter for an additional year at the same gross daily charter rate.
(27) A period time charter for a duration of 11 to 14 months at a gross daily charter rate linked to the BCI 5TC times 106%.
(28) A period time charter for a duration of two and a half years at a gross daily charter rate linked to the BCI 5TC times 117%. The charter agreement also
grants the charterer an option to extend the period time charter for an additional three years at a gross daily charter rate of $23,000.
(29) A period time charter for a duration of 12 to 18 months at a gross daily charter rate linked to the BCI 5TC times 129%.
(30) MV Kypros Sky and MV Kypros Spirit were sold and leased back in December 2019 on a bareboat charter basis for a period of eight years, with purchase
options in favor of the Company commencing three years following the commencement of the bareboat charter period and a purchase obligation at the end
of the bareboat charter period, all at predetermined purchase prices. In September 2023 the Company exercised the purchase options in both vessels and
the ownership of Kypros Sky and MV Kypros Spirit was transferred back to the Company..
(31) MV Panayiota K and MV Agios Spyridonas were sold and leased back in January 2020 on a bareboat charter basis for a period of six years, with purchase
options in favor of the Company commencing three years following the commencement of the bareboat charter period and a purchase obligation at the end
of the bareboat charter period, all at predetermined purchase prices. In January 2023 the Company exercised the purchase options in both vessels and the
ownership of MV Panayiota K and MV Agios Spyridonas was transferred back to the Company.
(32) A period time charter for a duration of 22 to 26 months at a gross daily charter rate of $20,000. The charter agreement also grants the charterer an option
to extend the period time charter to a total duration of 34 to 36 months at the same gross daily charter rate.
(33) A period time charter for a duration of 11 to 14 months at a gross daily charter rate linked to the BCI 5TC times 123%.
(34) A period time charter for a duration of 18 to 21 months at a gross daily charter rate of $26,000. The charter agreement also grants the charterer an option
to extend the period time charter to a total duration of 36 to 42 months at the same gross daily charter rate.
(35) A period time charter for a duration of 3 years at a gross daily charter rate of $24,400. The charter agreement also grants the charterer an option to extend
the period time charter for an additional year at a gross daily charter rate of $26,500.
(36) A period time charter for a duration of 6 to 9 months at a daily gross charter rate of $8,250 for the first 50 days and a daily gross charter rate of $15,500
for the remaining period.
SAFEBULKERS
44
ANNUAL REPORT 2023
45
(37) A period time charter for a duration of 11 to 13 months at a daily gross charter rate of $11,250 for the first 60 days and a daily gross charter rate of
$13,500 for the remaining period plus ballast bonus of $0.6 million upon charter commencement.
(38) A period time charter for a duration of 10 to 13 months at a daily gross charter rate of $14,500 for the first 45 days and a daily gross charter rate of
$18,050 for the remaining period
(39) A period time charter for a duration of 9 to 12 months at a gross daily charter rate of $16,800. The charter agreement also grants the charterer an option
to extend the period time charter for an additional duration of 9 to 12 months at a gross daily charter rate of $18,300.
(40) A period time charter for a duration of 9 to 12 months at a gross daily charter rate of $18,000. The charter agreement also grants the charterer an option
to extend the period time charter for an additional duration of 9 to 12 months at a gross daily charter rate of $19,400.
(41) A spot time charter at a daily gross charter rate of $20,000 plus ballast bonus of $0.4 million upon charter commencement.
(42) A spot time charter at a daily gross charter rate of $13,000 plus ballast bonus of $0.1 million upon charter commencement.
(43) A spot time charter at a daily gross charter rate of $11,750 for the first 30 days and a daily gross charter rate of $13,750 for the remaining period.
(44)
In March 2023, the Company entered into an agreement to sell MV Efrossini, a 2012 Japanese-built, Panamax class vessel to an unaffiliated third party at
a gross sale price of $22.5 million. The sale was consummated in July 2023, upon the delivery of the vessel to her new owners renamed MV Arethousa and
immediately chartered back by the Company at a gross daily charter rate of $16,050 for a period of ten to fourteen months.
In February 2024, the Company entered into an agreement for the sale of the Maritsa, a 2005 Japanese-built, Panamax class dry-bulk vessel, at a gross
sale price of $12.2 million. The vessel is scheduled to be delivered to her new owners in April-May 2024.
(45)
Chartering of Our Fleet
Our vessels are used to transport bulk cargoes, particularly coal, grain and iron ore, along worldwide shipping routes. We may
employ our vessels in time charters or in voyage charters.
A time charter is a contract to charter a vessel for a fixed period of time at a set daily rate and can last from a few days up to
several years, where the vessel performs one or more trips between load port(s) and discharge port(s). Based on the duration of
vessel’s employment, a time charter can be either a long-term, or period, time charter with duration of more than three months,
or a short-term, or spot, time charter with duration of up to three months. Under our time charters, the charterer pays for most
voyage expenses, such as port, canal and fuel costs, agents’ fees, extra war risks insurance and any other expenses related to
the cargoes, and we pay for vessel operating expenses, which include, among other costs, costs for crewing, provisions, stores,
lubricants, insurance, maintenance and repairs, tonnage taxes, drydocking and intermediate and special surveys.
Voyage charters are generally contracts to carry a specific cargo from a load port to a discharge port, including positioning the
vessel at the load port. Under a voyage charter, the charterer pays an agreed upon total amount or on a per cargo ton basis, and
we pay for both vessel operating expenses and voyage expenses. We infrequently enter into voyage charters. Voyage charters
together with spot time charters are referred to in our industry as employment in the spot market.
We intend to employ our vessels on both period time charters and spot time charters, according to our assessment of market con-
ditions, with some of the world’s largest consumers of marine drybulk transportation services. The vessels we deploy on period
time charters provide us with relatively stable cash flow and high utilization rates, while the vessels we deploy in the spot market
allow us to maintain our flexibility in low charter market conditions. As of February 16, 2024, the average remaining duration of
the charters for our existing fleet was 0.8 years. See, ‘’Item 5. Operational and Financial Review and Prospects D. Trend informa-
tion.’’ for additional information.
Our Customers
Since 2005, our customers have included over 30 national, regional and international companies, including Bunge, Cargill, Glen-
core, Daiichi, Intermare Transport G.m.b.H., Energy Eastern Pte. Ltd., NYK, NS United Kaiun Kaisha, Kawasaki Kisen Kaisha, Old-
endorff GmbH and Co. KG, Louis Dreyfus Armateurs, Louis Dreyfus Commodities, ArcelorMittal or their affiliates. During 2023,
two of our charterers, namely Olam International Limited and Cargill International S.A., accounted for 26.87% of our revenues,
with each one accounting for more than 10.0% of total revenues. During 2022, two of our charterers, namely Viterra B.V. (ex-
Glencore Agriculture B.V.) and Cargill International S.A., accounted for 33.52% of total revenues with each one accounting for
more than 10.0% of total revenues. During 2021, two of our charterers, namely Viterra B.V. and Cargill International S.A., ac-
counted for 30.70% of total revenues with each one accounting for more than 10.0% of total revenues. During 2020, two of our
charterers, namely Viterra B.V. and Cargill International S.A., accounted for 26.14% of total revenues with each one accounting
for more than 10.0% of total revenues. We seek to charter our vessels primarily to charterers who intend to use our vessels with-
out sub-chartering them to third parties. A prospective charterer’s financial condition and reliability are also important factors in
negotiating employment for our vessels.
Management of Our Fleet
In May 2008, we entered into a management agreement with Safety Management and in May 2015, we entered into a management
agreement with Safe Bulkers Management, pursuant to which our Managers provided us with our executive officers, technical, admin-
istrative, commercial and certain other services. Each of these management agreements expired on May 28, 2018. In May 2018, we
entered into new management agreements (the “Original Management Agreements”), pursuant to which our Managers continue to
provide us with technical, administrative, commercial and certain other services. Each of the Original Management Agreements was
effective as of May 29, 2018 and had an initial three-year term which could be extended on a three-year basis on May 29, 2021 and
May 29, 2024 upon mutual agreement with the Managers. On May 29, 2021, the Company and the Managers agreed to extend the
term of the Original Management Agreements until May 28, 2024. On April 1, 2022, we entered into a new management agreement
with the New Manager, and together with the Original Management Agreements, the “Management Agreements”, with the initial
term expiring on May 29, 2024, which can be extended for one additional term of three years. Our arrangements with our Managers
and their performance are reviewed by our board of directors. Our management team, collectively referred to in this annual report
as our “executive officers,” provide strategic management for our company and also supervise the management of our day-to-day
operations by our Managers. Our Managers report to us and our board of directors through our executive officers. The Management
Agreements with our Managers have a maximum expiration date in May 2027 and we expect to enter into new agreements with the
Managers upon their expiration. The terms of any such new agreements have not yet been determined.
Pursuant to the Management Agreements, in return for providing such services our Managers receive a ship management fee of
€875 per day per vessel and one of our Managers receives an annual ship management fee of €3.50 million. For the three year
period from May 29, 2018 to May 28, 2021 the annual ship management fee was €3.0 million. Our Managers also receive a
commission of 1.0% based on the contract price of any vessel sold by it on our behalf, and a commission of 1.0% based on the
contract price of any vessel bought by it on our behalf, including the acquisition of each of our contracted newbuilds. We also pay
our Managers a supervision fee of $550,000 per newbuild, of which 50% is payable upon the signing of the relevant supervision
agreement, and 50% upon successful completion of the sea trials of each newbuild, which we capitalize, for the on-premises su-
pervision by selected engineers and others on the Managers’ staff of newbuilds we have agreed to acquire pursuant to shipbuilding
contracts, memoranda of agreement, or otherwise.
Our Managers have agreed that, during the term of our Management Agreements and for a period of one year following their
termination, our Managers will not provide management services to, or with respect to, any drybulk vessels other than (a) on our
behalf or (b) with respect to drybulk vessels that are owned or operated by companies affiliated with our chief executive officer or
his family members, and drybulk vessels that are acquired, invested in or controlled by companies affiliated with our chief execu-
tive officer or his family members, subject in each case to compliance with, or waivers of, the restrictive covenant agreements en-
tered into between us and such companies. Our Managers have also agreed that if one of our drybulk vessels and a drybulk vessel
owned or operated by any such company are both available and meet the criteria for a charter being arranged by our Managers,
our drybulk vessel will receive such charter.
The foregoing description of the Management Agreements does not purport to be complete and is qualified in its entirety by
reference to the Management Agreements, copies of which are attached as Exhibit 4.1 and Exhibit 4.2 and incorporated herein
by reference.
See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Management Agreements” for
more information.
Competition
We operate in highly competitive markets that are based primarily on supply and demand. Our business fluctuates in line with the
main patterns of trade of the major drybulk cargoes and varies according to changes in the supply and demand for these items.
We believe we differentiate ourselves from our competition by providing modern vessels with advanced designs and technologi-
cal specifications. As of February 16, 2024, our fleet had an average age of 9.9 years. The majority of our fleet has been built
in Japanese shipyards, which we believe provides us with an advantage in attracting large, well-established customers, including
Japanese customers.
The drybulk sector is characterized by relatively low barriers to entry, and ownership of drybulk vessels is highly fragmented. In
general, we compete with other owners of Panamax class or larger drybulk vessels for charters based upon price, customer rela-
tionships, operating expertise, professional reputation and size, age, location and condition of the vessel.
Crewing and Shore Employees
Our management team consists of our chief executive officer, president, chief financial officer and assistant chief financial
officer, chief operating officer, chief financial controller and assistant chief financial controller, chief compliance officer and
our internal auditor. Our Managers are responsible for the technical management of our fleet and therefore also handle the
recruiting, either directly or through crewing agents, of the senior officers and all other crew members for our vessels. As of
December 31, 2023, approximately 948 people served on board the vessels in our fleet, and our Managers employed approxi-
mately 154 people on shore.
Permits and Authorizations
We are required by various governmental and other agencies to obtain certain permits, licenses, certificates and financial as-
surances with respect to each of our vessels. The kinds of permits, licenses, certificates and financial assurances required by
governmental and other agencies depend upon several factors, including the commodity being transported, the waters in which
the vessel operates, the nationality of the vessel’s crew and the type and age of the vessel. All permits, licenses, certificates and
financial assurances currently required to operate our vessels have been obtained. Additional laws and regulations, environmental
or otherwise, may be adopted which could limit our ability to do business or increase the cost of doing business.
Risk of Loss and Liability Insurance
General
The operation of our fleet involves risks such as mechanical failure, collision, property loss, cargo loss or damage as well as
personal injury, illness and loss of life. In addition, the operation of any oceangoing vessel is subject to the inherent possibility
of marine disaster, including oil spills and other environmental mishaps, the risk of piracy and the liabilities arising from owning
and operating vessels in international trade. The U.S. Oil Pollution Act of 1990 (“OPA 90”), which imposes virtually unlimited
liability upon owners, operators and demise charterers of vessels trading in the United States exclusive economic zone for certain
oil pollution accidents in the United States, has made liability insurance more expensive for vessel owners and operators trading
in the United States market.
Our Managers are responsible for arranging insurance for all our vessels on the terms specified in our Management Agreements,
which we believe are in line with standard industry practice. In accordance with our Management Agreements, our Managers pro-
cure and maintain hull and machinery insurance, war risks insurance, freight, demurrage and defense coverage and protection and
indemnity coverage with mutual assurance associations. Due to our low incident rate and the relatively young age of our fleet, we
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are generally able to procure relatively low rates for all types of insurance.
While our insurance coverage for our drybulk vessel fleet is in amounts that we believe to be prudent to protect us against normal
risks involved in the conduct of our business and consistent with standard industry practice, our Managers may not be able to
maintain this level of coverage throughout a vessel’s useful life. Furthermore, all risks may not be adequately insured against, any
particular claim may not be paid and adequate insurance coverage may not always be obtainable at reasonable rates.
Hull and machinery insurance
Our marine hull and machinery insurance covers risks of partial loss or actual or constructive total loss from collision, fire, ground-
ing, engine breakdown and other insured risks up to an agreed amount per vessel. Our vessels will each be covered up to at least
their fair market value after meeting certain deductibles per incident per vessel. We also maintain increased value coverage for
each of our vessels. Under this increased value coverage, in the event of the total loss of a vessel, we are entitled to recover
amounts in excess of the total loss amount recoverable under our hull and machinery policy.
Protection and indemnity insurance
Protection and indemnity insurance is a form of mutual indemnity insurance provided by mutual marine protection and indemnity
associations (“P&I Associations”) formed by vessel owners to provide protection from large financial loss to one club member by
contribution towards that loss by all members.
Protection and indemnity insurance covers our third-party liabilities in connection with our shipping activities. This includes
third-party liability and other related expenses of injury or death of crew members, passengers and other third parties, loss or
damage to cargo, claims arising from collisions with other vessels, damage to other third party property, pollution arising from
oil or other substances and salvage, towing and other related costs, including wreck removal. Our coverage, except for pollu-
tion, will be unlimited. Furthermore, within this aggregate limit, club coverage is also limited to the amount of the member’s
legal liability.
Our protection and indemnity insurance coverage for pollution is limited to $1.0 billion per vessel per incident. Our protection
and indemnity insurance coverage in respect of passengers is limited to $2.0 billion and in respect of passengers and seamen is
limited to $3.0 billion per vessel per incident. The 12 P&I Associations that comprise the International Group of P&I Clubs (the “In-
ternational Group”) insure approximately 90.0% of the world’s commercial blue-water tonnage and have entered into a pooling
agreement to reinsure each P&I Association’s liabilities. As a member of a P&I Association that is a member of the International
Group, we are subject to calls payable to the P&I Association based on the International Group’s claim records, as well as the claim
records of all other members of the individual associations.
Although the P&I Associations compete with each other for business, they have found it beneficial to mutualize their larger risks
among themselves through the International Group. This is known as the “Pool.” This pooling is regulated by a contractual agree-
ment which defines the risks that are to be covered and how claims falling on the Pool are to be shared among the participants
in the International Group. The Pool provides a mechanism for sharing all claims in excess of $10.0 million up to, currently, ap-
proximately $8.9 billion. On that basis, all claims up to $10.0 million will be covered by each Club’s Individual Retention and all
claims in excess of $10.0 million up to $100.0 million will be covered by the Pool. The Pool is structured in three layers from
$10 million to $100 million. For amounts in excess of $30 million, the Pool is reinsured by the Group captive reinsurance vehicle,
Hydra Insurance Company Limited (“Hydra”). Hydra is a Bermuda incorporated Segregated Accounts company in which each of
the 12 Group Clubs has its own segregated account (or “cell”) ring fencing its assets and liabilities from those of the company or
any of the other Club cells. Hydra reinsures each Club in respect of that Club’s liabilities within the Pool and reinsurance layers
in which it participates. Through the participation of Hydra, the Group Clubs can retain, within their Hydra cells, premium which
would otherwise have been paid to the commercial reinsurance markets.
For the 2023/2024 policy year, the International Group maintained a three layer Group General Excess of Loss (“GXL”) GXL re-
insurance program, together with an additional Collective Overspill layer, which combine to provide commercial reinsurance cover
of up to $3.1 billion per vessel per incident, comprising of reinsurance for all claims of up to $2.1 billion per vessel per incident in
excess of the $100.0 million insured by the Pool and an additional $1.0 billion in excess of the aforesaid $2.1 billion per vessel
per incident in respect of claims for overspill.
War Risks Insurance
Our war risk insurance covers hull or freight damage, detention or diversions risks and P&I liabilities (including crew) arising out
of confiscations, seizure, capture, vandalism, sabotage and/or other war risks and is subject to separate limits of:
(i) each vessel’s hull and machinery value and each vessel’s corresponding increased value, and
(ii) for war risks P&I liabilities including crew up to $500.0 million per vessel per incident.
Inspection by Classification Societies
Every oceangoing vessel must be “classed” by a classification society. The classification society certifies that the vessel is “in
class,” signifying that the vessel has been built and maintained in accordance with the rules and regulations of the classification
society. In addition, each vessel must comply with all applicable laws, rules and regulations of the vessel’s country of registry,
or “flag state,” as well as the international conventions of which that flag state is a member. A vessel’s compliance with inter-
national conventions and corresponding laws and ordinances of its flag state can be confirmed by the applicable flag state, port
state control or, upon application or by official order, the classification society, acting on behalf of the authorities concerned.
The classification society also undertakes, upon request, other surveys and checks that are required by regulations and
requirements of the flag state. These surveys are subject to agreements made in each individual case or to the regulations of
the country concerned.
All areas subject to survey as defined by the classification society are required to be surveyed at least once per class period, un-
less shorter intervals between surveys are prescribed elsewhere. The period between two subsequent surveys of each area must
not exceed five years. The maintenance of class, regular and extraordinary surveys of a vessel’s hull and machinery, including the
electrical plant, and any special equipment classed are required to be performed as follows:
~ Annual Surveys. For oceangoing vessels, annual surveys are conducted for their hulls and machinery, including the electri-
cal plants, and for any special equipment classed, at intervals of 12 months from the date of commencement of the class
period indicated in the certificate.
~ Intermediate Surveys. Extended annual surveys are referred to as “intermediate surveys” and typically are conducted on
the occasion of the second or third annual survey after commissioning and after each class renewal.
~ Class Renewal / Special Surveys. Class renewal surveys, also known as “special surveys,” are more extensive than inter-
mediate surveys and are carried out at the end of each five-year period. During the special survey the vessel is thoroughly
examined, including thickness-gauging to determine any diminution in the steel structures. Should the thickness be found
to be less than class requirements, the classification society would prescribe steel renewals. It may be expensive to have
steel renewals pass a special survey if the vessel is aged or experiences excessive wear and tear. A vessel owner has the
option of arranging with the classification society for the vessel’s machinery to be on a continuous survey cycle, according
to which all machinery would be surveyed within a five-year cycle. At an owner’s application, the surveys required for class
renewal may be split according to an agreed schedule to extend over the entire period of class.
Vessels are drydocked during intermediate and special surveys for repairs of their underwater parts. Intermediate surveys
may not be required for vessels under the age of 15 years. If “in water survey” notation is assigned by class, as is the case
for our vessels, the vessel owner has the option of carrying out an underwater inspection of the vessel in lieu of drydocking,
subject to certain conditions. In the event that an “in water survey” notation is assigned as part of a particular intermediate
survey, drydocking would be required for the following special survey thereby generally achieving a higher utilization for the
relevant vessel. Drydocking can be undertaken as part of a special survey if the drydocking occurs within 15 months prior
to the special survey due date. Special survey may be extended under certain provisions for a period of up to three months
from their due date. BWTS and Scrubber installations and vessels’ upgrades are usually undertaken concurrently with the
scheduled drydocking. A detailed schedule of expected drydockings and special surveys for the next three years is provided
in the following table:
Vessel Name
Agios Spyridonas (3)
Venus Harmony (3)
Mount Troodos (3)
Panayiota K (3)
Stelios Y (2) (3)
Kypros Land
Martine (3)
Pedhoulas Merchant (3)
Kypros Sea
Venus Heritage
Pedhoulas Leader
Kypros Bravery
Kanaris
Kypros Sky
Troodos Sun
Troodos Oak
Troodos Air
Sophia
Pelopidas
Kypros Loyalty
Marina
Paraskevi 2
Xenia
Andreas K
Drydocking
January 2024
January 2024
March 2024
March 2024
March 2024
April 2024
May 2024
May 2024
June-24
October-24
November-24
January-25
March-25
March-25
April-25
April-25
May-25
June-25
June-25
June-25
January-26
April-26
April-26
June-26
Scheduled Survey (1)
January-25
February-24
November-24
April-25
March-25
April-24
February-24
March-26
March-24
December-25
February-27
January-25
March-25
March-25
January-26
April-25
March-26
June-27
November-26
June-25
January-26
April-26
April-26
August-24
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SAFEBULKERS
Vessel Name
Pedhoulas Commander
Kypros Spirit
Venus History
(1) Intermediate, Docking or Special survey date.
(2) Scrubber retrofit.
(3) Environmental upgrades.
Drydocking
July-26
October-26
October-26
Scheduled Survey (1)
May-28
July-26
September-26
Failure to timely complete repairs, surveys, or dry-dockings may affect our results of operations.
Following a survey, if any defects are found, the classification surveyor will issue a “recommendation or condition of class” which
must be rectified by the vessel owner within the prescribed time limits.
In general, insurance underwriters make it a condition for insurance coverage that a vessel be certified as “in class” by a classifica-
tion society which is a member of the International Association of Classification Societies (“IACS”). All of our vessels are certified
as being “in class” by either Lloyd’s Register of Shipping, the American Bureau of Shipping or Bureau Veritas, each of which is a
member of IACS.
Regulations: Safety and the Environment
General
Our vessels are subject to international conventions and national, state and local laws and regulations in force in international
waters and the countries in which they operate or are registered, including environmental protection requirements governing the
management and disposal of hazardous substances and wastes, the cleanup of oil spills and the management of other contamina-
tion, air emissions, water discharges and ballast water.
These laws and regulations include regulations imposed by the IMO, the United Nations agency for maritime safety and the pre-
vention of pollution by ships, such as the International Convention for Prevention of Pollution from Ships (“MARPOL”), the Interna-
tional Convention for Safety of Life at Sea (“SOLAS”), International Convention for the Control and Management of Ships’ Ballast
Water and Sediments (the “BWM Convention”) and in general implementing all related regulations adopted by the IMO, the E.U.
and other international, national and local regulatory bodies in the jurisdictions where our vessels travel and in the ports where
our vessels call. In the U.S., the requirements include OPA 90, the U.S. Comprehensive Environmental Response, Compensation,
and Liability Act (“CERCLA”), the U.S. Clean Water Act (the “CWA”) and U.S. Clean Air Act (the “CAA”). Compliance with these
environmental protection requirements has imposed significant cost and expense, including the cost of vessel modifications and
implementation of certain operating procedures.
Our fleet complies with all current requirements. However, we incurred significant vessel modification expenditures since 2019
mainly in BWTS and Scrubbers and we anticipate to incur additional expenditures in the current or subsequent fiscal years to com-
ply with certain requirements, including mainly the installation of one additional Scrubber. In parallel, the Company is continuing a
vessel environmental upgrade program, in relation to existing and forthcoming GHG emission regulations, which involves applica-
tion of low friction paints and installation of energy saving devices, having upgraded 21 existing vessels as of February 16, 2024
and scheduling upgrades in nine more by the end of 2024.
Under our Management Agreements, our Managers have assumed technical management responsibility for our fleet, including
compliance with all applicable government and other regulations. If the Management Agreements with our Managers terminate,
we would attempt to hire another party to assume this responsibility. In the event of termination, we might be unable to hire an-
other party to perform these and other services for the present fee structure and related costs. However, due to the nature of our
relationship with our Managers, we do not expect our Management Agreements to be terminated early.
A variety of governmental and private entities subject our vessels to both scheduled and unscheduled inspections. These entities
include the local port authorities (such as the U.S. Coast Guard, harbor master or equivalent), classification societies, flag state
administration (country of registry), charterers and terminal operators. Certain of these entities require us to obtain permits,
licenses, financial assurances and certificates for the operation of our vessels. Failure to maintain necessary permits or approvals
or identification of deficiencies during inspections could require us to incur substantial costs or result in the temporary suspen-
sion of the operation of one or more of our vessels.
We believe that the heightened level of environmental and quality concerns among insurance underwriters, regulators and char-
terers is leading to greater inspection and safety requirements on all vessels and may accelerate the scrapping of older vessels
throughout the drybulk shipping industry. Increasing environmental concerns have created a demand for vessels that conform to
the stricter environmental standards. We are required to maintain operating standards for all of our vessels that emphasize ef-
ficiency, operational safety, quality maintenance, reduced environmental footprint, continuous training of our officers and crews
and compliance with U.S. and international regulations. Our Managers and our vessels are certified in accordance with ISO 14001
and ISO 50001 relating to environmental standards and energy efficiency. Moreover we have obtained additional class notation
for most of our fleet for the prevention of sea and air pollution while we are in the process of obtaining such class notation for
the remaining vessels. We believe that the operation of our vessels is in substantial compliance with all environmental laws and
regulations applicable to us as of the date of this annual report. However, because such laws and regulations are subject to fre-
quent change and may impose increasingly stricter requirements, such future requirements could limit our ability to do business,
increase our operating costs, force the early retirement of our vessels and/or affect their resale value, all of which could have a
material adverse effect on our financial condition and results of operations.
Regulations by IMO and Other Related Bodies
Regulations issued by IMO and other related bodies may affect our operations, impose restrictions on our vessels, or require
additional investments. For example MARPOL convention of IMO regulates marine pollution, emissions and discharges. IMO and
other jurisdictions have regulated or are considering the further regulation of GHG emissions from vessels.
Additional conventions, laws and regulations may be adopted which could limit our ability to do business or increase the cost of
our doing business and which may materially adversely affect our business, financial condition and results of operations. Because
such conventions, laws and regulations are often revised, or the required additional measures for compliance are still under de-
velopment, we cannot predict the ultimate cost of complying with such conventions, laws and regulations or the impact thereof on
the resale prices or useful lives of our vessels. We are also required by various governmental and quasi-governmental agencies to
obtain certain permits, licenses, certificates and financial assurances with respect to our operations.
These requirements can also affect the resale prices or useful lives of our vessels or require reductions in cargo capacity, ship modi-
fications or operational changes or restrictions. Failure to comply with these requirements could lead to decreased availability of,
or more costly insurance coverage for environmental matters or result in the denial of access to certain jurisdictional waters or
ports, or detention in certain ports. Under local, national, as well as international treaties and conventions, we could incur material
liabilities, including cleanup obligations and claims for natural resource, personal injury and property damages in the event that
there is a release of petroleum or other hazardous materials from our vessels or otherwise in connection with our operations.
Violations of, or liabilities under, environmental regulations can result in substantial penalties, fines and other sanctions, includ-
ing, in certain instances, seizure or detention of our vessels. In addition, we are subject to the risk that we, our affiliated entities,
or our or their respective officers, directors, shore employees, crew on board and agents may take actions determined to be in
violation of such environmental regulations and laws and our environmental policies. Any such actual or alleged environmental
laws regulations and policies violation, under negligence, willful misconduct or fault, could result in substantial fines, civil and/
or criminal penalties or curtailment of operations in certain jurisdictions, and might adversely affect our business, results of
operations or financial condition. In addition, actual or alleged violations could damage our reputation and ability to do business.
Furthermore, detecting, investigating and resolving actual or alleged violations is expensive and can consume significant time and
attention of our senior management. Events of this nature would have a material adverse effect on our business, financial condi-
tion and results of operations.
Such regulations are presented in the following paragraphs:
Nitrogen and Sulfur Oxide Emission Regulations: In 1997, the IMO adopted Annex VI to MARPOL to address air pollution from
vessels. Annex VI became effective in 2005, and sets limits on sulfur oxide and nitrogen oxide emissions from vessel exhausts
and prohibits deliberate emissions of ozone depleting substances, such as chlorofluorocarbons. Annex VI also includes a global
cap on the sulfur content of marine fuels and allows for the establishment of Emission Control Areas (“ECAs”) with more strin-
gent controls on sulfur emissions. Presently, designated ECAs include specified areas of North America, the Caribbean, the North
Sea and the Baltic Sea. The Mediterranean Sea will be designated ECA as of May 1, 2024, which status will take effect on May
1, 2025, for sulfur oxides (“SOx”) under MARPOL Annex VI Regulation 14. In 2008, the IMO Marine Environment Protection
Committee (“MEPC”) adopted amendments to Annex VI regarding particulate matter, nitrogen oxides and sulfur oxide emissions.
These amendments, which entered into force in 2010, are designed to reduce air pollution from vessels by, among other things, (i)
establishing new tiers of stringent nitrogen oxide emissions standards for new marine engines, depending on their date of instal-
lation and (ii) implementing a progressive reduction of sulfur oxide emissions from ships:
(i) Control of Nitrogen Oxides
Nitrogen oxides emission regulations require the installation of advanced Tier III engines in newbuilds and modifications are not
expected to be required in existing vessels.
(ii) Control of Sulfur Oxides
A global 0.5% sulfur cap on marine fuels came into force on January 1, 2020, as agreed in amendments adopted in 2008 for
Annex VI to MARPOL reducing the previous sulfur cap of 3.5%.Vessels may use either VLSFO or HSFO if they are equipped
with Scrubbers. The viability of Scrubber investments mainly depends on the price differential between VLSFO which usually
are more expensive and HSFO. The use of VLSFO has raised concerns in relation to excess wear of piston liners and fuel pumps.
On the other hand shortage of HSFO in certain ports has been experienced as only a small percentage of the global fleet is
equipped with Scrubbers and the trading of HSFO may not be economical to fuel suppliers. Furthermore, restrictions of efflu-
ents from Scrubbers have been or are considered to be imposed in various jurisdictions, mainly in ports, which may affect the
viability of such investments.
In response to sulfur oxides emissions regulations, since 2019 we have installed Scrubbers in 21 of our vessels and we expect
to install one additional Scrubber during 2024, completing the Company’s Scrubber project. In all vessels the Company had in-
troduced critical spares inventory on board in order to secure smooth operation and compliance with existing regulations. If the
price differential between VLSFO and HSFO is narrower than expected due to among other things, a drop in oil prices and/or a
reduced demand for oil, then we may not realize any return, or we may realize a lower return on our investment in Scrubbers than
that which we expected, which could have a material adverse effect on our results of operations, cash flows and financial position.
Conversely, if the price differential between VLSFO and HSFO is wider than expected, about half of our vessels that will not be
equipped with Scrubbers may face difficulties in competing with vessels equipped with Scrubbers, which could have a material
adverse effect on our results of operations, cash flows and financial position.
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ANNUAL REPORT 2023
51
Reduced limits of sulfur content of fuel oil for ECA passage are implemented, resulting to the use of lighter fuels, namely low
sulfur marine gas oil with a maximum sulfur content of 0.1% (“LSMGO”). Additional or new requirements, conventions, laws
or regulations, including the adoption of additional ECAs, or other new or more stringent emissions requirements adopted by
the IMO, the E.U., the U.S. or individual states, or other jurisdictions in which we operate, could require vessel modifications or
otherwise increase the costs of our operations. All our non Scrubber-fitted vessels may use LSMGO for ECA passage and the
Scrubber-fitted vessels, which use HSFO are designed to reduce the sulfur emissions of HSFO to levels substantially below the
corresponding limit of 0.1% sulfur content suitable for ECA passage. Such vessels of our fleet have an additional commercial
advantage on the basis of further increased price differential of LSMGO versus HSFO compared to price differential of VLSFO
versus HSFO and a further environmental advantage due to their reduced SOx emissions as their Scrubbers operate below
0.1% sulfur content limit at all times when in use.
Examples of additional requirements imposed locally from time to time are: (i) the Domestic Emission Control Areas (“DECAs”)
introduced by China, in 2015, which have designated the Pearl River Delta, the Yangtze River Delta and the Bohai-Rim Area
(Beijing, Tianjin and Hebei) as areas where vessels navigating, berthing and operating are required to use VLSFO. As of Janu-
ary 1, 2019, China expanded the scope of the DECAs to include all coastal waters within 12 nautical miles of the mainland,
and (ii) U.S. Vessel General Permit (the “VGP”) areas. Our Scrubber-fitted vessels do not operate the Scrubbers while in such
areas, due to certain additional restrictions, and instead are using LSMGO.
Greenhouse Gas Regulation – United Nations Framework Convention on Climate Change: In 2005, the Kyoto Protocol to the
United Nations Framework Convention on Climate Change entered into force. Pursuant to the Kyoto Protocol, adopting countries
are required to implement national programs to reduce emissions of certain gases, generally referred to as greenhouse gases,
which are suspected of contributing to global warming. The Paris Agreement adopted under the United Nations Framework Con-
vention on Climate Change in December 2015 contemplates commitments from each nation party thereto to take action to
reduce greenhouse gas emissions and limit increases in global temperatures. International and multinational bodies or individual
countries also, have adopted or may further adopt their own climate change regulatory initiatives.
Climate control legislation or other regulatory initiatives in the jurisdictions where we operate may gradually render less energy
efficient vessels obsolete, leading to scrapping of older vessels, or to investments for environmental upgrades in the existing fleet
and may require additional investments in more energy efficient newbuilds. Furthermore, the use of fossil fuels through various
existing of forthcoming taxation schemes may become more expensive and new alternative fuels with low carbon footprint com-
pared to fossil fuels are being developed and introduced while incentives are provided for their adoption, which may substantially
affect the roadmap towards decarbonization of the shipping industry. Additional climate control regulations may result to further
financial impacts that we cannot predict with certainty at this time which could have a material adverse effect on our business,
financial condition and results of operations.
The European Parliament and the Council of the E.U. have adopted regulation 2015/757, the EU-MRV on the monitoring, reporting
and verification of CO2 emissions from maritime transport. It entered into force on July 1, 2015 and monitoring began January 1,
2018. The maritime EU-MRV regulation applies to all merchant ships of 5,000 gross tons or above on voyages from, to and between
ports under jurisdiction of E.U. member states. From January 1, 2025, general cargo ships between 400 and 5,000 gross tons
also fall within the scope of the EU-MRV. Companies operating the vessels will have to monitor the CO2 emissions released while
in port and for any voyages to or from a port under the jurisdiction of an E.U. member state and to keep records on CO2 emissions
on both per-voyage and annual bases. Furthermore, as of January 1, 2018, our vessels began monitoring and reporting CO2 emis-
sions pursuant to the IMO DCS regulation, which is part of the IMO’s efforts to reduce GHG emissions from ships by 50% by 2050
compared to 2008. On February 4, 2019, the European Commission tabled a proposal concerning the amendment of the EU-MRV.
The main objective of the proposal was to amend the EU-MRV in order to take account of the new IMO DCS for fuel oil consumption.
The 80th session of the IMO’s Marine Environment Protection Committee (“MEPC 80”) adopted a revised GHG Strategy. The re-
vised strategy aims to significantly curb GHG emissions from international shipping. The revised strategy now aims for reducing
well-to-wake GHG emissions by 20%, striving for 30% in 2030 and then 70%, striving for 80%, in 2040 compared to 2008, and
reach net-zero by or around, i.e. close to, 2050. There is also a 2030 target to achieve an uptake of zero or near-zero GHG emis-
sions technologies, fuels and/or energy sources, representing at least 5%, striving for 10%, of the energy used by international
shipping. The GHG Strategy now also addresses life-cycle GHG emissions from shipping, with the overall objective of reducing GHG
emissions within the boundaries of the energy system of international shipping and preventing a shift of emissions to other sectors.
To ensure that shipping reaches these ambitions, the IMO has decided to implement a basket of measures consisting of two parts;
Firstly, a technical element which will be a goal-based marine fuel standard regulating the phased reduction of marine fuel GHG
intensity;
Secondly, an economic element which will be some form of a maritime GHG emissions pricing mechanism, potentially linked di-
rectly to the GHG intensity mechanism. The development of the measures will continue at the IMO and will, according to the agreed
timeline, be adopted in 2025 and enter into force around mid-2027.
MEPC 80 adopted the Guidelines on Life Cycle GHG Intensity of Marine Fuels (the “LCA Guidelines”), which set out methods for
calculating well-to-wake and tank-to-wake GHG emissions for all fuels and other energy carriers (e.g. electricity) used on board
a ship. These guidelines also specify sustainability topics/aspects for marine fuels and define a Fuel Lifecycle Label (“FLL”) that
collects and conveys the information relevant for the life cycle assessment. Preliminary default emissions factors for various
fuels and fuel pathways are provided, but these factors will be further reviewed. These guidelines do not include any provision for
application or requirements; they are intended to support the GHG Fuel Standard under development. The IMO guidelines will be
kept under review and developed further in the coming years, in particular focusing on default emissions factors, sustainability
criteria, fuel certification and handling of on-board carbon capture.
The globally applicable IMO DCS system, currently runs in parallel with the EU-MRV, thus duplicating regulation for shipping com-
panies whose ships sail both inside and outside the EU. The EU recently included international carbon emissions from the maritime
sector in the EU Emissions Trading System (the “EU ETS”). These monitoring and reporting processes adopted by the EU-MRV and
the IMO DCS regulations is considered to be part of a market-based mechanism for a carbon tax to be adopted.
A series of amendments to the EU-MRV were made on May 10, 2023 to harmonize the regulation with the new EU ETS. As of
January 1, 2024, the EU-MRV includes methane (CH4) and nitrous oxide (N2O), which shipping companies are required to report
in addition to CO2 emissions, using the new THETIS MRV module. Additionally, companies are required to submit a revised moni-
toring plan by April 1, 2024, which will need to be approved by the responsible Administering Authority after being reviewed by
a verifier. The European Commission published a list specifying which Administering Authority is responsible for each shipping
company in February 2024; this list will be revised on a biannual basis. Moreover, starting in 2025, shipping companies will be
required to submit by March 31 of each year an emissions report for the previous year for each of their ships to the responsible
Administering Authority, the flag state and the European Commission, which will need to have been deemed satisfactory by an
accredited verifier. We are monitoring all emissions as required by the amended regulations and have submitted a revised moni-
toring plan for all our vessels. We are also preparing the required reports for the Administering Authority, the various flag states
and the European Commission. Concurrently we are cooperating with a accredited verifier to ensure their approval.
On June 22, 2022, the European Union revised proposed amendments to regulation 2015/757. There is some disagree-
ment between the European Council and Commission on the one hand and the European Parliament on the other one how soon
the measures should be enacted for intra-EU and international shipments, as well as with respect to whether there should be
certain carve-outs for member states heavily dependent on shipping and for insular or coastal regions. Nevertheless, and re-
gardless of these particulars, the proposed amendments would effectively impose an EU ETS on Marine Shipping going through
ports or routes under the E.U.’s regulatory jurisdiction. If adopted, these amendments would impose an additional regulatory
burden on us to ensure that our vessels meet the requirements of the revised EU-MRV, as well as potential additional costs
related to the ETS.
The MEPC has adopted the EEDI for newbuild vessels, which requires a minimum energy efficiency level per capacity mile (e.g.,
tonne mile) for different vessel type and size segments, mandating an up to 30% improvement in design performance depending
on vessel type and size. The EEDI provides a specific figure for an individual vessel design, expressed in grams of CO2 per ship’s
capacity-mile (the smaller the EEDI the more energy efficient vessel design) and is calculated by a formula based on the technical
design parameters for a given ship. Since January 1, 2013, following an initial two year EEDI Phase 0, new vessel design need to
meet the reference level for their vessel type. The CO2 reduction level (grams of CO2 per tonne mile) for Phase 1 was set to 10%
and will be tightened every five years (20% for Phase 2 and 30% for Phase 3) to keep pace with technological developments of
new efficiency and reduction measures. Reduction rates have been established until the period 2025 and onwards (Phase 3) when
a 30% reduction is mandated for applicable ship types calculated from a reference line representing the average efficiency for
ships built between 2000 and 2010. Furthermore, research is conducted to identify and develop alternative fuels (e.g., ammonia,
hydrogen, methanol, biofuels) to replace fossil fuels in future newbuild designs that will be able to meet the more stringent GHG
regulations 2030 onwards, including as interim solution propulsion by dual fuel engines using liquified natural gas with HSFO or
VLSFO. MEPC 80 agreed on a circular providing a common approach to account for the use of biofuels under Regulations 26, 27
and 28 of MARPOL Annex VI (DCS and CII).
Like the EEDI, the ‘Energy Efficiency Existing Ship Index’ (“EEXI”) is a technical or ‘design’ efficiency index which requires a vessel
to achieve a required level of technical efficiency (Required EEXI) under specified reference conditions. Compliance is determined
by the vessel’s design and arrangements. This means an attained EEXI can only be changed through alterations to the vessel’s
design or machinery and not day to day operational action such as speed reduction or reduced cargo. In its simplest form, the
attained EEXI is the vessel’s grams of CO2 emitted per capacity tonne mile under the ship specific reference conditions. This is a
function of the installed engine power (kW), the specific fuel consumption of the main and auxiliary engines and a carbon factor
representing the conversion of fuel to CO2, vessel capacity and vessel reference speed. The Required EEXI is the vessel’s required
maximum grams of CO2 emitted by the vessel per capacity dwt tonne mile under reference conditions, given its type and capacity.
To comply with the regulation, the attained EEXI for a vessel must be less than or equal to the Required EEXI.
The EEDI phases for newbuild vessels and its retroactive application of the EEDI to all existing and in service cargo above a certain
size, known as the EEXI, sets new technical efficiency standard for existing ships. This will impose a requirement equivalent to
EEDI Phase 2 or 3 (with some adjustments) to all existing ships regardless of year of build and is intended an a one-off certifica-
tion. This regulation entered into force on January 1, 2023. Demonstration of compliance is required by the vessel’s first survey
for the issue or endorsement of the International Air Pollution Prevention Certification, following entry into force. In addition to
the current EEDI Phase 3, a possible Phase 4 can be introduced later this decade, further tightening requirements for newbuilds.
Furthermore, a mandatory Carbon Intensity Indicator (“CII”) – e.g., Annual Efficiency Ratio – grams of CO2 per dwt-mile, and rating
scheme was introduced on January 1, 2023, where all cargo vessels above 5,000 GT are given a rating of A to E every year. The
rating thresholds will become increasingly stringent towards 2030. For ships that achieve a D rating for three consecutive years
or an E rating, a corrective action plan needs to be developed as part of the Ship Energy Efficiency Management Plan (“SEEMP”)
and approved. Technical specifications regarding baselines, methods of calculations and ship-specific requirements were estab-
lished through guidelines to be finalized and approved at MEPC. The USCG plans to develop and propose regulations to implement
these provisions in the United States.
In addition, the SEEMP will be strengthened (Enhanced SEEMP) to include mandatory content, such as an implementation plan on
how to achieve the CII targets, and making it subject to approval. These new requirements for existing ships will be reviewed by
the end of 2025, with particular focus on the enforcement of the carbon intensity rating requirements.
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GHG reduction measures adopted, or further additional measures to be adopted by the IMO, EU and other jurisdictions for reach-
ing 2030 goals may impose operational and financial restrictions, carbon tax or an emission trading system on less efficient
vessels starting from 2023, gradually affecting younger vessels, even newbuilds after 2030, reducing their trade and competi-
tiveness, increasing their environmental compliance costs, imposing additional energy efficiency investments, or even making
such vessels obsolete. This or other developments may result in financial impacts on our operations that we cannot predict with
certainty at this time, which could have a material adverse effect on our business, financial condition and results of operations.
The IMO received numerous submissions related to its ongoing revision of the Initial IMO Strategy on Reduction of GHG Emissions
from Ships (MEPC.304(72)). Member States extensively discussed the revision of ambition levels of the Initial Strategy towards
decarbonization of shipping. The 2030 and 2050 revised targets are still being discussed, along with additional intermediate
checkpoint leading up to 2050. The revision of the Initial Strategy was further discussed in the Intersessional Working Group on
GHG Reduction (ISWG-GHG 14 in March 2023), and a Revised Strategy was adopted at MEPC 80 (July 2023). Pursuant to this,
IMO member states agreed to revise their initial goals to meet the objectives of the Paris Agreement. Namely, the Revised Strategy
aims to reach net-zero GHG emissions by or around 2050, while also establishing “indicative checkpoints” that call for reducing
total GHG emissions by 20% (while striving for 30%) by 2030 and 70% (while striving for 80%) by 2040, both relative to 2008.
In response to the above GHG environmental regulations we monitor CO2 vessel emissions pursuant to the IMO DCS and EU-MRV,
assessing in parallel the applicability of relevant energy efficiency measures. Furthermore, we pursue a fleet renewal strategy
having sold eleven of our older or Chinese built less efficient vessels the last three years, and placed orders for the acquisition of
16 dry-bulk newbuild vessels, including two methanol dual-fueled, with EEDI complying with IMO Phase 3 requirements, nine of
which have already been delivered to us, and implementing environmental upgrades in the existing fleet.
The European Parliament and Council have come to an agreement on the revision of the EU ETS, Directive 2003/87/EC, intro-
ducing the extension to maritime transport which initiated January 1, 2024. The EU ETS is a cornerstone of the EU’s policy to
combat climate change and its key tool for reducing greenhouse gas emissions cost-effectively. On July 14, 2021, the European
Commission adopted a series of legislative proposals setting out how it intends to achieve climate neutrality in the EU by 2050,
including the intermediate target of an at least 55% net reduction in greenhouse gas emissions by 2030. The package proposes
to revise several pieces of EU climate legislation, including the EU ETS.
The overall volume of greenhouse gases that can be emitted by industry sectors covered by the EU ETS is limited by a ‘cap’ on the
number of emission allowances. Within the cap, companies receive or buy emission allowances, which they can trade as needed.
The cap decreases every year, ensuring that total emissions fall. Each allowance gives the holder the right to emit:
~ one tonne of carbon dioxide (CO2), or
~ the equivalent amount of other powerful greenhouse gases, nitrous oxide (N2O) and perfluorocarbons (PFCs).
In phase 3 of the EU ETS (2013-2020), the European Union-wide cap for stationary installations decreased each year by a linear
reduction factor of 1.74%. The 2013 cap was set on the basis of the average total quantity of allowances issued annually in
2008-2012. In phase 4 of the EU ETS (2021-2030), the cap on emissions continues to decrease annually at an increased annual
linear reduction factor of 2.2%. Amendments introduced to the EU ETS on April 25, 2023 set a new target of reducing emissions
by 62% of 2005 levels by 2030, raising the linear reduction factor to 4.3% for 2024-2027 and 4.4% for 2028-2030. The
amendments also provide for two rebasing of the cap, which would effect a reduction of 90 million allowances in 2024 and an ad-
ditional 27 million in 2026. The amendments also phase in maritime sector emission to the EU ETS, requiring shipping companies
to surrender 40% of allowances in 2024, 70% in 2025 and 100% in 2026. All emissions from intra-EU voyages and within EU
ports will be covered by the EU ETS, and 50% of the emissions for journeys to or from a non-EU country.
International credits are financial instruments that represent a tonne of CO2 removed or reduced from the atmosphere as a result
of an emissions reduction project. The annual procedure of monitoring, reporting and verification (MRV), together with all the
associated processes, is known as the ETS compliance cycle. Operators covered by the EU ETS are required to have an approved
monitoring plan for monitoring and reporting annual emissions. Every year, operators must submit an emissions report. The
data for a given year must be verified by an accredited verifier by March 31 of the following year. Once verified, operators must
surrender the equivalent number of allowances by April 30 of that year. Further to the above, reaching the EU’s climate goal of
reducing EU emissions by at least 55% by 2030 is a legal obligation under the European climate law. EU countries are working
on new legislation to achieve this goal and make the EU climate-neutral by 2050. In July 2021, EU tabled the ‘Fit for 55’ package
as a response to the requirements in the EU Climate Law to reduce Europe’s net greenhouse gas emissions by at least 55% by
2030 by 2030 compared to 1990 levels and to achieve climate neutrality in 2050.
The Fit for 55 package is a set of proposals to revise and update EU legislation and to put in place new initiatives with the aim of
ensuring that EU policies are into line with the climate goals agreed by the Council and the European Parliament. On July 2023, as
part of Fit for 55, the EU has completing the legislative procedure and adopted the FuelEU maritime initiative directed at the ship-
ping industry, with the goal to reduce the greenhouse gas intensity of the energy used on-board of ships by up to 80% by 2050.
The new rules promote the use of renewable and low-carbon fuels in shipping. FuelEU Maritime is the second part of the Fit for 55
package directed at the shipping industry which is coming to force on the January 1, 2025, apart from articles 8 and 9 which will
apply from 31 August 2024. The goal of FuelEU is to reduce GHG emissions of ships’ when travelling to, from or within the EU.
FuelEU takes into account all greenhouse gas emissions (not only CO2) from the entire supply chain (‘well-to-wake’) and aims to
increase the use of Renewable and Low-carbon Fuels (RLF).These fuels should represent 86-88% of the international maritime
transportation fuel mix by 2050 to contribute to the EU’s targets. The production and distribution are addressed in the Renewable
Energy Directive (RED) and the Alternative Fuels Infrastructure Directive (AFID) respectively. Additionally, FuelEU Maritime aims
to drive demand and mitigate competition between operators and ports during the fuel transition.
The FuelEU Maritime regulation contains the following main provisions:
~ measures to ensure that the greenhouse gas intensity of fuels used by the shipping sector will gradually decrease over
time, by 2% in 2025 to as much as 80% by 2050
~ a special incentive regime to support the uptake of the so-called renewable fuels of non biological origin (RFNBO) with a
high decarbonization potential
~ an exclusion of fossil fuels from the regulation’s certification process
~ an obligation for passenger ships and containers to use on-shore power supply for all electricity needs while moored at the
quayside in major EU ports as of 2030, with a view to mitigating air pollution in ports, which are often close to densely
populated areas
~ a voluntary pooling mechanism, under which ships will be allowed to pool their compliance balance with one or more other
ships, with the pool – as a whole - having to meet the greenhouse gas intensity limits on average
~ time limited exceptions for the specific treatment of the outermost regions, small islands, and areas economically highly
dependent on their connectivity
~ revenues generated from the regulation’s implementation (‘FuelEU penalties’) should be used for projects in support of the
maritime sector’s decarbonization with an enhanced transparency mechanism
~ monitoring of the regulation’s implementation through the Commission’s reporting and review process
These or other developments may result in financial impacts on our operations that we cannot predict with certainty at this time,
which could have a material adverse effect on our business, financial condition and results of operations.
Ballast Water Treatment System: In 2004 the IMO adopted the BWM Convention, implementing regulations calling for a phased
introduction of mandatory ballast water exchange requirements, to be replaced in time with mandatory concentration limits. The
BWM Convention took effect in September 2017. Many of the implementation dates in the BWM Convention had already passed
prior to its effectiveness, so that the period of installation of mandatory ballast water exchange requirements would be extremely
short, with several thousand ships a year needing to install BWTS. For this reason, on December 4, 2013, the IMO Assembly
passed a resolution revising the application dates of the BWM Convention so that they are triggered by the entry into force date
and not the dates originally in the BWM Convention. This, in effect, makes all vessels constructed before September 8, 2017
“existing vessels” and allows for the installation of a BWTS on such vessels at the first renewal survey following entry into force of
the convention. In July 2017, the implementation scheme was further changed to require vessels with International Oil Pollution
Prevention (“IOPP”) certificates expiring between September 8, 2017 and September 8, 2019 to comply at their second IOPP
renewal. By September 8, 2024, all vessels subject to the BWM Convention are required to have installed a ballast water treat-
ment system. Each vessel in our current fleet has been issued a Ballast Water Management Plan Statement of Compliance by the
classification society with respect to the applicable IMO regulations and guidelines. All our vessels are equipped with U.S. Coast
Guard approved BWTS except two vessels that still require certain additional upgrades.
Polar Code: In November 2014 and May 2015, the IMO’s Maritime Safety Committee and MEPC, respectively, each adopted
relevant parts of the International Code for Ships Operating in Polar Water (the “Polar Code”). The Polar Code entered into force
on January 1, 2017. The Polar Code covers design, construction, equipment, operational, training, search and rescue as well as
environmental protection matters relevant to ships operating in the waters surrounding the two poles. It also includes mandatory
measures regarding safety and pollution prevention as well as recommendatory provisions. Ships intending to operate in the ap-
plicable areas must have a Polar Ship Certificate. This requires an assessment of operating in said waters and includes operational
limitations, additional safety equipment and plans or procedures, necessary to respond to incidents involving possible safety or
environmental consequences. A Polar Water Operational Manual is also needed on board the ship for the owner, operator, master,
and crew to have sufficient information regarding the ship to assist in their decision-making process. The Polar Code applies to
new ships constructed after January 1, 2017. After January 1, 2018, ships constructed before January 1, 2017 are required
to meet the relevant requirements by the earlier of their first intermediate, or renewal survey. These requirements have not had
and we do not expect they will have a material effect on our operations.
Discharge of garbage: MARPOL Annex V seeks to reduce the amount of garbage being discharged into the sea from ships.
MARPOL Annex V generally prohibits the discharge of all garbage into the sea, except as provided. Under MARPOL Annex V,
garbage includes all kinds of food, domestic and operational waste, all plastics, cargo residues, incinerator ashes, cooking oil,
fishing gear, and animal carcasses generated during the normal operation of the ship and liable to be disposed of continuously
or periodically. The IMO adopted new guidelines in 2012 under the revised Annex V to MARPOL, which prohibit discharge of
garbage into the open sea, with certain exceptions, and require vessels to dispose of garbage at port garbage reception facili-
ties. These guidelines became effective in January 2013. These requirements have not had and we do not expect they will have
a material effect on our operations.
Discharges of oily substances, at sea: MARPOL Annex I covers all the fluids which contain oil and can be discharged overboard at
sea. The affirmed objective of MARPOL Annex I, which entered into force on 2nd October 1983, is to protect the marine environ-
ment through the complete elimination of pollution by oil and other damaging elements and to lessen the chances of accidental
discharge of any such elements. We comply with all provisions of MARPOL Annex I and regularly conduct reviews and inspections
to ensure such compliance on our vessels.
Discharges of sewage: MARPOL Annex IV contains a set of regulations regarding the discharge of sewage into the sea from ships,
including regulations regarding the ships’ equipment and systems for the control of sewage discharge, the provision of port recep-
tion facilities for sewage, and requirements for survey and certification. We comply with all provisions of MARPOL Annex IV and
regularly conduct reviews and inspections to ensure such compliance on our vessels.
Bunker Convention: In 2001, the IMO adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage (the
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“Bunker Convention”), which imposes strict liability on ship owners for pollution damage in jurisdictional waters of ratifying states
caused by discharges of bunker fuel. The Bunker Convention also requires registered owners of ships over 1,000 gross tons to
maintain insurance in specified amounts to cover their liability for relevant pollution damage. The Bunker Convention became
effective on November 21, 2008. Liability limits under the Bunker Convention were increased as of June 2015. With respect to
non-ratifying states, including the United States, liability for spills and releases of oil carried as bunker in ship’s bunkers typically
is determined by the national or other domestic laws in the jurisdiction where the events or damages occur. The IMO also adopted
a requirement, which became effective in 2011, that vessels traveling through the Antarctic region (waters south of latitude 60
degrees south) must use lower density fuel. This requirement has not had and we do not expect that it will have a material effect
on our operations, which do not involve Antarctic travel.
ISM Code: The operation of our vessels is also affected by the requirements set forth in the IMO’s International Safety Manage-
ment (“ISM”) Code. The ISM Code requires vessel owners or any other person, such as a manager or bareboat charterer, who has
assumed responsibility for the operation of a vessel from the vessel owner and on assuming such responsibility has agreed to take
over all the duties and responsibilities imposed by the ISM Code, to develop and maintain an extensive SMS that includes the adop-
tion of a safety and environmental protection policy setting forth instructions and procedures for safe operation and describing
procedures for dealing with emergencies. The ISM Code requires that vessel operators obtain a “Safety Management Certificate”
for each vessel they operate from the government of the vessel’s flag state. The certificate verifies that the vessel operates in
compliance with its approved SMS. Currently, our Managers have the requisite documents of compliance and safety management
certificates for each of the vessels in our fleet for which the certificates are required by the IMO. Our Managers are required to
renew these documents of compliance and safety management certificates every five years. Compliance is externally verified on
an annual basis for the Managers and between the second and third years for each vessel by the applicable flag state.
Although all our vessels are currently ISM Code-certified, such certification may not be maintained by all our vessels at all times.
Non-compliance with the ISM Code may subject such party to increased liability, invalidate existing insurance or decrease avail-
able insurance coverage for the affected vessels and result in a denial of access to, or detention in, certain ports. For example,
the U.S. Coast Guard and E.U. authorities have indicated that vessels not in compliance with the ISM Code will be prohibited from
trading in U.S. and E.U. ports.
The Maritime Labour Convention: The International Labour Organization’s Maritime Labour Convention was adopted in 2006
(the “MLC 2006”). The basic aims of the MLC 2006 are to ensure comprehensive worldwide protection of the rights of seafar-
ers (the MLC 2006 is sometimes called the Seafarers’ Bill of Rights) and, to establish a level playing field for countries and ship
owners committed to providing decent working and living conditions for seafarers, protecting them from unfair competition on the
part of substandard ships. The MLC 2006 was ratified on August 20, 2012, and all our vessels were certified by August 2013, as
required. The MLC 2006 requirements have not had, and we do not expect that they will have, a material effect on our operations.
U.S. Regulations
The U.S. Oil Pollution Act of 1990: OPA 90 established an extensive regulatory and liability regime for the protection of the
environment from oil spills and cleanup of oil spills. OPA 90 applies to discharges of any oil from a vessel, including discharges
of fuel and lubricants. OPA 90 affects all owners and operators whose vessels trade in the U.S., its territories and possessions or
whose vessels operate in U.S. waters, which includes the U.S.’ territorial sea and its two hundred nautical mile exclusive economic
zone. While our vessels do not carry oil as cargo, they do carry lubricants and fuel oil (“bunkers”), which subjects our vessels to
the requirements of OPA 90.
Under OPA 90, vessel owners, operators and bareboat charterers are “responsible parties” and are jointly, severally and strictly
liable (unless the discharge of pollutants results solely from the act or omission of a third party, an act of God or an act of war)
for all containment and clean-up costs and other damages arising from discharges, or threatened discharges, of pollutants from
their vessels, including bunkers.
OPA 90 preserves the right to recover damages under other existing laws, including maritime tort law.
Effective December 21, 2015, the U.S. Coast Guard adopted regulations that adjust the limits of liability of responsible parties
under OPA 90 and established a procedure for adjusting the limits for inflation every three years. Effective November 12, 2019,
those limits were adjusted to the greater of $1,200 per gross ton or $997,100 per non-tank vessel. On December 23, 2022, the
U.S. Coast Guard again adjusted those limits to the greater of $1,300 per gross ton or $1,076,000 per non-tank vessel. These lat-
est adjustments took effect on March 23, 2023. These limits of liability do not apply if an incident was directly caused by violation
of applicable U.S. safety, construction or operating regulations or by a responsible party’s gross negligence or willful misconduct,
or if the responsible party fails or refuses to report the incident or to cooperate and assist in connection with oil removal activities.
All owners and operators of vessels over 300 gross tons are required to establish and maintain with the U.S. Coast Guard evidence
of financial responsibility sufficient to meet their potential aggregate liabilities under OPA 90 and CERCLA, which is discussed
below. An owner or operator of a fleet of vessels is required only to demonstrate evidence of financial responsibility in an amount
sufficient to cover the vessel in the fleet having the greatest maximum liability under OPA 90 and CERCLA. We have complied with
these requirements by providing a financial guarantee evidencing sufficient self-insurance. We have satisfied these requirements
and obtained a U.S. Coast Guard certificate of financial responsibility for all of our vessels.
The U.S. Coast Guard’s regulations concerning certificates of financial responsibility provide, in accordance with OPA 90, that
claimants may bring suit directly against an insurer or guarantor that furnishes certificates of financial responsibility and that
the insurer or guarantor may only assert limited defenses. Certain organizations that had typically provided certificates of finan-
cial responsibility under pre-OPA 90 laws, including the major protection and indemnity organizations, have declined to furnish
evidence of insurance for vessel owners and operators if they are subject to direct actions or required to waive insurance policy
defenses. This requirement may limit the availability of coverage required by the U.S. Coast Guard and could increase our costs of
obtaining this insurance for our fleet, as well as the costs of our competitors that also require such coverage.
We currently maintain, for each of our vessels, oil pollution liability coverage insurance in the amount of $1.0 billion per incident.
Although our vessels carry a relatively small amount of bunkers, a spill of oil from one of our vessels could be catastrophic under
certain circumstances. We also carry hull and machinery protection and indemnity insurance to cover the risks of fire and explosion.
Losses as a result of fire or explosion could be catastrophic under some conditions. While we believe that our existing insurance
coverage is adequate, not all risks can be insured and there can be no guarantee that any specific claim will be paid, or that we will
always be able to obtain adequate insurance coverage at reasonable rates. If the damages from a catastrophic spill exceed our insur-
ance coverage, the payment of those damages could have a severe, adverse effect on us and could possibly result in our insolvency.
OPA 90 requires the owner or operator of any non-tank vessel of 400 gross tons or more that carries oil of any kind as a fuel for
main propulsion, including bunkers, to prepare and submit a response plan for each vessel. These vessel response plans include
detailed information on actions to be taken by vessel personnel to prevent or mitigate any discharge or substantial threat of such
a discharge of ore from the vessel due to operational activities or casualties. All of our vessels have U.S. Coast Guard-approved
response plans.
OPA 90 specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring
within their boundaries, and some states have enacted legislation providing for unlimited liability for oil spills. In some cases,
states which have enacted such legislation have not yet issued implementing regulations defining vessels owners’ responsibilities
under these laws. We intend to comply with all applicable state regulations in the ports where our vessels call.
The U.S. Comprehensive Environmental Response, Compensation, and Liability Act: CERCLA applies to spills or releases of
hazardous substances other than petroleum or petroleum products, whether on land or at sea. CERCLA imposes joint and several
liability, without regard to fault, on the owner or operator of a ship, vehicle or facility from which there has been a release, and on
other specified parties. Liability under CERCLA is generally limited to the greater of $300 per gross ton or $0.5 million per vessel
carrying non-hazardous substances ($5.0 million for vessels carrying hazardous substances), unless the incident is caused by
gross negligence, willful misconduct or a violation of certain regulations, in which case liability is unlimited. As described above,
owners and operators of vessels must establish and maintain with the U.S. Coast Guard evidence of financial responsibility suf-
ficient to meet their potential liabilities under CERCLA.
The U.S. Clean Water Act: The CWA prohibits the discharge of oil or hazardous substances in navigable waters and imposes strict
liability in the form of penalties for any unauthorized discharges. It also imposes substantial liability for the costs of removal,
remediation and damages and complements the remedies available under the more recently enacted OPA 90 and CERCLA, dis-
cussed above. The U.S. Environmental Protection Agency (“EPA”) regulates the discharge in U.S. ports of ballast water and other
substances incidental to the normal operation of vessels. Under EPA regulations, commercial vessels greater than 79 feet in
length are required to obtain coverage under the National Pollutant Discharge Elimination System (“NPDES”) the VGP to discharge
ballast water and other wastewater into U.S. waters by submitting a Notice of Intent (a “NOI”). The VGP requires vessel owners
and operators to comply with a range of best management practices and reporting and other requirements for a number of inci-
dental discharge types and incorporates current U.S. Coast Guard requirements for ballast water management, as well as supple-
mental ballast water requirements. We have submitted NOIs for our vessels operating in U.S. waters and anticipate incurring costs
to meet the requirements of the VGP. In addition, various states have enacted legislation restricting ballast water discharges and
the introduction of non-indigenous species considered to be invasive. These and any similar ballast water discharge restrictions
enacted in the future could increase the costs of operating in the relevant waters.
The 2013 VGP became effective in December 2013 and remains in effect during the implementation of the 2018 Vessel Incident
Discharge Act (the “VIDA”), as discussed below. The 2013 VGP requires most vessels to meet numeric ballast water discharge
limits on a staggered schedule based on the first dry docking after January 1, 2014, or January 1, 2016 (depending on vessel
ballast capacity). The 2013 VGP also imposes more strict technology-based limits in the form of best management practices for
discharges related to oil-to-sea interfaces and requires routine inspections, monitoring, reporting, and recordkeeping. The 2013
VGP also requires vessel modifications and the installation of ballast treatment equipment which will significantly increase the
cost of investments to comply with such requirements.
For the first time, the 2013 VGP contains numeric ballast water discharge limits for most vessels. The 2013 VGP also contains
more stringent effluent limits for oil to sea interfaces and exhaust gas scrubber washwater, which will improve environmental
protection of U.S. waters. The EPA has also improved the efficiency of several of the VGP’s administrative requirements, includ-
ing allowing electronic recordkeeping, requiring an annual report in lieu of the one-time report and annual noncompliance report,
and requiring small vessel owners and/or operators to obtain coverage under the VGP by completing and agreeing to the terms
of a Permit Authorization and Record of Inspection form. The 2013 vessel general permit requires the use of an environmentally
acceptable lubricant for all oil to sea interfaces for vessels or alternative seal systems, unless technically infeasible. The intent of
this new requirement is to reduce the environmental impact of lubricant discharges on the aquatic ecosystem by increasing the
use of environmentally acceptable lubricants for vessels operating in waters of the U.S. We believe all our vessels are in compli-
ance with the 2013 VGP.
On December 4, 2018, the VIDA was signed into law, establishing a new framework for the regulation of vessel incidental
discharges under the CWA. The VIDA requires the EPA to develop performance standards for those discharges within two years
of enactment and requires the U.S. Coast Guard to develop implementation, compliance and enforcement regulations within two
years of the EPA’s promulgation of standards. Under the VIDA, all provisions of the 2013 VGP will remain in force and effect
until the U.S. Coast Guard’s regulations are finalized. On October 26, 2020, the EPA published a Notice of Proposed Rulemaking
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– Vessel Incident Discharge National Standards of Performance in the Federal Register for public comment. The comment period
closed on November 25, 2020.
U.S. Air Emission Requirements: In 2008, the U.S. ratified the amended Annex VI of MARPOL, addressing air pollution from
ships, which went into effect in 2009. In December 2009, the EPA announced its intention to publish final amendments to the
emission standards for new marine diesel engines installed on ships flagged or registered in the U.S. that are consistent with
standards required under recent amendments to Annex VI of MARPOL. The regulations include near-term standards that began in
2011 for newly built engines requiring more efficient use of engine technologies in use today and long-term standards that began
in 2016 requiring an 80 percent reduction in nitrogen oxide emissions below current standards. The CAA also requires states to
adopt State Implementation Plans (“SIPs”) designed to attain air quality standards. Several SIPs regulate emissions resulting from
vessel loading and unloading operations by requiring the installation of vapor control equipment.
On November 1, 2022, amendments to MARPOL Annex VI adopted by the IMO came into effect. These “goal” or “performance-
based” amendments are both of a technical and an operational nature, and they require ships to improve their energy efficiency
with a view to reducing their greenhouse gas emissions, with a particular focus on carbon emissions. The U.S. Coast Guard is
working to implement the amended provisions of MARPOL Annex VI, chiefly through proposed rule 1625-AC78, which remains
at the proposed rule stage since its original publication in October of 2022. The amended MARPOL provisions and the rules pro-
posed by the U.S. Coast Guard to implement them, in addition to any other new or more stringent air emission regulations which
may be adopted could require significant capital expenditures to retrofit vessels and could otherwise increase our investment and
operating costs. On May 3, 2023, the U.S. Coast Guard announced that Policy Letter 21-01 and CVC-WI-014(1), which exempted
vessels from the engine requirements of MARPOL Annex VI, were to be cancelled on December 31, 2023. As such, starting from
January 1, 2024, all new engines installed on ships must comply with MARPOL Annex VI Reg 13 Tier III requirements. All engines
installed on our newly acquired vessels comply with these requirements.
Other Environmental Initiatives
The E.U. has adopted legislation that (1) requires member states to refuse access to their ports by certain substandard vessels,
according to vessel type, flag and number of previous detentions; (2) obliges member states to inspect at least 25.0% of vessels
using their ports annually and increase surveillance of vessels posing a high risk to maritime safety or the marine environment; (3)
provides the E.U. with greater authority and control over classification societies, including the ability to seek to suspend or revoke
the authority of negligent societies; and (4) requires member states to impose criminal sanctions for certain pollution events,
such as the unauthorized discharge of tank washings. It is also considering legislation that will affect the operation of vessels and
the liability of owners for oil pollution. While we do not believe that the costs associated with our compliance with these adopted
and proposed E.U. initiatives will be material, it is difficult to predict what additional legislation, if any, may be promulgated by the
E.U. or any other country or authority.
Several U.S. states, such as California, adopted more stringent legislation or regulations relating to the permitting and manage-
ment of ballast water discharges compared to EPA regulations. These requirements do not currently impact our operational costs,
as such technologies are not currently available. However if a decision is made to comply with such requirements, we could incur
additional investment during the installation of any such ballast water treatment plants.
On June 29, 2017, the Global Industry Alliance (the “GIA”) was officially inaugurated. The GIA is a program, under the Global
Environmental Facility-United Nations Development Program-IMO project, which supports shipping, and related industries, as they
move towards a low carbon future. Organizations including, but not limited to, ship owners, operators, classification societies, and
oil companies, signed to launch the GIA.
The China Maritime Safety Administration (the “China MSA”) issued the Regulation on Data Collection of Energy Consumption for
Ships in November 2018. This regulation is effective as of January 1, 2019 and requires ships calling on Chinese ports to report
fuel consumption and transport work details directly to the China MSA. This regulation also contains additional requirements for
Chinese-flagged vessels (domestic and international) and other non-Chinese-flagged international navigating vessels. In Novem-
ber 2022, the China MSA published an additional Regulation of Administrative Measures of Ship Energy Consumption Data and
Carbon Intensity, which came into effect on December 22, 2022. This regulation was essentially enacted to implement MARPOL
Annex VI to Chinese-flagged vessels, though a few of its provisions also apply to foreign ships with a gross tonnage of at least 400
entering and exiting Chinese ports. This Regulation essentially applies more stringent rules around that collection and reporting
of data related to ships’ energy consumption, as is already required by the 2018 regulation.
On October 23, 2023, the China MSA published a circular modifying its monitoring and inspection requirements for vessels listed
as being subject to intensified monitoring and inspection. Having entered into effect on December 1, 2023, the circular overrides
2013 rules to expand the kinds of vessels that can be entered into the list, while also authorizing provincial-level MSA offices
to enter vessels parallel to the China MSA’s existing authority. The rules as modified no longer distinguish between Chinese and
foreign vessels, while conditions have been established to remove a vessel from the list. Currently, The Company has no vessels on
the list in question, and it monitors compliance with applicable rules and regulations to avoid any such entry. However, regardless
of its efforts, it is still the case that any number of the Company’s vessels could end up being entered into the list, as a result of
how the China MSA may choose to amend its rules regarding what vessels may be entered into the list. Such an event would result
in heightened monitoring, inspection and compliance costs, as well as associated delays in the vessels’ operations.
The United States is currently experiencing changes in its environmental policy, the results of which have yet to be fully deter-
mined. For example, in April 2017, the U.S. President signed an executive order regarding the environment that targets the United
States’ offshore energy strategy, which affects parts of the maritime industry and may affect our business operations. In 2021,
the United States announced its commitment to working with the IMO to adopt a goal of achieving zero emissions from interna-
tional shipping by 2050. Additional legislation or regulation applicable to the operation of our ships that may be implemented in
the future could negatively affect our profitability.
Inventory of Hazardous Materials
Hong Kong Convention: On May 15, 2009, the IMO adopted the Hong Kong International Convention for the Safe and Environmentally
Sound Recycling of Ships, 2009 (the “Hong Kong Convention”). The Hong Kong Convention will enter into force two years after it has
been ratified by IMO member states states representing at least 40% of the world fleet. The convention was signed by 67 member
states of the IMO, and will enter into force on June 26, 2025, following the fulfillment of the ratification criteria by Bangladesh and
Liberia in June 26, 2023. One of the key requirements of the Hong Kong Convention will be for ships over 500 gross tonnes operating
in international waters to maintain an Inventory of Hazardous Materials (an “IHM”). Only warships, naval auxiliary and governmental,
non-commercial vessels are exempt from the requirements of the Hong Kong Convention. The IHM has three parts:
~ Part I - hazardous materials inherent in the ship’s structure and fitted equipment;
~ Part II - operationally generated wastes; and
~ Part III - stores.
Once the Hong Kong Convention has entered into force, each new and existing ship will be required to maintain Part I of IHM.
We have established policies to ensure that each of our vessels covered by the Convention will maintain an accurate and up to
date IHM. We are working actively with shipyards constructing our newbuilds on order to ensure that the vessels will be properly
equipped with an IHM.
E.U. Ship Recycling Regulation: On November 20, 2013, the E.U. adopted Regulation (EU) No 1257/2013 (the “E.U. Ship Re-
cycling Regulation”), which seeks to facilitate the ratification of the Hong Kong Convention and sets forth rules relating to vessel
recycling and management of hazardous materials on vessels. In addition to new requirements for the recycling of vessels, the
E.U. Ship Recycling Regulation contains rules for the control and proper management of hazardous materials on vessels and pro-
hibits or restricts the installation or use of certain hazardous materials on vessels. The E.U. Ship Recycling Regulation applies to
vessels flying the flag of an E.U. member state and certain of its provisions apply to vessels flying the flag of a third country calling
at a port or anchorage of a member state. For example, when calling at a port or anchorage of a member state, a vessel flying the
flag of a third country will be required, among other things, to have on board an IHM that complies with the requirements of the
E.U. Ship Recycling Regulation and the vessel must be able to submit to the relevant authorities of that member state a copy of a
statement of compliance issued by the relevant authorities of the country of the vessel’s flag verifying the inventory. The E.U. Ship
Recycling Regulation took effect on non-E.U.-flagged vessels calling on E.U. ports of call beginning as of December 31, 2020.
Vessel Security Regulations
Several initiatives have been implemented to enhance vessel security. On November 25, 2002, the Maritime Transportation
Security Act of 2002 (the “MTSA”) came into effect. To implement certain portions of the MTSA, the U.S. Coast Guard issued reg-
ulations in July 2003 requiring the implementation of certain security requirements aboard vessels operating in waters subject
to the jurisdiction of the U.S. Similarly, in December 2002, amendments to SOLAS created a chapter of the convention dealing
specifically with maritime security. This chapter came into effect in July 2004 and imposes various detailed security obligations
on vessels and port authorities, most of which are contained in the International Ship and Port Facilities Security Code (the “ISPS
Code”). Among the various requirements are:
~ on-board installation of automatic information systems to enhance vessel-to-vessel and vessel-to-shore communications;
~ on-board installation of ship security alert systems;
~ the development of vessel security plans; and
~ compliance with flag state security certification requirements.
The U.S. Coast Guard regulations, intended to align with international maritime security standards, exempt non-U.S. vessels from
MTSA vessel security measures, provided such vessels have on board a valid “International Ship Security Certificate” that attests
to the vessel’s compliance with SOLAS security requirements and the ISPS Code. We have implemented the various security mea-
sures addressed by the IMO, SOLAS and the ISPS Code, and we have approved ISPS certificates and plans on board all our vessels,
which have been certified by the applicable flag state.
Cyber Security
Recent action by the IMO’s Maritime Safety Committee and U.S. agencies indicate that cyber security regulations for the maritime
industry are likely to be further developed in the near future in an attempt to combat cyber security threats. The Maritime Safety
Committee, at its 98th session in June 2017, adopted Resolution MSC.428(98) - Maritime Cyber Risk Management in Safety
Management Systems. The resolution encouraged administrations to ensure that cyber risks are appropriately addressed in exist-
ing safety management systems (as defined in the ISM Code) no later than the first annual verification of the company’s Document
of Compliance after January 1, 2021. In response to the above cyber security resolution we performed a cyber security risk as-
sessment for our vessels and implemented next generation firewall and incident reporting for the majority of the vessels in our
fleet, while we are in the process of concluding such implementation for the remaining vessels. We also incorporated the cyber
risk management system into the ship management system (SMS) for all vessels in our fleet.
Regulations on the Economic Substance Situation of the Marshall Islands
On January 1, 2019, the Economic Substance Regulations (ESRs), adopted by the Republic of the Marshall Islands, entered
into force. ESRs apply to all non-resident entities based in the Marshall Islands and to foreign shipping entities registered in the
SAFEBULKERS
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ANNUAL REPORT 2023
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Marshall Islands that meet the definition of “relevant entity” and derive income from “related activity”. The term “relevant entity”
according to the ESRs includes any non-domestic entity based in the Marshall Islands or a “foreign maritime entity” established
under Marshall Islands law which is centrally managed and controlled outside the Marshall Islands and is a taxable entity of a state
other than the Marshall Islands. The term “relevant activity” according to the ESRs refers to certain restrictively mentioned activi-
ties, including “shipping” and “holding business”, which may apply to us and our Subsidiaries governed by the law of the Marshall
Islands. According to the ESRs, for each annual reporting period, each relevant entity that earns income from a related activity
should demonstrate in the context of an audit of its financial position that (i) its administration and management in relation to
the relevant activity is carried out on Marshall Islands, (ii) its main business-related activity is in the Marshall Islands (although
regulators understand and recognize that the core income-generating activities of shipping companies generally take place in
international waters), and (iii) (a) has a sufficient amount of expenditure in the Marshall Islands, (b) has a sufficient physical pres-
ence in the Marshall Islands, and (c) has a sufficient number of qualified employees in the Marshall Islands, taking into account the
size of the relevant activities in the Marshall Islands. As of July 1, 2020, all non-resident entities based in the Marshall Islands
and the foreign shipping entities of the Marshall Islands are required to submit a declaration of financial status within twelve
(12) months of their anniversary. The statement of financial situation is submitted to the corporate register on an annual basis.
If the Corporate Registry finds that an entity does not meet the financial status criteria for the relevant reporting period, it will
issue a non-compliance notice and impose penalties, which will be described in the notice. Penalties can range from fines of up
to $ 100,000 and / or revocation of the entity’s founding documents and dissolution. We intend to comply with all relevant ESR
reporting requirements.
Coronavirus Outbreak
As of March 2020, the outbreak of Covid-19 was declared a pandemic by the World Health Organization. Covid-19 has resulted
in globally reduced industrial activity with lower demand for cargoes such as iron ore and coal, contributing to lower drybulk rates
in 2020. The outbreak of Covid-19 in China and other countries in early 2020, led to a number of countries, ports and organiza-
tions to take measures against its spread, such as quarantines and restrictions on travel. Such measures were taken initially in
Chinese ports, where we conduct a large part of our operations, and gradually expanded to other countries globally covering most
ports where we conduct business. Presently, travel restrictions have been eased. If the pandemic continues within 2024 and
similar restrictive measures are adopted for its control, delays may be expected in relation to the deliveries of our newbuilds and
our newbuild program, which will affect our results of operations and our financial condition.
The extent and duration to which the severity and transmission rate of the various new Covid-19 types, the extent to which vac-
cines are available to our crew, the effectiveness of the containment actions taken, including travel and cargo restrictions, and the
impact of these and other factors on the shipping industry as a whole may not be not possible to ascertain. However, the occur-
rence of any of the foregoing events or other epidemics or an increase in the severity or duration of new Covid-19 types and any
new virus wave, could have a material adverse effect on our business, results of operations, cash flows, financial condition, value
of our vessels, and our ability to pay dividends.
Disclosure of Activities Pursuant to Section 13(r) of the U.S. Securities Exchange Act of 1934
Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 added Section 13(r) to the Exchange Act. Section
13(r) requires an issuer to disclose whether it or any of its affiliates knowingly engaged in certain activities, transactions or deal-
ings relating to Iran. Disclosure is required even where the activities, transactions or dealings are conducted in compliance with
applicable law. Provided in this section is information concerning the activities of us and our affiliates that occurred in 2023 and
which we believe may be required to be disclosed pursuant to Section 13(r) of the Exchange Act.
In 2023, our vessels did not make any port calls to Iran.
Our charter party agreements for our vessels restrict the charterers from calling in Iran in violation of E.U., U.S. or United Nation
sanctions and that has not been authorized by the Office of Foreign Assets Control of the U.S. Department of the Treasury. There
can be no assurance that our vessels will not, from time to time in the future on charterer’s instructions, perform voyages which
would require disclosure pursuant to Exchange Act Section 13(r).
On January 16, 2016, the U.S. and the E.U. lifted nuclear-related sanctions on Iran through the implementation of the Joint
Comprehensive Plan of Action (“JCPOA”) among the P5+1 (China, France, Germany, Russia, the U.K. and the U.S.), the E.U. and
Iran to ensure that Iran’s nuclear program will be exclusively peaceful. All activities, transactions and dealings reported in this
section occurred after the implementation of the JCPOA. However, U.S. nuclear-related sanctions have been re-imposed effective
August 7, 2018 and November 5, 2018 as a result of the withdrawal of the U.S. from the JCPOA. We may charter our vessels
to charterers and sub-charterers, including, as the case may be, Iran-related parties, who may make, or may sublet the vessels to
sub-charterers who may make, port calls to Iran, so long as the activities continue to be permissible and not sanctionable under
applicable U.S. and E.U. and other applicable laws.
Seasonality
We operate our vessels in markets that have historically exhibited seasonal variations in demand and, as a result, in charter rates.
Seasonality is related to several factors and may result in quarter-to-quarter volatility in our results of operations, which could
affect the amount of dividends, if any, that we pay to our shareholders. For example the market for marine drybulk transportation
services is typically stronger in the fall months in anticipation of increased consumption of coal in the northern hemisphere dur-
ing the winter months and the grain export season from North America. Similarly, the market for marine drybulk transportation
services is typically stronger in the spring months in anticipation of the South American grain export season due to increased
distance traveled known as ton mile effect, as well as increased coal imports in parts of Asia due to additional electricity demand
for cooling during the summer months. Demand for marine drybulk transportation services is typically weaker at the beginning of
the calendar year and during the summer months. In addition, unpredictable weather patterns during these periods tend to disrupt
vessel scheduling and supplies of certain commodities.
C. Organizational Structure
Safe Bulkers, Inc. is a holding company with 70 subsidiaries, 23 of which are incorporated in Liberia, 46 in the Republic of the
Marshall Islands and 1 in the Republic of Cyprus, each as of February 16, 2024. Our subsidiaries are ultimately wholly-owned by
us. A list of our subsidiaries as of February 16, 2024 is set forth in Exhibit 8.1 to this annual report.
D. Property, Plant and Equipment
We have no freehold or material leasehold interest in any real property. We occupy office space at Apt. D11, Les Acanthes, 6,
Avenue des Citronniers, MC98000 Monaco, where our principal executive office is established. We also occupy office space at
5th floor, 61 rue du Rhone, 1204, Geneva, Switzerland, where a representation office is established. Other than our vessels, we
do not have any material property. Certain of our vessels are subject to priority mortgages, which secure our obligations under
our various credit facilities. For further details regarding our credit facilities, see “Item 5. Operating and Financial Review and
Prospects—B. Liquidity and Capital Resources—Credit Facilities.”
ITEM 4A.
UNRESOLVED STAFF COMMENTS
None.
ITEM 5.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion of our financial condition and results of operations should be read in conjunction with the financial state-
ments and the notes to those statements included elsewhere in this annual report. This discussion includes forward-looking state-
ments that involve risks and uncertainties. As a result of many factors, such as those set forth under “Item 3. Key Information—D.
Risk Factors” and elsewhere in this annual report, our actual results may differ materially from those anticipated in these forward-
looking statements. Please see the section “Forward-Looking Statements” at the beginning of this annual report.
Overview
Our business is to provide international marine drybulk transportation services by operating vessels in the drybulk sector of the
shipping industry. We deploy our vessels on a mix of period time and spot time charters according to our assessment of market
conditions, adjusting the mix of these charters to take advantage of the relatively stable cash flow and high utilization rates asso-
ciated with period time charters, or to profit from attractive spot time charter rates during periods of strong charter market condi-
tions, or to maintain employment flexibility that the spot market offers during periods of weak time charter market conditions. We
believe our customers, some of which have been chartering our vessels for over 26 years, enter into period time and spot time
charters with us because of the quality of our modern vessels and our record of safe and efficient operations.
Our Managers
Our operations are managed by our Managers, Safety Management, Safe Bulkers Management Ltd., and Safe Bulkers Manage-
ment Monaco, under the supervision of our executive officers and our board of directors. Under our Management Agreements,
our Managers provide us with technical, administrative and commercial services and our executive management. All three of our
Managers are controlled by Polys Hajioannou. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party
Transactions—Management Agreements” for more information.
Selected Financial Data
The following table presents selected consolidated financial and other data of Safe Bulkers, Inc. for each of the five years in the five
year period ended December 31, 2023. The selected consolidated financial data of Safe Bulkers, Inc. is a summary of, is derived
from, and is qualified by reference to, our audited consolidated financial statements and notes thereto, which have been prepared
in accordance with United States (the “U.S.”) generally accepted accounting principles (“U.S. GAAP”).
Our audited consolidated statements of income, shareholders’ equity and cash flows for the years ended December 31, 2021,
2022 and 2023 and the consolidated balance sheets at December 31, 2022 and 2023, together with the notes thereto, are
included in “Item 18. Financial Statements” and should be read in their entirety.
The historical results included below and elsewhere in this document are not necessarily indicative of our future performance.
SAFEBULKERS
60
ANNUAL REPORT 2023
61
Year Ended December
2019
2020
2021
2022
2023
(in thousands of U.S. dollars except share data)
$
$
206,682 $
206,035 $
343,475 $
364,050 $
295,393
(8,921)
(7,877)
(14,444)
(14,332)
(10,992)
197,761 $
198,158 $
329,031 $
349,718 $
284,401
(13,715)
(68,569)
(50,310)
(41,582)
(70,086)
(54,269)
(18,050)
(2,589)
(18,884)
(2,618)
(63)
(414)
—
—
(241)
—
(9,753)
(72,049)
(52,364)
(19,221)
(3,277)
7,470
(9,969)
(80,211)
(49,518)
(17,723)
(4,079)
—
—
(3,570)
11,579
—
(21,666)
(89,201)
(54,129)
(19,199)
(4,564)
—
(1,869)
10,375
$
44,051 $
10,478 $
191,416 $
184,648 $
104,148
(26,815)
(21,233)
(14,719)
(714)
1,558
(121)
(76)
(1,845)
(641)
604
(1,303)
916
(1,726)
(798)
69
2,188
(910)
(2,898)
(17,138)
(1,353)
783
8,723
(1,101)
(2,008)
(24,707)
(756)
2,497
523
(1,873)
(2,481)
16,038 $
(12,905) $
174,348 $
172,554 $
77,351
0.04
(0.25)
—
2.00
2.00
—
2.00
2.00
1.44
—
2.00
2.00
1.36
0.20
2.00
2.00
0.61
0.20
2.00
2.00
101,686,312
102,617,944
113,716,354
120,653,507
113,619,092
STATEMENT OF OPERATIONS
Revenues
Commissions
Net revenues
Voyage expenses
Vessel operating expenses
Depreciation and amortization
General and administrative expenses
Management fee to related parties
Company administration expenses
Early redelivery (cost)/income, net
Other operating costs
Gain on sale of assets
Operating income
Interest expense
Other finance costs
Interest income
(Loss)/gain on derivatives
Foreign currency (loss)/gain
Amortization and write-off of
deferred finance charges
Net income/(loss)
Earnings/(loss) per share of Common
Stock, basic and diluted
Cash dividends declared
per share of Common Stock
Cash dividends declared
per share of Preferred C Shares
Cash dividends declared
per share of Preferred D Shares
Weighted average number of shares
of Common Stock outstanding, basic
and diluted
$
$
$
$
$
OTHER FINANCIAL DATA
Net cash provided
by operating activities
Net cash (used in)/provided
by investing activities
Net cash provided by/(used in)
financing activities
Net increase/(decrease) in cash and
cash equivalents and restricted cash
2019
2020
Year Ended December
2021
(in thousands of U.S. dollars)
2022
2023
$
58,284 $
63,376 $
217,208 $
218,046 $
122,207
(36,785)
(34,784)
8,554
(229,404)
(151,726)
8,540
(9,293)
(225,906)
(40,101)
29,141
30,039
19,299
(144)
(51,459)
(378)
BALANCE SHEET DATA
Total current assets
Total fixed assets
Year Ended December
2019
2020
2021
2022
2023
(in thousands of U.S. dollars)
135,989
134,734
124,116
157,701
146,721
964,000
951,290
952,813
1,077,400
1,181,221
Other non-current assets
14,654
19,605
17,391
10,817
11,874
Total assets
1,114,643
1,105,629
1,094,320
1,245,918
1,339,816
Total current liabilities
86,784
104,715
88,692
91,317
55,733
Long-term debt, net of current por-
tion and of deferred finance charges
Total liabilities
Mezzanine equity
536,995
531,883
315,796
370,806
482,391
624,701
642,770
415,080
474,002
547,305
Common stock, $0.001 par value
104
102
17,200
18,112
—
122
—
119
—
112
Total shareholders’ equity
472,742
444,747
679,240
771,916
792,511
Total liabilities
and shareholders’ equity
1,114,643
1,105,629
1,094,320
1,245,918
1,339,816
A. Operating Results
Our operating results are largely driven by the following factors:
~ Ownership days. We define ownership days as the aggregate number of days in a period during which each vessel in our
fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount
of revenues and the amount of expenses that we record during a period.
~ Available days. We define available days (also referred to as voyage days) as the total number of days in a period during
which each vessel in our fleet was in our possession net of off-hire days associated with scheduled maintenance, which in-
cludes major repairs, drydockings, vessel upgrades or special or intermediate surveys. Available days are used to measure
the number of days in a period during which vessels should be capable of generating revenues.
~ Operating days. We define operating days as the number of our available days in a period less the aggregate number of
days that our vessels are off-hire due to any reason, excluding scheduled maintenance. Operating days are used to measure
the aggregate number of days in a period during which vessels actually generate revenues.
~ Fleet utilization on ownership days. We calculate fleet utilization on ownership days by dividing the number of our operat-
ing days during a period by the number of our ownership days during that period. This measure demonstrates the percent-
age of time in the relevant period our vessels generate revenue. During the three years ended December 31, 2023, our
average annual fleet utilization on ownership days rate was approximately 96.50%.
~ Fleet utilization on available days. We calculate fleet utilization on available days by dividing the number of operating
days by the number of our available days during that period. Fleet utilization is used to measure a company’s ability to ef-
ficiently find suitable employment for its vessels and minimize the number of days that its vessels are off-hire for reasons
such as scheduled repairs, vessel upgrades, drydockings or special surveys. During the three years ended December 31,
2023, our average annual fleet utilization on available days rate was approximately 98.60%.
~ Time charter equivalent rates. We define time charter equivalent rates (“TCE rates”) as our revenues less commissions
and voyage expenses during a period divided by the number of our available days during the period. TCE rate is a standard
shipping industry performance measure used primarily to compare daily earnings generated by vessels on period time
charters and spot time charters with daily earnings generated by vessels on voyage charters, because charter rates for
vessels on voyage charters are generally not expressed in per day amounts, while charter rates for vessels on period time
charters and spot time charters generally are expressed in such amounts. The TCE rate is a non-GAAP measure. We believe
the TCE rate provides additional meaningful information because it assists our management in making decisions regard-
ing the deployment and use of our vessels. We use TCE to compare period-to-period changes in our performance despite
changes in the mix of charter types and management believes that the TCE rate assists investors and our management in
evaluating our financial performance. We have only rarely employed our vessels on voyage charters and, as a result, gener-
ally our TCE rates approximate our time charter rates.
The following table reflects our revenues, commissions, voyage expenses, time charter equivalent revenue, available days and
time charter equivalent rate for the periods indicated:
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ANNUAL REPORT 2023
63
Revenues
Less commissions
Less voyage expenses
Time charter equivalent revenue
Available days
Time charter equivalent rate
Year Ended December 31,
2022
2023
(in thousands of U.S. dollars except available
days and time charter equivalent rate)
$
$
$
364,050
14,332
9,969
339,749
14,959
22,712
$
$
$
295,393
10,992
21,666
262,735
15,847
16,579
~ Daily vessel operating expenses. We define vessel operating expenses to include the costs for crewing, insurance, lubri-
cants, spare parts, provisions, stores, repairs, maintenance, statutory and classification expense, drydocking, intermedi-
ate and special surveys, tonnage taxes and other miscellaneous items. Daily vessel operating expenses are calculated by
dividing vessel operating expenses by ownership days for the relevant period. Our ability to control our fixed and variable
expenses, including our daily vessel operating expenses, also affects our financial results. In addition, factors beyond our
control can cause our vessel operating expenses to increase, including developments relating to market premiums for
insurance, cost of lubricants and changes in the value of the U.S. dollar compared to currencies in which certain of our
expenses are denominated, such as certain crew wages.
~ Daily vessel operating expenses excluding drydocking and pre-delivery expenses. We calculate daily vessel operating ex-
penses excluding drydocking and pre-delivery expenses by dividing vessel operating expenses excluding drydocking and
pre-delivery expenses for the relevant period by ownership days for such period. This measure assists our management
and investors by increasing the comparability of our performance from period to period. Drydocking expenses include costs
of shipyard, paints and agent expenses, and pre-delivery expenses include initially supplied spare parts, stores, provisions
and other miscellaneous items provided to a newbuild or second-hand acquisition prior to their operation, which costs may
vary from period to period.
~ Daily general and administrative expenses. We define general and administrative expenses to include daily management
fees and daily company administration expenses as defined below. Daily vessel general and administrative expenses are
calculated by dividing general and administrative expenses by ownership days for the relevant period.
~ Daily management fees. We define management fees to include the fees payable to our Managers for managing our fleet.
Daily management fees are calculated by dividing management fees by ownership days for the relevant period.
~ Daily company administration expenses. We define company administration expenses to include expenses incurred related
to the administration of our company such as legal costs, audit fees, independent directors’ compensation, listing fees to
NYSE and other miscellaneous expenses. Daily company administration expenses are calculated by dividing company ad-
ministration expenses by ownership days for the relevant period.
The following table reflects our ownership days, available days, operating days, fleet utilization, TCE rates, daily vessel operat-
ing expenses, daily vessel operating expenses excluding drydocking and pre-delivery expenses, daily general and administrative
expenses and daily management fees for the periods indicated:
Ownership days
Available days
Operating days
Fleet utilization on ownership days
Fleet utilization on available days
TCE rates
Daily vessel operating expenses
Daily vessel operating expenses excluding drydocking and pre-delivery
expenses
Daily general and administrative expenses consisting of:
(a) Daily management fees
(b) Daily company administration expenses
Year ended December 31,
2023
2022
15,321
14,959
14,767
96.38%
98.72%
22,712
5,235
4,738
1,423
1,157
266
$
$
$
$
$
$
16,235
15,847
15,664
96.48%
98.85%
16,579
5,494
4,818
1,464
1,183
281
$
$
$
$
$
$
Revenues
Our revenues are driven primarily by the number of vessels in our fleet, the number of days during which our vessels operate and
the amount of daily charter rates that our vessels earn under our charters, which, in turn, are affected by a number of factors,
including:
~ levels of demand and supply in the drybulk shipping industry;
~ the age, condition and specifications of our vessels;
~ the duration of our charters;
~ our decisions relating to vessel acquisitions and disposals;
~ the amount of time that we spend positioning our vessels;
~ the availability of our vessels, which is related to the amount of time that our vessels spend in dry-dock undergoing repairs
and the amount of time required to perform necessary maintenance or upgrade work; and
~ other factors affecting charter rates for drybulk vessels.
Revenue is recognized as earned on a straight-line basis over the charter period in respect of charter agreements that provide for
varying rates. The difference between the revenue recognized and the actual charter rate is recorded either as unearned revenue
or accrued revenue (see “—Unearned Revenue / Accrued Revenue” below). Commissions (address and brokerage), regardless
of charter type, are always charged to us and are deferred and amortized over the related charter period and are presented as a
separate line item in revenues to arrive at net revenues in the accompanying consolidated statements of income.
Revenues are generated from time charters, period and spot, and voyage charters. Revenues from our time charters comprised
98.3%, 100.0% and 100.0%, respectively, of our revenues for the years ended December 31, 2021, 2022 and 2023, from
which our period time charters comprised 75.1%, 77.9% and 77.5%, respectively, and our spot time charters comprised
23.2%, 22.1% and 22.5%, respectively, of our revenues for the years ended December 31, 2021, 2022 and 2023. Revenues
from voyage charters comprised 1.7% of our total revenues for the year ended December 31, 2021. No voyage charters were
performed during the years ended December 31, 2022 and 2023.
Unearned Revenue / Accrued Revenue
Unearned revenue as of December 31, 2023 includes: (i) cash received prior to the balance sheet date relating to services to be
rendered after the balance sheet date amounting to $6.7 million and (ii) deferred revenue resulting from straight-line revenue
recognition in respect of charter agreements that provide for variable charter rates amounting to $7.4 million.
Unearned revenue as of December 31, 2022 includes: (i) cash received prior to the balance sheet date relating to services to be
rendered after the balance sheet date amounting to $5.3 million and (ii) deferred revenue resulting from straight-line revenue
recognition in respect of charter agreements that provide for variable charter rates amounting to $11.6 million.
Accrued revenue as of December 31, 2023 represents revenue in the amount of $0.6 million earned prior to cash being received
in respect of charter agreements that provide for variable charter rates.
Accrued revenue as of December 31, 2022 represents revenue in the amount of $0.9 million earned prior to cash being received
in respect of charter agreements that provide for variable charter rates.
Commissions
We pay commissions currently reaching up to 5.0% on our period time and spot time charters, to unaffiliated ship brokers, to
brokers associated with our charterers and to our charterers. These commissions are directly related to our revenues, from which
they are deducted. The amount of our total commissions to unaffiliated ship brokers and other brokers associated with our char-
terers and to our charterers might grow, as revenues increase due to improving market conditions and delivery of our contracted
newbuild vessels, or decrease as a result of deteriorating market conditions. These commissions do not include fees we pay to our
Managers, which are described under “Item 4. Information on the Company—B. Business Overview—Management of Our Fleet.”
Voyage Expenses
We charter our vessels primarily through period time charters and spot time charters under which the charterer is responsible for
most voyage expenses, such as the cost of bunkers, port expenses, agents’ fees, canal dues, extra war risks insurance and any
other expenses related to the cargo. We are responsible for the remaining voyage expenses such as draft surveys, hold cleaning,
bunkers during ballast period or for vessel repositioning, courier and other minor miscellaneous expenses related to the voyage.
We expect that our voyage expenses will decrease in the future if fewer vessels are employed in the spot market, in which case
both vessel repositioning costs and quantity of bunkers consumed under certain time charters for which we receive variable con-
sideration based on charterers consumption, should decrease. We generally do not employ our vessels on voyage charters under
which we would be responsible for all voyage expenses.
Vessel Operating Expenses
Vessel operating expenses include costs for crewing, insurance, lubricants, spare parts, provisions, stores, repairs, maintenance,
statutory and classification expense, drydocking, intermediate and special surveys, tonnage taxes and other minor miscellaneous
items. We expect that our vessel operating expenses will slowly increase in the future as our fleet grows. Our crewing costs,
which are a significant part of our vessel operating expenses, may increase in the future due to the limited supply and increase
in demand for well-qualified crew. Furthermore, we expect that insurance costs, drydocking, maintenance, spare parts and stores
costs will increase from the levels achieved in 2023 as our vessels age. A portion of our vessel operating expenses including crew
wages paid to our Greek crew members are in currencies other than the U.S. dollar. These expenses may increase or decrease as
a result of fluctuation of the U.S. dollar against these currencies.
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Depreciation
We depreciate our drybulk vessels on a straight-line basis over the expected useful life of each vessel. Depreciation is based
on the cost of the vessel less its estimated residual value. We estimate the useful life of our vessels to be 25 years from the
date of initial delivery from the shipyard. Second-hand vessels are depreciated from the date of their acquisition through their
remaining estimated useful life. Furthermore, we estimate the residual value of our vessels is equal to the product of its light-
weight tonnage and estimated scrap rate, which we previously estimated to be $182 per light-weight ton. Effective January
1, 2022, we changed the estimate of vessels’ residual value, from a scrap rate of $182 per light weight ton to $375 per light
weight ton.
Vessels, Net
Vessels are stated at their historical cost, which consists of the contracted purchase price and any direct material expenses
incurred upon acquisition (including improvements, on-site supervision expenses incurred during the construction period if the
vessels are newbuilds, commissions paid, delivery expenses and other expenditures to prepare the vessel for her initial voyage),
less accumulated depreciation and impairment charges, if any. Financing costs incurred during the construction period of the
vessels if the vessels are newbuilds are also capitalized and included in the vessels’ cost. Certain subsequent expenditures for
conversions and major improvements are also capitalized, if it is determined that they appreciably extend the life, increase the
earning capacity or improve the efficiency or safety of the vessels.
As of December 31, 2022 and 2023, we capitalized interest amounting to $513 thousand and $2,578 thousand, respectively.
General and Administrative Expenses
General and administrative expenses consist of management fees paid to our Managers and expenses incurred relating to the
administration of the Company.
Management fees paid to our Managers include services offered to us for managing our vessels (i.e., chartering, operations, tech-
nical, supply, crewing and accounting services), the services provided to us by our executive officers as well as the preparation of
disclosure documents and the preparation for compliance with the Sarbanes-Oxley Act. Pursuant to the terms of the Management
Agreements with our Managers, for the provision of such services, we pay a daily ship management fee of €875 per vessel and
pay Safe Bulkers Management Monaco an annual ship management fee of €3.50 million.
Expenses related to the administration of our company primarily include legal costs, audit fees, independent directors’ compensa-
tion, listing fees to the NYSE and other miscellaneous expenses such as director and officer liability insurance costs and public
relations expenses.
Interest Expense and Other Finance Costs
We incur interest expense on outstanding indebtedness under our existing loan and credit facilities, which we include in inter-
est expense. We also incurred financing costs in connection with establishing those facilities, which are deferred and amortized
over the period of the facility. The amortization of the finance costs is included in amortization and write-off of deferred finance
charges. We will incur additional interest expense in the future on our outstanding borrowings and under future borrowings.
Inflation
Inflation is expected to have a moderate effect on our expenses given current economic conditions. In the event that significant
global inflationary pressures appear, these pressures would increase our financing expenses, operating, voyage and administra-
tive expenses.
Early Redelivery Income/(Cost), Net
Early redelivery cost reflects amounts payable to charterers for early termination of a period time charter resulting from our
request for early redelivery of a vessel. We generally request such early redelivery when we would like to take advantage of a
favorable period time charter market environment and believe that an opportunity to enter into a similarly priced period time
charter is not likely to be available when the relevant vessel is scheduled to be redelivered.
Early redelivery income reflects amounts payable to us for early termination of a period time charter resulting from a charterer’s
request for early redelivery of a vessel. We may accept such requests from charterers when we believe that we are compensated
for a substantial portion of the contracted revenue, reduce our third party risk or maintain the opportunity to re-employ the vessel
either in the spot market or in the period time charter market at adequate levels.
We have entered into such arrangements for early redelivery, and incurred such costs or earned such income in the past and we
may continue to do so in the future, depending on market conditions.
Results of Operations
Year ended December 31, 2023 compared to year ended December 31, 2022
During the year ended December 31, 2023, we had an average of 44.5 drybulk vessels in our fleet. During the year ended
December 31, 2022, we had an average of 42.0 drybulk vessels in our fleet.
During the year ended December 31, 2023, we acquired the newbuild Post Panamax vessels Climate Ethics and Climate Justice
and the newbuild Kamsarmax vessels Pedhoulas Trader, Morphou and Rizokarpaso and sold the second-hand Panamax vessels
Katerina, build 2004 and Efrossini, build 2012 and the second-hand Kamsarmax vessel Pedhoulas Trader, build 2006.
During the year ended December 31, 2022, we acquired the newbuild Post Panamax vessel Climate Respect and the newbuild
Kamsarmax vessel Vassos and the second-hand Capesize vessels Maria, Aghia Sofia and Michalis H.
Revenues
Revenues decreased by 18.9%, or $68.7 million, to $295.4 million during the year ended December 31, 2023 from $364.1
million during the year ended December 31, 2022, mainly due to the lower market rates.
Commissions
Commissions to unaffiliated ship brokers, other brokers associated with our charterers and our charterers during the year ended
December 31, 2023 amounted to $11.0 million, a decrease of $3.3 million, or 23.1%, compared to $14.3 million during the
year ended December 31, 2022. Commissions as a percentage of revenues decreased to 3.7% of revenues during the year ended
December 31, 2023 compared to 3.9% of revenues for the year ended December 31, 2022.
Voyage expenses
During the year ended December 31, 2023, we recorded voyage expenses of $21.7 million, compared to $10.0 million during
the year ended December 31, 2022, a 117.0% increase mainly due to increased quantity of bunkers consumed under certain
time charters for which the Company receives variable consideration based on charterers consumption and the hire expense relat-
ing to the chartered-in vessel MV Arethousa.
Vessel operating expenses
Vessel operating expenses increased by 11.2% to $89.2 million during the year ended December 31, 2023 from $80.2 million
during the year ended December 31, 2022. Ownership days in 2023 compared to 2022 increased by 6.0%, to 16,235 days
from 15,321. Daily operating expenses increased by 4.9% to $5,494 during the year ended December 31, 2023 from $5,235
during the year ended December 31, 2022.
Vessel operating expenses increased as a net result of the following:
(i) the increase in crew wages, repatriation and related crew costs expenses by 3.7% to $39.5 million in 2023, compared
to $38.1 million in 2022, due to increased ownership days;
(ii) the increase in cost of spares, stores and provisions by 12.7% to $18.7 million in 2023 compared to $16.6 million in
2022, primary due to increased transportation and delivery costs that have prevailed in the market during 2023 and
increased initial supplies for our newbuild acquired vessels;
(iii) the increase in repairs, maintenance and drydocking costs by 35.5% to $16.4 million in 2023, compared to $12.1 mil-
lion in 2022, primarily due to the increased dry docking cost of $9.7 million during 2023, compared to $6.7 million for
the same period of 2022, as a result of the increased number of drydockings during 2023. During 2023, 13 drydockings
were fully completed and two partially completed, compared to 6 drydockings fully and one partially completed during 2022;
(iv) the increase in lubricant costs by 7.8% to $5.5 million in 2023, compared to $5.1 million in 2022, due to increased
lubricant unit prices and increased ownership days in 2023 compared to 2022; and
(v) the increase in insurance costs by 12.8% to $5.3 million in 2023, compared to $4.7 million in 2022, due to increased
vessels’ insured values, reflecting increased insurance premia and increased ownership days in 2023 compared to 2022.
Other factors influencing vessel operating expenses, such as taxes and other miscellaneous expenses, had a minor effect on the
increased operating expenses.
The Company expenses drydocking and pre-delivery costs as incurred, which costs may vary from period to period. Vessel op-
erating expenses excluding vessel drydocking and pre-delivery costs increased by 7.7% to $78.2 million in 2023, compared to
$72.6 million in 2022, primarily due to increased vessel operating days, crew wages, insurance and lubricant costs. Drydocking
expense is related to the number of drydockings in each period and pre-delivery expense is related to the number of vessel deliver-
ies and second-hand acquisitions in each period. Certain other shipping companies may defer and amortize drydocking expense.
Daily operating expenses, excluding vessel drydocking and pre-delivery costs, increased by 1.7% to $4,818 during the year
ended December 31, 2023 from $4,738 during the year ended December 31, 2022.
Gain on sale of assets
Gain on sale of assets amounted to $10.4 million during the year ended December 31, 2023, compared to zero during the year
ended December 31, 2022, as a result of gain on the sale of three of our vessels in 2023.
Depreciation and amortization
Depreciation and amortization expense increased by 9.3% to $54.1 million during the year ended December 31, 2023, com-
pared to $49.5 million during the year ended December 31, 2022, as a result of the increased number of vessels during 2023.
General and administrative expenses
General and administrative expenses increased by 9.2% to $23.8 million during the year ended December 31, 2023, compared
to $21.8 million during the year ended December 31, 2022. The increase of $2.0 million is mainly due to the increase by $1.5
million in the management fees charged by our Managers of $19.2 million in 2023 from $17.7 million in 2022. Management
fees which are denominated in Euros increased in 2023 compared to 2022 mainly due to the increase of ownership days from
15,321 in 2022 to 16,235 in 2023. Company administration expenses increased by $0.5 million from $4.1 million during
2022 to $4.6 million in 2023.
As a result:
~ Daily general and administrative expenses which consist of daily management fees and daily company administration
expenses, increased by 2.9% to $1,464 during the year ended December 31, 2023, from $1,423 during the year ended
December 31, 2022;
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~ Daily management fees increased by 2.2% to $1,183 during the year ended December 31, 2023, from $1,157 during
the year ended December 31, 2022; and
~ Daily company administration expenses increased by 5.6% to $281 during the year ended December 31, 2023, from
$266 during the year ended December 31, 2022.
Interest expense
Interest expense increased by 44.4% to $24.7 million during the year ended December 31, 2023, compared to $17.1 million,
during the year ended December 31, 2022. This was the combined effect of: i) the increase in the weighted average interest
rate of our outstanding indebtedness of 6.034% per annum (“p.a.”) for the year ended December 31, 2023, compared to the
weighted average interest rate of our outstanding indebtedness of 3.255% p.a. for the year ended December 31, 2022 reflect-
ing the increasing interest rate environment, and ii) the decrease in average loans outstanding of $445.4 million during the year
ended December 31, 2023, compared to the average loans outstanding of $520.8 million during the year ended December 31,
2022. The total principal amount of loans outstanding as of December 31, 2023 was $515.9 million, compared to $422.6 mil-
lion as of December 31, 2022.
The discussion relating to the year ended December 31, 2022 compared to year ended December 31, 2021, can be found in the
Company’s 20-F for the year ended December 31, 2022 filed with the SEC on March 6, 2023, under ITEM 5. OPERATING AND
FINANCIAL REVIEW AND PROSPECTS - Year ended December 31, 2022 compared to year ended December 31, 2021.
B. Liquidity and Capital Resources
As of December 31, 2023, we had liquidity of $285.8 million consisting of cash, cash equivalents, bank time deposits and re-
stricted cash of $98.8 million, $131.5 million available under our revolving credit facilities, and up to $55.5 million available
under financing agreements. We had an existing fleet of 46 vessels, one of which held for sale, and eight newbuild vessels in
our orderbook. Furthermore, we had contracted revenue of approximately $269.6 million, net of commissions, from our non-
cancellable spot and period time charter contracts, including contracted revenue linked to the BPI and BCI index, calculated as of
December 31, 2023, and excluding the Scrubber benefit, and additional borrowing capacity in relation to eight unencumbered
vessels and six newbuilds upon their delivery. Our aggregate remaining contractual obligations as of December 31, 2023 were
$943.5 million of which $160.7 million payable in 2024, $351.2 million payable in 2025 and 2026, $298.2 million payable in
2027 and 2028 and $133.4 million payable 2029 onwards. The aggregate remaining contractual obligations consist of:
i) $515.9 million of aggregate debt outstanding of which $27.2 million relates to the current portion of long term debt pay-
able within 2024;
ii) $216.6 million of remaining capital expenditure requirements relating to the purchase consideration of the eight new-
builds, of which $80.0 million payable in 2024;
iii) $78.9 million of payments to our Managers which represent the daily and annual ship management fees, the acquisition
fees and the supervision fees, of which $22.4 million payable in 2024;
iv) $131.6 million of interest and bond coupon payments, consisting of estimated interest payments we expect to make with
respect to our long-term debt obligations, reflecting an assumed Term SOFR-based applicable interest rate of 5.158%
(using the six-month SOFR rate as of December 31, 2023) plus the relevant margin of the applicable credit facility; and
v) $0.5 million of the remaining vessel upgrades and improvements, relating to Scrubber investments, all payable in 2024.
As of February 16, 2024, we had liquidity of $276.6 million consisting of cash, cash equivalents, bank time deposits and re-
stricted cash of $118.1 million and $158.5 million available under the revolving credit facilities. We had an existing fleet of 47
vessels and seven newbuild vessels in our orderbook. Furthermore, we had contracted revenue of approximately $259.8 mil-
lion, net of commissions, from our non-cancellable spot and period time charter contracts, including contracted revenue linked
to the BPI and BCI index, calculated as of February 16, 2024, and excluding the Scrubber benefit, and additional borrowing
capacity in relation to eight unencumbered vessels and seven newbuilds upon their delivery. The aggregate remaining capital
expenditure requirements for the acquisition of the seven newbuilds, amounted to $206.1 million, of which $41.6 million is
payable in 2024, $52.5 million payable in 2025, $84.2 million payable in 2026 and $27.8 million payable in 2027. Further
we had $535.0 million of aggregate debt outstanding, of which $28.5 million relates to the current portion of long term debt
payable within the remainder of 2024.
Our primary liquidity needs are to fund financing expenses, debt repayment or refinancing, vessel operating expenses, general and
administrative expenses, capital expenditures in relation to vessel acquisitions and vessel improvements, redemption of preferred
shares, repurchase of common stock and dividend payments to our shareholders. We anticipate that our primary sources of funds
will be existing cash and cash equivalents and bank time deposits which as of December 31, 2023 amounted to $87.9 million,
cash generated from operations, available amounts under our revolving credit facilities of up to $131.5 million, committed ag-
gregate borrowing capacity of up to $55.5 million and, possibly, other future equity or debt financing.
In our opinion, the contracted cash flow from operations, the committed borrowing capacity and the existing cash and cash equiva-
lents will be sufficient to fund the operations of our fleet and any other present financial requirements of the Company, including
our working capital requirements, and our capital expenditure requirements at least through the end of the first quarter of 2025.
However, we may seek and refinance our debt which may result in additional indebtedness and/or deferring repayments to later
periods, and/or lower interest rates to maintain a strong cash position. Future needs in relation to financing and investing activities
may involve equity issuance or refinancing of existing debt and financing of any future fleet replacement and expansion program
or fleet upgrades and improvements, in addition to use of our existing cash and operating cash surplus. Our ability to obtain bank
financing or to access the capital markets for future offerings may be limited by our financial condition at the time of any such
financing or offering, including the actual or perceived credit quality of our charterers and the market value of our fleet, as well
as by adverse market conditions resulting from, among other things, general economic conditions, weakness in the financial and
equity markets and contingencies and uncertainties that are beyond our control. To the extent that market conditions deteriorate,
charterers may default or seek to renegotiate charter contracts, and vessel valuations may decrease, resulting in a breach of our
debt covenants. In addition, refinancing of our existing debt in the future may be difficult. Our contracted revenues may decrease
and we may be required to make additional prepayments under existing loan facilities, resulting in additional financing needs.
A failure to fulfill our capital expenditures commitments generally results in a forfeiture of advances paid with respect to the con-
tracted newbuild vessel and a write-off of capitalized expenses. In addition, we may also be liable for other damages for breach
of contract. A failure to satisfy our financial commitments could result in the acceleration of our indebtedness and foreclosure on
our vessels. Such events could adversely impact the dividends we intend to pay, and could have a material adverse effect on our
business, financial condition and results of operation.
We paid dividends to our common shareholders each quarter between the date of our initial public offering in June 2008 and the
second quarter of 2015. In March 2022, we re-established paying dividends to our common shareholders and have since paid an-
other seven quarterly consecutive dividends of $0.05 per common share, totaling $46.8 million. In February 2024, we declared
a cash dividend of $0.05 per share of Common Stock payable on March 19, 2024 to shareholders of record on March 1, 2024.
During 2023, we declared and paid four quarterly consecutive dividends of $0.50 per share of Series C Preferred Shares, totaling
$1.6 million, and four quarterly consecutive dividends of $0.50 per share of Series D Preferred Shares, totaling $6.4 million. In
January 2024, we declared and paid a dividend of $0.50 per share for each of Series C Preferred Shares, totaling $0.4 million,
and of Series D Preferred Shares, totaling $1.6 million.
Our future liquidity needs will impact our dividend policy. The declaration and payment of dividends, if any, will always be subject
to the discretion of the board of directors of the Company. There is no guarantee that the Company’s board of directors will deter-
mine to issue cash dividends in the future. The timing and amount of any dividends declared will depend on, among other things:
(i) the Company’s earnings, fleet employment profile, financial condition and cash requirements and available sources of liquidity;
(ii) decisions in relation to the Company’s growth, fleet renewal and leverage strategies; (iii) provisions of Marshall Islands and
Liberian law governing the payment of dividends; (iv) restrictive covenants in the Company’s existing and future debt instruments;
and (v) global economic and financial conditions. In addition, cash dividends on our Common Stock are subject to the priority of
dividends on our Preferred Shares.
On July 13, 2020, we filed a shelf registration statement to prepare for our ATM Program. On August 7, 2020 we filed a prospec-
tus supplement to commence our ATM Program of up to $23.5 million of our common stock. We entered into a sales agreement
with DNB Markets, Inc. (“DNB”) as our sales agent, relating to the shares of our common stock, par value $0.001 per share, of-
fered by this prospectus supplement and the accompanying prospectus. In accordance with the terms of the sales agreement, we
might, through our sales agent, offer and sell from time to time shares of our common stock having an aggregate offering price
of up to $23.5 million. On May 26, 2021, we entered into a second prospectus supplement in order to upsize our ATM Program
offering to $100.0 million. With DNB still engaged as our sales agent, we entered into Amendment No. 1 to the sales agreement
to continue our ATM Program. As of December 31, 2021, we had offered to sell and had sold 19,417,280 shares under the ATM
program for net proceeds of approximately $71.5 million. We terminated the ATM program in May 2023, having not offered to
sell and having not sold any additional shares of common stock under it. Following the termination of our ATM Program in May
2023, the Company does not currently have an active ATM program, however, our board of directors could adopt an ATM Program
in the future dependent upon market conditions.
In June 2022, we authorized a program under which we may from time to time purchase up to 5,000,000 shares of our common
stock. In March 2023, the Company announced an increase of the June 2022 share repurchase program, authorizing the Com-
pany to purchase up to a total of 10,000,000 shares of the Company’s Common Stock. All shares of Common Stock repurchased
under the June 2022 and March 2023 share repurchase programs have been canceled. In May 2023 the Company announced a
new share repurchase program. In July 2023, the Company terminated the program, having repurchased and canceled 139,891
shares of Common Stock. In November 2023, the Company authorized a share repurchase programs under which we may from
time to time purchase up to 5,000,000 shares of common stock. As of February 16, 2024, the Company had not purchased any
shares of common stock under the aforementioned program.
In February 2022, our wholly owned subsidiary Safe Bulkers Participations successfully completed a public offer in Greece of
€100,000,000 of an unsecured bond that was admitted for trading in the Athens Exchange under the ticker symbol SBB1. The
Bond is guaranteed by the Company, is non-amortizing, matures in February 2027, and carries a coupon of 2.95% payable semi-
annually. It may be redeemed early by the Company in part or in full after February 2024, subject to the payment of premium
ranging from 1.5% to 0.5% of the redeemed amount depending on the timing of the redemption. The net proceeds of the offer-
ing were used for the acquisition of vessels. One of the independent members of the board of directors of the Company currently
serves as the Chief Executive Officer of the financial institution that was the adviser and one of the lead underwriters in the public
offer of the Bond. The transaction was evaluated and approved by the board of directors of the Company excluding that indepen-
dent member of the board of directors of the Company.
As of December 31, 2023, and as of December 31, 2022, we did not have any off-balance sheet arrangements.
Cash Flows
Cash and cash equivalents decreased to $48.2 million as of December 31, 2023, compared to $49.2 million as of December 31,
2022. We consider highly liquid investments such as time deposits and certificates of deposit with an original maturity of three
months or less to be cash equivalents. Cash and cash equivalents were primarily held in U.S. dollars, Euros and Japanese Yen.
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Net Cash Provided by Operating Activities
Net cash provided by operating activities amounted to $122.2 million in 2023 and $218.0 million in 2022, consisting of net
income after non-cash items of $126.3 million and $227.1 million respectively plus a decrease in working capital of $4.1 mil-
lion and decrease of $9.1 million during 2023 and 2022, respectively.
The major drivers of the change of net cash provided by operating activities are the decreased inflows related to net revenues
of $65.3 million in 2023 compared to 2022, the increased outflows related to interest expense of $7.6 in 2023 compared
to 2022, the increased outflows related to vessel voyage expenses of $11.7 million in 2023 compared to 2022 and the in-
creased outflows related to the operating expenses of $9.0 million in 2023 compared to 2022. The major drivers of the cash
outflow of the working capital during 2023 are the increased receivables of $2.3 million compared to 2022, as a result of the
increased outstanding bunker settlement from charterers due to increased number of vessels in period time charters, where
the bunkers on board the vessels upon delivery are sold to the charterers and the decreased unearned revenue of $2.7 million
as a result of the timing of revenue collection, the recognition of straight line revenue for charter parties we entered in prior
years, partially offset by the decreased prepaid expenses of $0.8 million as a result of the difference in the timing of payments.
Net Cash Used in Investing Activities
Net cash flows used in investing activities were $151.7 million for the year ended December 31, 2023 compared to cash flows
used in investing activities of $229.4 million for the year ended December 31, 2022. The decrease in cash flows used in investing
activities of $77.7 million from 2022 is mainly attributable to the following factors: (i) an increase of $13.8 in proceeds from sale
of assets during the year ended December 31, 2023 compared to the same period of 2022, (ii) a net decrease of $26.6 million
in time deposits during the year ended December 31, 2023, compared to a net increase of $63.1 million during the same period
of 2022 and (iii) an increase of $25.8 million in payments for vessel acquisitions, advances for vessels under construction and
major improvements during the year ended December 31, 2023 compared to the same period of 2022.
Net Cash (Used in)/ Provided by Financing Activities
Net cash flows provided by financing activities were $29.1 million for the year ended December 31, 2023, compared cash flows
used in financing activities of $40.1 million for the year ended December 31, 2022. This increase in cash flows provided by
financing activities of $69.2 million, compared to the year ended December 31, 2022, is mainly attributable to a decrease of
$26.1 million in long term debt principal payments, a decrease of $37.3 in redemption of preferred stock, a decrease of $22.0
in finance lease payments, a decrease of $2.9 in dividend payments and a decrease of $3.6 million in the payment of deferred
financing costs compared to the year ended December 31, 2022, offset by a decrease in proceeds from long-term debt by $4.4
million, an increase of $1.1 million in the payment of other financing liability payments and an increase in repurchases of common
stock by $17.2 million compared to the year ended December 31, 2022.
The discussion relating to the cash flows for the year ended December 31, 2022 compared to year ended December 31, 2021,
can be found in the Company’s 20-F for the year ended December 31, 2022 filed with the SEC on March 6, 2023, under ITEM 5.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS - B. Liquidity and Capital Resources.
Credit Facilities
We operate in a capital intensive industry which requires significant amounts of investment, and we fund a portion of this invest-
ment through long-term debt. We or our subsidiaries have generally entered into financing arrangements in order to finance
the acquisition of our vessels, to refinance existing indebtedness and for general corporate purposes. In 2023, (a) one of our
subsidiaries entered into a sale and lease back transaction for the respective newbuild vessel that had agreed to acquire that will
be consummated upon delivery of the newbuild vessel, whereby it will be sold to a third party and immediately leased back to us
under a bareboat charter for ten years with a purchase obligation at the end of the bareboat period and with purchase options
at predetermined dates and prices during the period of the bareboat charter. The proceeds from the transaction will be used to
finance the delivery installment of the relevant vessel and for general corporate purposes. In view of the purchase obligation at the
end of the bareboat charter, we have assessed that the transaction be recorded as financing transaction, (b) two of our subsidiar-
ies entered into and consummated separate sale and lease back transactions for the respective newbuild vessels that were deliv-
ered to them, whereby the vessels were sold to separate third parties and immediately leased back to us under a bareboat charter
for ten years with a purchase obligation at the end of the bareboat period and with purchase options at predetermined dates and
prices during the period of the bareboat charter. The proceeds from the transactions were used to finance the delivery installment
of the relevant vessel and for general corporate purposes. In view of the purchase obligation at the end of the bareboat charter,
we have assessed that the transactions be financing transactions, (c) one of our subsidiaries consummated a credit facility upon
delivery of the newbuild vessel. The proceeds from the transaction were used to finance the delivery installment of the vessel and
for general corporate purposes, (d) four of our subsidiaries entered into a reducing revolving credit facility, to be converted at a
later stage to a credit facility, which was used to finance the acquisition of two newbuild vessels and for general corporate pur-
poses and (e) seven of our subsidiaries entered into an amendment regarding the credit facility that they are party to, whereby the
maturity of the facility was extended by six months and the margin was amended. Following the release of the mortgage on one
of the aforementioned seven of our subsidiaries, the remaining six subsidiaries entered into an amendment regarding the credit
facility that they are party to, whereby the margin was further amended.
The term of our 18 financing arrangements outstanding as of December 31, 2023, ranged from five to 10 years. They are repaid
by monthly or, quarterly principal installments and a balloon payment due on maturity. We generally pay interest at SOFR plus
a margin, plus a credit adjustment spread on facilities that had originally been contracted based on LIBOR, except for one facility
which is deemed to bear interest at a fixed rate, and five facilities, where a portion of the principal amounts is deemed to bear
interest at a fixed rate.
The obligations under our financing arrangements are secured by, among other types of security, first priority mortgages over the
vessels owned by the respective borrower subsidiaries, first priority assignments of all insurances and earnings of the mortgaged
vessels or ownership of the vessels under sale and leaseback financing and guarantees by us.
Covenants Under Credit Facilities
The credit facilities impose operating and financial restrictions on us. These restrictions in our existing credit facilities generally
limit our subsidiaries’ ability to, among other things, and subject to exceptions set forth in such credit facilities:
~ pay dividends if an event of default has occurred and is continuing or would occur as a result of the payment of such divi-
dends;
~ enter into certain long-term charters without the lenders’ consent;
~ incur additional indebtedness, including through the issuance of guarantees;
~ change the flag, class or management of the vessel mortgaged under such facility or terminate or materially amend the
management agreement relating to such vessel;
~ create liens on their assets;
~ make loans;
~ make investments;
~ make capital expenditures;
~ undergo a change in ownership or control or permit a change in ownership and control of our Managers;
~ sell the vessel mortgaged under such facility; and
~ change our chief executive officer.
Our credit facilities also require certain of our subsidiaries to maintain financial ratios and satisfy financial covenants. Depending
on the credit facility, certain of our subsidiaries are subject to financial ratios and covenants requiring that these subsidiaries:
~ meet the Minimum Value Covenant of 105%, 112%, 120% or 135%, as the case may be, for credit facilities outstand-
ing;
~ maintain a minimum cash balance per vessel with the respective lender from $200,000 to $500,000 as the case may
be; and
~ ensure that we comply with certain financial covenants under the guarantees described below.
In addition, under guarantees we have entered into with respect to certain of our subsidiaries’ existing credit facilities, we are
subject to financial covenants. Depending on the facility, these financial covenants include the following:
~ under the Consolidated Leverage Covenant, our total consolidated liabilities divided by our total consolidated assets (based
on the market value of all vessels owned or leased on a finance lease taking into account their employment, and the book
value of all other assets) must not exceed 85%;
~ under the Net Worth Covenant, our total consolidated assets (based on the market value of all vessels owned or leased on
a finance lease taking into account their employment, and the book value of all other assets) less our total consolidated
liabilities must not be less than $150 million ;
~ under the EBITDA Covenant, the ratio of our EBITDA over consolidated interest expense must not be less than 2.0:1, on a
trailing 12 months’ basis;
~ under the Control Covenant, a minimum of 30% or 35%, as the case may be, of our shares shall remain directly or indi-
rectly beneficially owned by the Hajioannou family for the duration of the relevant credit facilities and, in the case of one
facility, Polys Hajioannou, is required to beneficially hold a minimum of 20% of the voting and ownership rights; and
~ payment of dividends is subject to no event of default having occurred and be continuing or would occur as a result of the
payment of such dividends.
The Minimum Value Covenant, Consolidated Leverage Covenant, EBITDA Covenant, Net Worth Covenant and Control Covenant do
not apply to the Pinewood, Shikokuepta, Agros, Kyotofriendo One, Yasudyo, Shimaeight and Shimasix financing agreements. The
EBITDA Covenant does not apply to the Monagrouli and Shimafive loan facilities. The Minimum Value Covenant does not apply to
the Maxdeka, Shikoku, Shikokutessera, Glovertwo and Maxtessera financing agreements.
As of December 31, 2023, the Company was in compliance with all debt covenants that were in effect with respect to its loan
and credit facilities.
Bond
The Bond is not secured by any of our vessels or any other assets, is guaranteed by us and pays a coupon of 2.95% on a semi-
annual basis. It matures in February 2027, has no principal payments during its tenor and may be redeemed at our option in
part or in full after February 2024, subject to the payment of a premium ranging from 1.5% to 0.5% of the redeemed amount
depending on the timing of the redemption.
Covenants Under the Bond
Under the Bond, we are subject to financial covenants, including the following:
~ under the Consolidated Leverage Covenant, our total consolidated liabilities divided by our total consolidated assets (based
on the market value of all vessels owned or leased on a finance lease taking into account their employment, and the book
value of all other assets) must not exceed 85%;
~ under the Net Worth Covenant, our total consolidated assets (based on the market value of all vessels owned or leased on
a finance lease taking into account their employment, and the book value of all other assets) less our total consolidated
liabilities must not be less than $150 million ;
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71
~ under the EBITDA Covenant, the ratio of our EBITDA over consolidated net interest expense must not be less than 2.0:1,
on a trailing 12 months’ basis;
~ payment of dividends is subject to no event of default having occurred and be continuing or would occur as a result of the
payment of such dividends;
~ a minimum of 30% of its voting and ownership rights shall remain directly or indirectly beneficially owned by the Hajioan-
nou family for the duration of the Bond.
As of December 31, 2023, the Company was in compliance with all covenants that were in effect with respect to the bond.
During 2023, we received proceeds of $255.2 million under our credit and financing facilities and we repaid $165.2 million of
our indebtedness. As of December 31, 2023, we had 18 outstanding financing arrangements and the Bond with a combined
outstanding balance of $515.9 million. These debt facilities had maturity dates between 2025 and 2033. During 2024, we are
scheduled to repay $27.2 million of our long-term debt outstanding as of December 31, 2023.
For a description of our debt facilities as of December 31, 2023, please see Note 8 of the consolidated financial statements
included elsewhere in this annual report.
C. Research and Development, Patents and Licenses
We have not incurred expenditures relating to research and development, patents or licenses for the last three years.
D. Trend Information
Our results of operations depend primarily on the charter hire rates that we are able to realize, and the demand for drybulk vessel
services. During 2019, 2020, 2021, 2022 and 2023, the BDI, remained volatile, reaching an annual low of 595 on February
11, 2019 and a high of 2,518 on September 4, 2019 for 2019, an annual low of 393 on May 14, 2020 and an annual high of
2,097 on October 6, 2020 for 2020, an annual low of 1,303 on February 10, 2021 and an annual high of 5,650 on October 7,
2021, for 2021, an annual low of 965 on August 31, 2022 and an annual high of 3,369 on May 23, 2022, for 2022, an annual
low of 530 on February 16, 2023 and an annual high of 3,346 on December 4, 2023, for 2023, and a low of 1,308 on January
17, 2024 and a high of 2,110 on January 5, 2024, thus far in 2024.
Global growth is projected at 3.1% in 2024 and 3.2% in 2025, according to the January 2024 forecast from the International
Monetary Fund. The rise in central bank rates to fight inflation continue to weigh on economic activity. Global headline inflation
is expected to fall from an estimated 6.8% in 2023 (annual average) to 5.8% in 2024 and 4.4% in 2025, as forecasted in the
January 2024 World Economic Outlook of the International Monetary Fund. As of February 16, 2024, the BDI was 1,610, at
levels similar to the last quarter of 2023, as a result of the continuing effects of the Russia-Ukraine war, the unrest in the Middle
East, and the Chinese New Year, where in the past a seasonal low charter market has been observed.
The charter rates during the first months of 2024 in the drybulk market reflect in part the fact that the decrease in demand for
drybulk vessel services as influenced by global financial conditions remain volatile, as a result of the Russia-Ukraine war and the
the recent unrest in the Middle East. On the upside, a stronger boost from pent-up demand in numerous economies or a faster fall
in inflation are plausible, with positive cross-border dry bulk market spillovers. On the downside, severe real estate considerations
in China could hold back the recovery, Russia’s war in Ukraine could escalate, and tighter global financing costs could worsen debt
distress, which could affect negatively the dry bulk market. Financial markets could also suddenly reprice in response to adverse
inflation news, while further geopolitical fragmentation could hamper economic progress. See also “Item 3. Key Information—
D. Risks Inherent in Our Industry and Our Business—The international drybulk shipping industry is cyclical and volatile, having
reached historical highs in 2008 and historical lows in 2016. Charter rates improved in 2019 and declined significantly in 2020,
due in part to the impact of Covid-19, which resulted in relatively lower charter rates. Charter rates since significantly improved
during 2021, 2022 and remained volatile throughout 2023. Cyclicality and volatility may lead to reductions in the charter rates
we are able to obtain, in vessel values and in our earnings, results of operations and available cash flow.”
As of February 16, 2024, 29 of our 47 vessels are employed or scheduled to be employed in period time charters with out-
standing duration of more than three months, ten of which include daily charter rates linked to the BDI. Additionally, we believe
we have structured our capital expenditure requirements, debt commitments and liquidity resources in a way that will provide us
with financial flexibility (see “Item 5. Operating and Financial Review and Prospects - B. Liquidity and Capital Resources” for more
information).
Our TCE rate for the periods ended December 31, 2021, 2022 and 2023 was $21,752, $22,712 and $16,579 respectively,
as a result of our increasing exposure to prevailing spot market conditions. During 2023, Olam International Limited accounted
for 10.18% and Cargill International S.A. accounted for 16.69% of our revenues.
During 2023, 16.2% of our revenue was derived from five Capesize class vessels with long period time charters, contracted in
previous years with original durations of three to 20 years and with a weighted average TCE rate of $26,471. The remaining
83.8% of our revenue was derived from the employment of our remaining vessels, under spot and period time charters with
original durations up to 5 years with a TCE rate of $15,363.
During 2022, 10.0% of our revenue was derived from five Capesize class vessels with long period time charters, contracted in
previous years with original durations of three to 20 years and with a weighted average TCE rate of $24,948. The remaining
90.0% of our revenue was derived from the employment of our remaining vessels, under spot and period time charters with
original durations up to 5 years with a TCE rate of $22,487.
As of February 16, 2024, we had a total of 47 vessels in our fleet. As of February 16, 2024, we have contracted 55% of our
expected ownership days for the remainder of 2024. Our contracted TCE rate for the remainder of 2024, calculated on the basis
of all existing contracts, including contracted revenue linked to the BPI and BCI index calculated as of February 16, 2024, and
customary assumptions in relation to voyage expenses, as of February 16, 2024, was $16,818.
Our employment profile as of February 16, 2024, included one period time charter contract, contracted in previous years with
original duration of 20 years, with an expected remaining charter duration of 7.7 years and with an expected TCE rate for the
remainder of 2024 of $25,342, six period time charter contracts contracted in previous years with original durations of 5 years,
with an average expected remaining charter duration of 1.5 years and with an expected TCE rate for the remainder of 2024 of
$11,734, four period time charter contracts contracted in 2021 and 2022 with original durations of three years, with an aver-
age expected remaining charter duration of 1.7 years and with an expected TCE rate for the remainder of 2024 of $23,232 and
36 spot and period time charters with an expected average remaining charter duration of 4.7 months, and an expected TCE rate
of $16,563. Vessels whose charters expire or are early redelivered or terminated within 2024 will be chartered at prevailing
charter market conditions, which may substantially influence our revenues, the valuation of our vessels, our results of operations
and our dividend distributions.
E. Critical Accounting Estimates
Critical accounting estimates are those estimates made in accordance with generally accepted accounting principles that involve
a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condi-
tion or results of operations of the registrant.
We prepared our consolidated financial statements in accordance with U.S. GAAP, which requires us to make estimates in the
application of our accounting policies based on our best assumptions, judgments and opinions. We base these estimates on the
information currently available to us and on various other assumptions we believe are reasonable under the circumstances. Ac-
tual results may differ from these estimates under different assumptions or conditions. Following is a discussion of the accounting
policies that involve a high degree of judgment and the methods of their application. For a further description of our material ac-
counting policies, please read Note 2 of the consolidated financial statements included elsewhere in this annual report.
Impairment of Vessels, net
The Company’s fixed assets comprise its owned vessels.
The Company reviews for impairment its vessels held and used whenever events or changes in circumstances indicate that the
carrying amount of the assets may not be recoverable. When the estimate of undiscounted cash flows, excluding interest charges,
expected to be generated by the use of our vessel is less than its carrying amount, we are required to evaluate the vessel for an
impairment loss. Measurement of the impairment loss is based on the fair value of the vessel.
The carrying values of our vessels may not represent their fair market value at any point in time since the market prices of
second-hand vessels tend to fluctuate with changes in charter rates and the cost of newbuilds. Historically, both charter rates
and vessel values tend to be cyclical. Declines in the fair market value of vessels, prevailing market charter rates, vessel sale and
purchase considerations, regulatory changes in drybulk shipping industry, changes in business plans or changes in overall market
conditions that may adversely affect cash flows are considered as potential impairment indicators. In the event the independent
fair market value of a vessel is lower than its carrying value, we determine undiscounted projected net operating cash flow for
such vessel and compare it to the vessel carrying value.
The undiscounted projected net operating cash flows for each vessel are determined by considering the charter revenues from ex-
isting time charters for the fixed vessel days and an estimated daily time charter equivalent for the unfixed days, using the twelve
month budgeted rates for the unchartered period of the first twelve months, the Forward Freight Agreement (“FFA”) rates for the
unchartered period of the second twelve months and the most recent historical 10-year average daily rates of similar size vessels
thereafter, until the end of the remaining estimated useful life of the asset, adding an estimated premium on future daily charter
rates for vessels with installed Scrubbers based on an estimated price difference between the bunker fuel types, until the end
of the remaining useful life of the asset, net of brokerage commissions; expected outflows for vessel operating expenses which
include drydocking costs, voyage expenses and management fees. The undiscounted cash flows incorporate various factors, such
as estimated future charter rates, estimated vessel operating costs, estimated vessel utilization rates, estimated remaining lives
of the vessels (assumed to be 25 years from the initial delivery of each vessel from the shipyard) and estimated salvage value of
the vessels based on period end ten-year historical average demolition prices per light-weight ton. In addition, the undiscounted
cash flow estimates incorporate a probability weighted approach for developing estimates of future cash flows for specific vessels
when alternative courses of action, including the likelihood of sale, are under consideration.
Historically, a full shipping cycle has variable duration. Since 2008, when we identified impairment indications for the first time,
we have used the ten-year average of the one-year time charter rate for the computation of an estimated daily time charter rate
for the unfixed days for each of our vessel types. We use the historical ten-year average, as we believe it captures on average the
highs and lows of a full shipping cycle, and therefore, is considered a reasonable estimation of expected future time charter rates
over the remaining useful life of our vessels.
These assumptions are based on historical trends as well as future expectations. Although management believes that the as-
sumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective.
Our impairment test as of December 31, 2023, on our vessels held and used, which also involved sensitivity tests on the future
time charter rates, (which is the input that is most sensitive to variations), allowing for variances of up to 7.2%, depending on the
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ANNUAL REPORT 2023
73
vessel type on time charter rates from our base scenario, indicated no impairment on any of our vessels. As of February 16, 2024,
our contracted TCE rate for the remainder of 2024, calculated on the basis of all existing contracts and customary assumptions
in relation to voyage expenses, was $16,818, as compared to the TCE for 2021, 2022 and 2023 of $21,752, $22,712 and
$16,579, respectively. The ten-year average historic rate we have used is lower than the 3, 5 and 15 year historical averages.
Our analysis for the year ended December 31, 2022, on our vessels held and used, which also involved sensitivity tests on the
future time charter rates, (which is the input that is most sensitive to variations), allowing for variances of up to 16.2%, with the
exception of one vessel allowing for variances of up to 1.4%, depending on the vessel type on time charter rates from our base
scenario, indicated no impairment on any of our vessels that were held and used.
Our comparison of the actual 2023 net receipts to the forecasted net receipts used in the impairment test performed for the year
ended December 31, 2022 indicated a favorable variance of 12.2%, between actual net receipts during 2023 and net receipts
forecast by the Company for the same period. Our comparison of the actual 2022 net receipts to the forecast net receipts used
in the impairment test performed for the year ended December 31, 2021 indicated a favorable variance of 6.6%, between actual
net receipts during 2022 and net receipts forecast by the Company for the same period.
To assist investors in evaluating the possible impact on future results of operations, the following table shows the effect on the
Company’s impairment analysis of using the 3-year, 5-year and 15-year historical average daily rates as of December 31, 2023,
as opposed to using the 10-year historical average daily rates.
10-Year
3-Year
Impairment
Charge
5-Year
Impairment
Charge
15-Year
Impairment
Charge
Historical
Average
Daily Rates
Historical
Average
Daily Rates
(in USD
million)
Historical
Average
Daily Rates
(in USD
million)
Historical
Average
Daily Rates
(in USD
million)
Panamax
Class Vessels
Kamsarmax
Class Vessels
Post Panamax
Class Vessels
Capesize
Class Vessels
Total
$
$
$
$
12,775 $
18,618 $
— $
15,652 $
— $
13,672
13,541 $
19,735 $
— $
16,592 $
— $
14,492
14,308 $
20,853 $
— $
17,531 $
— $
15,313
16,111 $
19,900 $
— $
17,974 $
— $
18,257
— $
— $
— $
— $
— $
— $
— $
The Company assesses the assumptions used for performing its impairment analysis, and considers the appropriate duration of
historical average charter rates to be used.
While the Company intends to continue to hold and operate its vessels as of December 31, 2023, to assist investors in evaluating
the possible impact on future results of operations, the following table shows the number of vessels whose estimated basic market
value, exceeded their carrying value and their aggregate carrying value in each case, as of December 31, 2022 and December 31,
2023, respectively. For purposes of this calculation, we have assumed that the vessels would be sold at a price that reflects our
estimate of their current basic market values. Our estimate of basic market values is determined based on valuations received from
third-party independent ship brokers, approved by our banks, who determine the fair value based on recent vessel sales and purchase
activity which take into account relevant sales and negotiations in progress, newbuilding prices, demolition prices, rates and trends
in relevant sectors, vessel specifications and yards. The carrying value of each of our vessel’s does not necessarily represent its fair
market value or the amount that could be obtained if the vessel was sold. The Company’s estimates of basic market values assume
that the vessels are all in good and seaworthy condition without need for repair and, if inspected, would be certified as being in class
without recommendations of any kind. In addition, because vessel market values are highly volatile, these estimates may not be in-
dicative of either the current or future prices that the Company could achieve if it were to sell any of the vessels. The Company would
not record impairment for any of its vessels for which the fair market value is below its carrying value unless and until the Company
either determines to sell the vessel for a loss or determines that the vessel’s carrying value is not recoverable.
Vessels whose fair market value
was below their carrying value
Vessels whose fair market value,
exceeded their carrying value
Total Vessels
As of December 31, 2022
As of December 31, 2023
Number of
vessels
Aggregate
Carrying
Value
($ US Million)
Number of
vessels
Aggregate
Carrying
Value
($ US Million)
10
(1)
320.6
8
(2)
251.1
33
43
680.5
1,001.1
37
45
840.4
1,091.5
(1) As of December 31, 2022, the aggregate carrying value of these 10 vessels was $56.4 million more than their fair market value, based on broker quotes.
(2) As of December 31, 2023, the aggregate carrying value of these 8 vessels was $51.9 million more than their fair market value, based on broker quotes.
The decrease in the number of vessels and thus the decrease of $4.5 million in the difference between the fair market value and
the aggregate carrying value of the vessels whose fair market value was below their carrying value as of December 31, 2023, as
compared to December 31, 2022, reflects the seasonality of the drybulk trade.
Recent accounting pronouncements
Refer to Note 2 of the consolidated financial statements included elsewhere in this annual report.
ITEM 6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A. Directors and Senior Management
The following table sets forth, as of February 16, 2024, information regarding our directors and executive officers.
Name
Polys Hajioannou
Dr. Loukas Barmparis
Konstantinos Adamopoulos
Ioannis Foteinos
Marina Hajioannou
Kristin H. Holth
Christos Megalou
Frank Sica
Ole Wikborg
Age
57
61
61
65
24
67
64
73
68
Position
Chief Executive Officer, Chairman of the Board and Class I Director
President, Secretary and Class II Director
Chief Financial Officer and Class III Director
Chief Operating Officer and Class I Director
Class II Director
Class III Director
Class II Director
Class III Director
Class I Director
Certain biographical information about each of these individuals is set forth below. The term of our Class I directors expires in
2024, the term of our Class II directors expires in 2025 and the term of our Class III directors expires in 2026.
Polys Hajioannou is our Chief Executive Officer and has been Chairman of our board of directors since 2008. Mr. Hajioannou also
serves with Safe Bulkers Management Ltd. in Cyprus, which provides technical, commercial and administrative management services
to the Company, and prior to that, with its predecessor Alassia Steamship Co., Ltd., which he joined in 1987. Mr. Hajioannou was elect-
ed as a member of the board of directors of the Union of Greek Shipowners in 2006 and served on the board until February 2009. Mr.
Hajioannou is a founding member and Vice-President of the Union of Cyprus Shipowners. Mr. Hajioannou is a member of the Lloyd’s
Register Hellenic Advisory Committee. In 2011, Mr. Hajioannou was appointed to the board of directors of the Hellenic Mutual War
Risks Association (Bermuda) Limited and in 2013 he was elected to the board of directors of the UK Mutual Steam Ship Assurance
Association (Bermuda) Limited where he served until 2016. In that year, he was elected member to the newly established UK Club
Bermuda Members’ Committee. Mr. Hajioannou holds a Bachelor of Science degree in nautical studies from Sunderland University.
Dr. Loukas Barmparis is our President and Secretary and has been a member of our board of directors since 2008. Dr. Barmparis
also serves as the technical manager of Safe Bulkers Management Ltd., which he joined in December 2016. Between 2009 and
2016, he was the technical manager of Safety Management Overseas S.A. Until 2009, he was the project development manager
of the affiliated Alassia Development S.A., responsible for renewable energy projects. Prior to joining our Manager and Alassia
Development S.A., from 1999 to 2005 and from 1993 to 1995, Dr. Barmparis was employed at N. Daskalantonakis Group,
Grecotel, one of the largest hotel chains in Greece, as technical manager and project development general manager. During the
interim period between 1995 and 1999, Dr. Barmparis was employed at Exergia S.A. as an energy consultant. Dr. Barmparis
holds a master of business administration (“M.B.A.”) from the Athens Laboratory of Business Administration, a doctorate from the
Imperial College of Science Technology and Medicine, a master of applied science from the University of Toronto and a diploma in
mechanical engineering from the Aristotle University of Thessaloniki.
Konstantinos Adamopoulos is our Chief Financial Officer and has been a member of our board of directors since 2008. Mr. Adamo-
poulos also serves as the finance manager of Safe Bulkers Management Ltd., which he joined in December 2016. Between 2008
and 2016, he was the finance manager of Safety Management Overseas S.A. Prior to joining us, Mr. Adamopoulos was employed at
Credit Agricole CIB, a financial institution, as a senior relationship manager in shipping finance for 14 years. Prior to this, from 1990
to 1993, Mr. Adamopoulos was employed by the National Bank of Greece in London as an account officer for shipping finance and in
Athens as deputy head of the export finance department. Prior to this, from 1987 to 1989, Mr. Adamopoulos served as a finance of-
ficer in the Greek Air Force. Mr. Adamopoulos holds a Bachelor of Science degree in business administration from the Athens School
of Economics and Business Science and an M.B.A. in finance from the Bayes Business School, City, University of London.
Ioannis Foteinos is our Chief Operating Officer and has been a member of our board of directors since February 2009. Mr.
Foteinos has over 30 years of experience in the shipping industry. After obtaining a bachelor’s degree in nautical studies from
Sunderland University, he joined the predecessor of Safety Management in 1987, where he served as Chartering Manager until
2017. Presently he serves as Chartering Manager with Safe Bulkers Management Ltd. in Cyprus, which he joined in May 2017.
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Marina Hajioannou has been a member of our board of directors since 2023 and is working in chartering and operations for Safe
Bulkers Inc. Ms. Hajioannou holds a Bachelor Degree in Fine Arts at Chelsea College of Art and Design, UAL and a certificate in
shipping from Hellenic Management Center/ICS. Marina Hajioannou is the daughter of Polys Hajioannou.
Kristin H. Holth has been a member of our board of directors since 2023 and serves as a member of our audit and governance, nomi-
nating and compensation committees. Ms. Holth previously served as Executive Vice President and Global Head of Ocean Industries for
DNB Bank ASA (“DNB”), Norway’s largest financial services group and a global leading financial institution within the maritime sector.
Ms. Holth has significant experience in capital markets and funding, and has held numerous management positions within DNB over the
years, including serving as Global Head of Shipping, Offshore & Logistics for four years, and General Manager & Head of DNB Americas
for six years. Ms. Holth currently serves on several boards, including Noble Corporation (NYSE: NE), Maersk Tankers, and HitecVision
AS. Ms. Holth holds a Bachelor of Business Administration degree in international finance from BI Norwegian Business School.
Christos Megalou has been a member of our board of directors since 2016 and serves as a member of our audit and our corpo-
rate governance, nominating and compensation committees. Mr. Megalou has been the Chief Executive Officer of Piraeus Bank
SA since 2017. Mr. Megalou has been a Distinguished Fellow of the Global Federation of Competitiveness Councils in Washington,
D.C. since 2016. From 2015 to 2016, Mr. Megalou served as senior advisor to Fairfax Financial Holdings. From 2013 to 2015,
Mr. Megalou served as the Chief Executive Officer and Chairman of the Executive Board of Eurobank Ergasias SA and was the Dep-
uty Chairman of the Hellenic Bank Association in Greece. From 2010 to 2013, Mr. Megalou served as Chairman of the Hellenic
Bankers Association in the U.K. From 1997 to 2013, he was Vice-Chairman of Southern Europe, Co-head of Investment Banking
for Southern Europe and Managing Director in the Investment Banking Division of Credit Suisse in London. From 1991 to 1997,
he was a Director at Barclays de Zoete Wedd. From 1991 to 1996, he was Deputy Chairman of the British Hellenic Chamber of
Commerce. He started his career in 1984 as an auditor in Arthur Andersen in Athens. Mr. Megalou holds a Bachelor of Science de-
gree in economics from the University of Athens and an M.B.A. in finance from Aston University in Birmingham, United Kingdom.
Frank Sica has been a member of our board of directors and of our corporate governance, nominating and compensation committee,
and a member and chairman of our audit committee, since 2008. Previously, Mr. Sica has served as a director of CSG Systems Inter-
national, an account management and billing software company for communication industries and as a director of JetBlue Airways
Corporation, a commercial airline, and Kohl’s Corporation, an owner and operator of department stores. Mr. Sica has served as a
Partner at Tailwind Capital, a private equity firm, since 2006. From 2004 to 2005, Mr. Sica was a Senior Advisor to Soros Private
Funds Management. From 1998 to 2003, Mr. Sica worked at Soros Fund Management where he oversaw the direct real estate and
private equity investment activities of Soros. From 1988 to 1998, Mr. Sica was a Managing Director at Morgan Stanley. Mr. Sica
holds a bachelor’s degree from Wesleyan University and an M.B.A. from the Tuck School of Business at Dartmouth College.
Ole Wikborg has been a member of our board of directors and of our audit committee and chairman and member of our corporate
governance, nominating and compensation committee since 2008. Mr. Wikborg has been involved in the marine and shipping
industry in various capacities for over 35 years. From 2002 to 2016, Mr. Wikborg has served as a member of the management
team, a director and a senior underwriter of the Norwegian Hull Club, based in Oslo, Norway. In 2016, he moved to London to
take up the position as the head of the London branch of Norwegian Hull Club, established that year. He retired from his position
in Norwegian Hull Club in October 2022. From 2002 to 2006, Mr. Wikborg also served as a member and chairman of the Ocean
Hull Committee of the International Union of Marine Insurance (“IUMI”). Since 2006, he has served as Vice President and a mem-
ber of the Executive Board of the IUMI, and he was elected as President of IUMI from 2010 to 2014. Since 1997, Mr. Wikborg
has served as a board member of the Central Union of Marine Insurers, based in Oslo, and was that organization’s Chairman from
2009 to 2013. From 1997 until 2002, Mr. Wikborg served as the senior vice president and manager of the marine and energy
division of the Zurich Protector Insurance Company ASA. Prior to his career in marine insurance, Mr. Wikborg served in the Royal
Norwegian Navy, attaining the rank of lieutenant commander.
B. Compensation of Directors and Senior Management
Our Managers, pursuant to the terms of the applicable Management Agreements, have historically provided to us our executive of-
ficers. For the year ended December 31, 2023, none of the executive officers and senior management were employed directly by
us. For a discussion of the fees payable to our Managers, refer to “Item 7. Major Shareholders and Related Party Transactions—B.
Related Party Transactions—Management Agreements.” Also, we do not have any service contracts with any of our non-executive
directors that provide for benefits upon termination of their services.
Non-executive independent directors of the Company are paid an annual fee in the amount of $40,000 plus reimbursement for
their out-of-pocket expenses.
In addition, the chairman of the audit committee, Frank Sica, receives the annual equivalent of $60,000 in the form of shares
of our Common Stock. Ole Wikborg, Christos Megalou and Kristin Holth receive the annual equivalent of $30,000 in the form of
shares of our Common Stock.
No amounts are set aside or accrued by us to provide pension, retirement or similar benefits.
Information regarding the period which each director served and the date of expiration of each director’s current term is
included in “Item 6A. Directors, Senior Management and Employees—A. Directors and Senior Management.” As of December 31,
2023, we had nine members on our board of directors. The board of directors may change the number of directors to not less
C. Board Practices
than three, nor more than fifteen, by a vote of a majority of the entire board of directors. Each director shall be elected to serve
until the third succeeding annual meeting of shareholders and until his or her successor shall have been duly elected and qualified,
except in the event of death, resignation or removal. A vacancy on the board of directors created by death, resignation, removal
(which may only be for cause), or failure of the shareholders to elect the entire class of directors to be elected at any election of
directors or for any other reason, may be filled only by an affirmative vote of a majority of the remaining directors then in office,
even if less than a quorum, at any special meeting called for that purpose or at any regular meeting of the board of directors. None
of our directors is a party to service contracts with us providing for benefits upon termination of employment.
During the fiscal year ended December 31, 2023, the full board of directors held four meetings. Each director attended all of the
meetings of committees of which the director was a member in person or electronically. Our board of directors has determined
that each of Messrs. Sica, Megalou, Wikborg and Ms. Holth are independent within the current meanings of independence em-
ployed by the corporate governance rules of the NYSE and the SEC. Shareholders who wish to send communications on any topic
to the board of directors or to the independent directors as a group, or to the chairman of the audit committee, Mr. Frank Sica, or
to the chairman of the corporate governance, nominating and compensation committee, Mr. Ole Wikborg, may do so by writing to
our Secretary, Dr. Loukas Barmparis, Safe Bulkers, Inc., e-mail: directors@safebulkers.com.
Corporate Governance
The board of directors and our Company’s management have engaged in an ongoing review of our corporate governance practices
in order to oversee our compliance with the applicable corporate governance rules of the NYSE and the SEC.
We have adopted a number of key documents that are the foundation of the Company’s corporate governance, including:
~ a Code of Business Conduct and Ethics for all officers and employees, which incorporates a Code of Ethics for directors and
a Code of Conduct for corporate officers;
~ a Corporate Governance, Nominating and Compensation Committee Charter;
~ an Audit Committee Charter; and
~ an Environmental, Social and Governance Committee Charter.
These documents and other important information on our governance are posted on our website and may be viewed at
http://www.safebulkers.com. We will also provide a paper copy of any of these documents upon the written request of a stock-
holder. shareholders may direct their requests to the attention of our Secretary, Dr. Loukas Barmparis, Safe Bulkers, Inc., e-mail:
directors@safebulkers.com. Our website, and the information contained on, or hyperlinked from, our website are not part of this
Annual Report, other than the documents that we file with the SEC that are expressly incorporated herein or therein by reference.
Committees of the Board of Directors
Audit Committee
Our audit committee consists of Ole Wikborg, Christos Megalou, Kristin H. Holth and Frank Sica, as chairman. Our board of direc-
tors has determined that Frank Sica qualifies as an audit committee “financial expert,” as such term is defined in Regulation S-K
promulgated by the SEC. The audit committee is responsible for:
~ the appointment, compensation, retention and oversight of independent auditors and approving any non-audit services
performed by such auditor;
~ assisting the board of directors in monitoring the integrity of our financial statements, the independent auditors’ qualifica-
tions and independence, the performance of the independent accountants and our internal audit function and our compli-
ance with legal and regulatory requirements;
~ discussing the annual audited financial and quarterly statements with management and the independent auditors;
~ discussing earnings press releases, as well as financial information and earnings guidance provided to analysts and rating
agencies;
~ discussing policies with respect to risk assessment and risk management;
~ meeting separately, and periodically, with management, internal auditors and the independent auditor;
~ reviewing with the independent auditor any audit problems or difficulties and management’s responses;
~ setting clear hiring policies for employees or former employees of the independent auditors;
~ annually reviewing the adequacy of the audit committee’s written charter, the internal audit charter, the scope of the
annual internal audit plan and the results of internal audits;
~ reporting regularly to the full board of directors; and
~ handling such other matters that are specifically delegated to the audit committee by the board of directors from time to time.
Corporate Governance, Nominating and Compensation Committee
Our corporate governance, nominating and compensation committee consists of Christos Megalou, Frank Sica, Kristin H. Holth
and Ole Wikborg, as chairman. The corporate governance, nominating and compensation committee is responsible for:
~ nominating candidates, consistent with criteria approved by the full board of directors, for the approval of the full board of
directors to fill board vacancies as and when they arise, as well as putting in place plans for succession, in particular, of the
chairman of the board of directors and executive officers;
~ selecting, or recommending that the full board of directors select, the director nominees for the next annual meeting of
shareholders;
~ determining or administering our long-term incentive plans, including any equity based plans and grants under such plans;
~ developing and recommending to the full board of directors corporate governance guidelines applicable to us and keeping
such guidelines under review;
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~ overseeing the evaluation of the board of directors and management;
~ reviewing regularly the board of directors structure, size and composition, taking into account the importance of a diverse
composite mix of ethnicities, ages, gender, race, geographic locations, education and professional skills, backgrounds and
experience, among other characteristics;
~ maintaining a commitment to supporting, valuing and leveraging diversity in the composition of the Board among other
qualities that the board of directors believes serve the best interest of the Company and its shareholders; and
~ handling such other matters that are specifically delegated to the corporate governance, nominating and compensation
committee by the board of directors from time to time.
ESG Committee
Our environmental, social and governance committee consists of six directors, Frank Sica, Ole Wikborg, Christos Megalou, Kristin
H. Holth, Dr. Loukas Barmparis and Polys Hajioannou. The president of the Company, Dr. Loukas Barmparis, will lead the manage-
ment team on ESG matters and report to the ESG Committee. The Committee reviews the Company’s ESG performance and en-
sures governance oversight by the board of directors focused on ESG strategy and implementation, consistent with the Company’s
priorities outlined in our sustainability report. Moreover, the environmental, social and governance committee is responsible for:
~ reviewing and supporting the ESG guidelines, strategic targets, policies and objectives which have been developed and
recommended by the management team and approved by the board of directors;
~ supporting the development of the Company’s overall ESG strategic direction, providing the executive management and the
board of directors with ESG insights on significant trends across the ESG agenda;
~ reviewing and recommending to the board of directors the approval of an annual ESG report; and
~ reviewing the Company’s ESG performance and ensuring governance oversight by the board of directors of the ESG strat-
egy and implementation, based on the adopted reporting framework and relevant key performance indicators.
D. Employees
Our executive officers are provided by our Managers. As of December 31, 2023, our Managers employed approximately 948
people serving on board the vessels in our fleet, and approximately 154 people on shore.
E. Share Ownership
The Common Stock and Preferred Shares beneficially owned by our directors and executive officers and/or companies affiliated
with these individuals is included in “Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders” below.
Equity Compensation Plans
We have agreed to provide the chairman of the audit committee, Mr. Frank Sica, as part of his remuneration, the annual equiva-
lent of $60,000 in the form of shares of our Common Stock, and our non-executive independent directors, Mr. Ole Wikborg,
Mr. Christos Megalou and Ms. Kristin H. Holth, as part of their remuneration, the annual equivalent of $30,000 each, in the
form of shares of our Common Stock.
F. Disclosure of Action to Recover Erroneously Awarded Compensation
Not Applicable.
ITEM 7.
MAJOR SHAREHOLDERS
AND RELATED PARTY TRANSACTIONS
A. Major Shareholders
The following table sets forth certain information regarding the beneficial ownership of our outstanding Common Stock and Pre-
ferred Shares as of February 16, 2024 held by:
~ each person or entity that we know beneficially owns 5.0% or more of our Common Stock;
~ our officers and directors; and
~ all our directors and officers as a group.
Beneficial ownership is determined in accordance with the rules of the SEC. In general, a person who has voting power or invest-
ment power with respect to securities is treated as a beneficial owner of those securities.
Beneficial ownership does not necessarily imply that the named person has the economic or other benefits of ownership. For
purposes of this table, shares subject to options, warrants or rights or shares exercisable within 60 days of February 16, 2024
are considered as beneficially owned by the person holding those options, warrants or rights. Each stockholder is entitled to one
vote for each share held. The applicable percentage of ownership for each stockholder is based on 111,617,369 shares of Com-
mon Stock outstanding as of February 16, 2024. Information for certain holders is based on their latest filings with the SEC or
information delivered to us. Except as noted below, the address of all shareholders, officers and directors identified in the table
and the accompanying footnotes below is in care of our principal executive offices.
Identity of Person or
Group
5% Beneficial Owners:
Number of
Shares of
Common
Stock
Owned
Percentage
of Common
Stock
Number of
Shares of
Series C
Preferred
Shares
Percentage
of Series C
Preferred
Shares
Number of
Shares of
Series D
Preferred
Shares
Percentage
of
Series D
Preferred
Shares
Vorini Holdings Inc.(1)
19,426,015
17.40%
Bellapais Maritime Inc.(1)
5,000,000
Kyperounta Maritime Inc.(1)
5,000,000
Lefkoniko Maritime Inc.(1)
Akamas Maritime Inc.(1)
Chalkoessa Maritime Inc.(1)
Officers and Directors:
5,000,000
8,555,412
5,400,000
4.48%
4.48%
4.48%
7.66%
4.84%
Polys Hajioannou (1)
48,381,427
43.35%
*
*
*
*
*
*
*
—
*
*
*
*
*
*
*
—%
Dr. Loukas Barmparis
Konstantinos Adamopoulos
Ioannis Foteinos
Marina Hajioannou
Kristin H. Holth
Frank Sica
Ole Wikborg
Christos Megalou
All executive officers
and directors as a group
(9 persons)
* Less than 1%
(1)
Controlled by Polys Hajioannou.
—
—
—
—
—
—
—
—
—
—
—
—
*
*
*
—%
—%
—%
—%
—%
—%
—
—
—
—
—
—
—%
—%
—%
—%
—%
—%
—%
36,575
1.14%
*
*
*
—%
—%
—%
—%
—%
*
*
*
—
—
—
—
—
*
*
*
—%
—%
—%
—%
—%
49,083,777
43.98%
12,752
1.58%
75,575
2.37%
In June 2008, we completed a registered public offering of our shares of Common Stock in which the selling stockholder was
Vorini Holdings Inc., and our Common Stock began trading on the NYSE. Our major shareholders have the same voting rights as
our other shareholders. As of February 16, 2024, we had 16 shareholders of record; three of these shareholders of record were
located in the U.S. and held an aggregate 70,251,592 shares of Common Stock, representing approximately 62.94% of our
outstanding shares of Common Stock. However, one of the U.S. shareholders of record is Cede & Co., a nominee of The Depository
Trust Company, which holds 69,888,032 shares of our Common Stock. Accordingly, we believe that the shares held by Cede &
Co. include shares of Common Stock beneficially owned by both holders in the U.S. and non-U.S. beneficial owners. We are not
aware of any arrangements the operation of which may at a subsequent date result in our change of control. We are not aware of
any significant changes in the percentage ownership held by any major shareholders since our initial public offering.
Polys Hajioannou owns or controls approximately 43.35% of our outstanding Common Stock. He is able to significantly affect
the outcome of matters on which our shareholders are entitled to vote, including the election of our entire board of directors and
other significant corporate actions. Shares of our Common Stock held or controlled by Polys Hajioannou do not have different or
unique voting rights.
B. Related Party Transactions
Management Affiliations
Our chief executive officer, Polys Hajioannou controls our Managers and one company which leases office space to us. Our Man-
agers, along with the predecessor to Safety Management, have provided services to vessels since 1965 and continue to provide
technical, administrative, commercial and certain other services which support our business, as well as comprehensive ship man-
agement services such as technical supervision and commercial management, including chartering our vessels, pursuant to our
Management Agreements described below.
Management Agreements
Under our Management Agreements, our Managers are responsible for providing us with executive, technical, administrative com-
mercial and certain other services, which include the following:
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Technical Services
These services include managing day-to-day vessel operations, performing general vessel maintenance, ensuring regulatory
compliance and compliance with the law of the flag state of each vessel and of the places where the vessel operates, ensuring
classification society compliance, supervising the maintenance and general efficiency of vessels, arranging the hire of qualified
officers and crew, training, transportation and lodging, insurance (including handling and processing all claims) of, and appropriate
investigation of any charterer concerns with respect to, the crew, conducting union negotiations concerning the crew, perform-
ing normally scheduled drydocking and general and routine repairs, arranging insurance for vessels (including marine hull and
machinery, protection and indemnity and risks insurance), purchasing stores, supplies, spares, lubricating oil and maintenance
capital expenditures for vessels, appointing supervisors and technical consultants, providing technical support, shoreside support
and shipyard supervision, and attending to all other technical matters necessary to run our business.
Commercial Services
These services include chartering the vessels that we own, assisting in our chartering, locating, purchasing, financing and nego-
tiating the purchase and sale of our vessels, supervising the design and construction of newbuilds, and such other commercial
services as we may reasonably request from time to time.
Administrative Services
These services include providing or arranging for all services necessary to the engagement, employment and compensation of cer-
tain of our employees, officers, consultants and directors, administering payroll services, assistance with the preparation of our tax
returns and financial statements, assistance with corporate and regulatory compliance matters not related to our vessels, procur-
ing legal and accounting services, assistance in complying with U.S. and other relevant securities laws, human resources (including
provision of our executive officers and directors of our subsidiaries), cash management and bookkeeping services, development and
monitoring of internal audit controls, disclosure controls and information technology, assistance with all regulatory and reporting
functions and obligations, furnishing any reports or financial information that might be requested by us and other non-vessel related
administrative services, assistance with office space, providing legal and financial compliance services, overseeing banking services
(including the opening, closing, operation and management of all of our accounts, including making deposits and withdrawals reason-
ably necessary for the management of our business and day-to-day operations), arranging general insurance and director and officer
liability insurance (at our expense), providing all administrative services required for any subsequent debt and equity financings and
attending to all other administrative matters necessary to ensure the professional management of our business.
Reporting Structure
Our Managers report to us and to our board of directors through our executive officers.
Compensation of Our Managers
On May 29, 2008, Safe Bulkers signed a management agreement with Safety Management and on May 29, 2015, Safe Bulkers
signed a management agreement with Safe Bulkers Management (collectively the “Old Management Agreements”).
On May 29, 2018, following the expiration of the Old Management Agreements, the Company signed the Original Management
Agreements with the Managers, which have an initial term of three years expiring on May 28, 2021 and could be extended for
two additional terms of three years each. The fees provided by the Original Management Agreements were fixed until May 29,
2021 and upon mutual agreement with the Managers, could be adjusted for a subsequent term of three years each time in May
29, 2021 and May 29, 2024. On May 29, 2021, following the expiration of the initial three-year term, the Original Management
Agreements were extended for an additional term of three years, until May 29, 2024. On April 1, 2022, Safe Bulkers signed the
Management Agreement with Safe Bulkers Management Monaco Inc., with the initial term expiring on May 29, 2024, which can
be extended for one additional term of three years.
Under our Management Agreements, in return for providing executive officers and technical, commercial and administrative ser-
vices, our Managers receive a ship management fee of €875 per day per managed vessel for vessels in our fleet and $250 per
managed vessel per day for bareboat charters and one of our Managers receives an annual ship management fee of €3.50 million.
For the three year period from May 29, 2018 to May 28, 2021, the annual ship management fee was €3.0 million. Further, our
Managers receive a commission of 1.0% based on the contract price of any vessel bought and a commission of 1.0% based on the
contract price of any vessel sold by it on our behalf, including any contracted newbuild. We also pay our Managers a supervision
fee of $550,000 per newbuild, of which 50.0% is payable upon the signing of the relevant supervision agreement, and 50.0% is
payable upon successful completion of the sea trials of each newbuild, for the on-premises supervision of all newbuilds we have
agreed to acquire pursuant to shipbuilding contracts, memoranda of agreement, or otherwise.
The management fees do not cover capital expenditure, financial costs and operating expenses for our vessels and our general and
administrative expenses such as directors, and officers’ liability insurance, legal and accounting fees and other similar third party
expenses. More specifically, we reimburse expenses incurred on our behalf by our Managers or their personnel directly related to
the operation and management of our vessels, such as:
~ interest, principal and other financial costs;
~ voyage expenses;
~ vessel operating expenses including crewing costs, surveyor’s attendance fees, bunkers, lubricant oils, spares, survey fees,
classification society fees, maintenance and repair costs, tonnage taxes and vetting expenses;
~ commissions, remuneration or disbursements due to lawyers, brokers, agents, surveyors, consultants, financial advisors,
investment bankers, insurance advisors;
~ deductibles, insurance premiums and/or P&I calls; and
~ postage, communication, traveling, victualing and other out of pocket expenses
Each year, our Managers prepare and submit to us a detailed draft budget for the next calendar year, which includes a statement
of estimated revenue, estimated general and administrative expenses and a proposed budget for capital expenditures, repairs or
alterations. Once approved by us, this draft budget becomes the approved budget.
Term and Termination Rights
Subject to the termination rights described below, the current term of the Management Agreements will expire on May 29, 2024
and is renewable for an additional three-year period. The Management Agreements will be automatically extended on a three-year
basis, subject to our ability to terminate each Management Agreement upon written notice at least 24 months prior to the end of
the current term. Each Management Agreement will expire on May 29, 2027 and we expect to enter into new agreements with
the Managers upon their expiration. The terms of any such new agreements have not yet been determined.
Our Managers’ Termination Rights
Each Manager may terminate the applicable Management Agreement prior to the end of its term if:
~ an aggregate amount in excess of $100,000 payable by us is not paid when due or if due on demand, within 20 business
days following demand by the Manager;
~ we default in the performance of any other material obligation under the Management Agreement and the matter is unre-
solved within 20 business days after we receive written notice of such default from the Manager;
~ the management fee determined by arbitration in respect of any three-year period following the initial term is unsatisfacto-
ry to the Manager, in which case the Manager may terminate the Management Agreement effective at the end of such term;
~ any acquisition of our shares or a merger, consolidation or similar transaction results in any “person” or “group” acquiring
40.0% or more of the total voting power of our or the resulting entity’s outstanding voting securities, and such percentage
represents a higher percentage of such voting power than that held directly or indirectly by Polys Hajioannou;
~ the approval by our shareholders of a proposed merger, consolidation, recapitalization or similar transaction, as a result of
which any person acquiring our shares of Common Stock becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of 40.0% or more of the total voting power of the outstanding voting securities of
the resulting entity following such transaction, and such percentage represents a higher percentage of such voting power
than that held directly or indirectly by Polys Hajioannou; or
~ there is a change in directors after which at least one of the members of our board of directors is not a continuing director.
“Continuing directors” means, as of any date of determination, any member of our board of directors who was:
~ a member of our board of directors on May 29, 2018; or
~ nominated for election or elected to our board of directors with the approval of a majority of the directors then in office who
were either directors on May 29, 2018 or whose nomination or election was previously so approved.
Our Termination Rights
In addition to certain standard termination rights, we may terminate each Management Agreement prior to the end of its term if:
~ the Manager commits a willful and material breach in the performance of any material obligation under our Management
Agreement and the matter is not resolved within 40 business days after the Manager receives from us written notice of
such default;
~ an aggregate amount in excess of $100,000 payable by the Manager to us or third parties under our Management Agree-
ment is not paid or accounted for within 10 business days following written notice by us; or
~ any time after May 29, 2024, upon our delivery of 12 months’ written notice to the Manager (a “Third Term Termination
Notice”).
A “willful and material breach” means, a material breach of the applicable Management Agreement, as determined by a final,
non-appealable judgment of a court or independent tribunal of competent jurisdiction, that is a consequence of a deliberate act
undertaken by the breaching party, with knowledge that the taking of such act would cause a breach of the applicable Management
Agreement, and which act has subjected the Company and its subsidiaries, taken as a whole, to uninsured liability, individually or
in the aggregate, in an amount in excess of $100,000,000.
Termination Fees
In the event that either Management Agreement is terminated prior to the fully-extended expiration date other than pursuant to
(a) the Company’s termination of the applicable Management Agreement due to the Manager’s ceasing to conduct business, insol-
vency or force majeure, (b) a termination resulting from the Manager’s willful and material breach of the applicable Management
Agreement or (c) a termination pursuant to a validly-delivered termination notice by the Company to the Manager (other than
a Third Term Termination Notice), then, within three business days of such termination, the Company shall pay to Safe Bulkers
Management an amount in cash equal to the Management Fees paid or payable to each Manager, in the aggregate, during the 36
months preceding the applicable termination.
Non-Competition
Each Manager has agreed that, during the term of our Management Agreement and for one year after its termination, such Manag-
er will not provide any management services to, or with respect to, any drybulk vessels, other than in the following circumstances:
(a) pursuant to its involvement with us; or
(b) with respect to drybulk vessels that are owned or operated by companies affiliated with our chief executive officer or his
family members, subject in each case to compliance with, or waivers of, the restrictive covenant agreements entered into
between us and companies affiliated with our chief executive officer.
Each Manager has also agreed that if one of our drybulk vessels and a drybulk vessel owned or operated by a company affiliated
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with our chief executive officer are both available and meet the criteria for a charter being fixed by such Manager, our drybulk
vessel will receive such charter.
Sale of Our Manager
Each Manager has agreed that, during the term of the Management Agreement and for one year after its termination, each Man-
ager will not transfer, assign, sell or dispose of all or substantially all of its business that is necessary for the performance of
its services under the Management Agreement without the prior written consent of our board of directors. Furthermore, during
such period, in the event of any proposed change in control of the Manager, we have a 30-day right of first offer to purchase such
Manager. Each Management Agreement defines a “proposed change in control of the Manager” to mean (a) the approval by the
board of directors of the Manager or the shareholders of the Manager of a proposed sale of all or substantially all of the assets
or property of the Manager necessary for the performance of its services under the Management Agreement; or (b) the approval
of any transaction that would result in: (i) Polys Hajioannou or Vorini Holdings Inc., or any entity controlled by, or under common
control with, any of the above, beneficially owning, directly or indirectly, less than 60.0% of the outstanding voting securities
or voting power of the Manager or Machairiotissa Holdings Inc. (the sole shareholder of the Manager), respectively, or (ii) Polys
Hajioannou or Vorini Holdings Inc., or any entity controlled by, or under common control with, any of the above, together with all
directors, officers and employees of the Manager beneficially owning, directly or indirectly, less than 80.0% of the outstanding
voting securities or voting power of the Manager or Machairiotissa Holdings Inc., respectively.
Each Management Agreement also provides us the right to obtain certain information about the ownership of the Manager.
The foregoing description of the Management Agreements does not purport to be complete and is qualified in its entirety by
reference to the Management Agreements, copies of which are attached as Exhibit 4.1 and Exhibit 4.2 and incorporated herein
by reference.
Restrictive Covenant Agreements
Under the amended restrictive covenant agreements entered into with us, Polys Hajioannou, Vorini Holdings Inc., Machairiotissa
Holdings Inc., or any entity controlled by, or under common control with, any of the above (together, the “Hajioannou Entities”),
have agreed to restrictions on their ownership or operation of any drybulk vessels or the acquisition, investment in or control of
any business involved in the ownership or operation of drybulk vessels, subject to the exceptions described below.
In the case of Polys Hajioannou, the restricted period continues until the later of (a) one year following the termination of his ser-
vice as our director and (b) one year following the termination of his employment with us. In the case of the Hajioannou Entities,
the restricted period continues until one year following the termination of both Management Agreements.
Notwithstanding these restrictions, Polys Hajioannou and the Hajioannou Entities are permitted to engage in the restricted activi-
ties during the restricted periods in the following circumstances:
(a) pursuant to their involvement with us;
(b) pursuant to their involvement with a Manager, subject to compliance with, or waivers of, the applicable Management
Agreement;
(c) with respect to certain permitted acquisitions (as defined below), provided that (i) any commercial management of drybulk
vessels controlled by the restricted individuals and entities in connection with such permitted acquisition is performed by
either of the Managers and (ii) the restricted individuals and entities comply with the requirements for permitted acquisi-
tions described below;
(d) with respect to the direct or indirect ownership, operation or financing by our chief executive officer of a maximum of eight
drybulk vessels on the water at any one time and an unlimited number of contracts with shipyards for newbuild drybulk
vessels as part of his estate or family planning, provided that (i) such drybulk vessels or newbuilding contracts have been
first offered to us and refused by the majority of our independent directors and (ii) such vessels have been acquired on
pricing terms and conditions that are not more favorable than those offered to us;
(e) pursuant to their passive ownership of up to 9.99% of the outstanding voting securities of any publicly traded company
that is engaged in the business of owning or operating drybulk vessels; and
(f) in the case of Mr. Hajioannou, with respect to any investment company which has been developed by a permitted acquisition;
provided, that Mr. Hajioannou (i) does not own in excess of 35% of such other company (“Minority Invested Business”), (ii)
does not increase his ownership except as a result of an additional permitted acquisition which is approved by a majority of our
independent directors, (iii) presents all business opportunities related to drybulk vessels to Safe Bulkers in the first instance
and (iv) delivers to Safe Bulkers an annual report setting forth Mr. Hajioannou’s aggregate percentage ownership in the Minor-
ity Invested Business and additional information on the vessels owned by such Minority Invested Business. For purposes of
the restrictive covenant agreements, Polys Hajioannou shall not be deemed to control any such Minority Invested Business
as a result of his service on the board of directors or other governing body of such Minority Invested Business so long as he is
not a party to any arrangement relating to investment or management decisions. The commercial management of any drybulk
vessel owned, operated or financed by an investment company of which Polys Hajioannou does not own in excess of 35% shall
not be performed by either of our Managers or any other person or entity in which Mr. Hajioannou has an ownership interest.
As noted above, Polys Hajioannou and the Hajioannou Entities are permitted to engage in certain restricted activities with respect to
two types of permitted acquisitions. One such permitted acquisition is an acquisition of a drybulk vessel or an acquisition or invest-
ment in a drybulk vessel business on terms and conditions as to price that are not more favorable, and on such other terms and con-
ditions that are not materially more favorable, than those first offered to us and refused by a majority of our independent directors.
A second type of permitted acquisition is an acquisition of a group of vessels or a business that includes non-drybulk vessels and non-
drybulk vessel businesses, provided that less than 50.0% of the fair market value of the acquisition is attributable to drybulk vessels
or drybulk vessel businesses. Under this second type of permitted acquisition, we must be promptly given the opportunity to buy
the drybulk vessels or drybulk vessel businesses included in the acquisition for their fair market value plus certain break-up costs.
Both of these types of permitted acquisitions require that the commercial management of any drybulk vessels acquired as permitted
acquisitions be performed by either of our Managers. The commercial management of any drybulk vessel or contract for a newbuild
drybulk vessel owned, operated or financed by Polys Hajioannou and entities affiliated with him for his estate or family planning
purposes is not required to be managed by either of our Managers and the management of any vessels in a Minority Owned Business
shall not be performed by either of our Managers or any other person or entity in which Mr. Hajioannou has an ownership interest.
Polys Hajioannou and the Hajioannou Entities have also agreed that if one of our drybulk vessels and a drybulk vessel owned or
operated by any of the Hajioannou Entities are both available and meet the criteria for a charter being fixed by either of our Man-
agers, our drybulk vessels will receive such charter.
The restrictive covenant agreements further provide that for each drybulk vessel or contract for a newbuild drybulk vessel owned,
operated or financed by Polys Hajioannou or a Hajioannou Entity other than through us, Polys Hajioannou or the applicable Ha-
jioannou entity is required to deliver to us a written report with respect to such vessel or newbuild within the first quarter of each
fiscal year. The report for any drybulk vessel is required to include certain information, such as charter information with respect
to charters arranged or in place during the period between the first day of the previous fiscal year and the date of the report,
including the type of charter employment (e.g., time or voyage charters), the charter rate, commissions paid to brokers or other
third parties, the charter period and the total revenues earned with respect to charters conducted during such period, running
costs with respect to such drybulk vessel in the previous fiscal year, expected date of next drydocking and the estimated cost of
such drydocking, and date of the next special survey. The report for any contracted newbuild drybulk vessel is required to include
charter information, if any, with respect to charters arranged as of the date of the report, including the type of charter employ-
ment, the charter rate, commissions paid to brokers or other third parties and the charter period.
The foregoing description of the restrictive covenant agreements, as amended, does not purport to be complete and is qualified in
its entirety by reference to the restrictive covenant agreements, copies of which are attached as Exhibit 4.3, Exhibit 4.4, Exhibit
4.11 and Exhibit 4.12, and incorporated herein by reference.
Registration Rights Agreement
In connection with the closing of our initial public offering, we entered into a registration rights agreement with Vorini Holdings
Inc., one of our principal shareholders, pursuant to which we have granted it and certain of its transferees the right, under certain
circumstances and subject to certain restrictions, to require us to register under the Securities Act shares of our Common Stock
held by those persons. Under the registration rights agreement, Vorini Holdings Inc. and certain of its transferees have the right
to request us to register the sale of shares held by them on their behalf and may require us to make available shelf registration
statements permitting sales of shares into the market from time to time over an extended period. In addition, those persons have
the ability to exercise certain piggyback registration rights in connection with registered offerings initiated by us. Vorini Holdings
Inc. currently owns 19,426,015 shares entitled to these registration rights.
Principal executive office lease
The Company leases office space from a company controlled by Polys Hajioannou, at Apt. D11, Les Acanthes, 6, Avenue des Cit-
ronniers, MC98000 Monaco, where our principal executive office is established. The office space lease contract was for a period
from February 2014 until February 2023 with an annual lease payment initially agreed in 2014 in the amount of EUR 63,000
equivalent to $67 as of December 31, 2022. In January 2023, the office space lease contract was renewed with an annual lease
payment in the amount of EUR 86,400 equivalent to $95 as of December 31, 2023, adjusted annually based on the cost of
construction as published in the National Institute of Statistics & Economic Studies of Monaco, plus expenses, and is recorded in
“General and administrative expenses” in the Consolidated Statements of Income.
Credit Facilities
During 2022, the Company entered into an agreement with a financial institution for an amount up to $80.0 million secured by
seven vessels owned by respective subsidiaries of the Company. At the same time, all credit facilities with this financial institu-
tion were refinanced and cancelled, namely a revolving credit facility of the Company signed in 2019 for an original amount of
$20.0 million and increased to $30.0 million in 2020, a credit facility signed in 2020 for an original amount up to $20.0 million
and increased to $25.0 million in 2022, and another credit facility signed in 2021 for an original amount of up to $70.0 million.
During 2023, Eptaprohi, Soffive, Marinouki, Marathassa, Kerasies, Pemer and Lofou agreed with the same financial institution
the extension of the tenor by six months, from June 2028 to December 2028, and a change in the margin of the existing credit
facility entered into in 2022. One of the independent members of the board of directors of the Company currently serves as the
Chief Executive Officer of this financial institution. All above transactions were evaluated and approved by the board of directors
of the Company excluding that independent member of the board of directors of the Company.
Bond issuance
In February 2022, a subsidiary of the Company successfully completed a public offer in Greece of €100.0 million of an unse-
cured bond that was admitted for trading in the Athens Exchange under the ticker symbol SBB1. See “Item 5. OPERATING AND
FINANCIAL REVIEW AND PROSPECTS-—B. Liquidity and Capital Resources—Bond” for more information. One of the independent
members of the board of directors of the Company currently serves as the Chief Executive Officer of the financial institution that
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was the adviser and one of the lead underwriters in the public offer of the Bond. The transaction was evaluated and approved by
the board of directors of the Company excluding that independent member of the board of directors of the Company.
“SB” Since May 7, 2014, our Series C Preferred Shares have been listed on the NYSE under the symbol “SB. PR. C.” Since June
30, 2014, our Series D Preferred Shares have been listed on the NYSE under the symbol “SB. PR. D.”
C. Interests of Experts and Counsel
Not applicable.
ITEM 8.
FINANCIAL INFORMATION
A. Consolidated Statements and Other Financial Information
See “Item 18. Financial Statements” below for more information.
Legal Proceedings
We are not involved in any legal proceedings which may have, or have had, a significant effect on our business, financial position,
results of operations or liquidity, nor are we aware of any other proceedings that are pending or threatened which may have a
significant effect on our business, financial position, results of operations or liquidity.
The nature of our business exposes us to the risk of lawsuits for damages or penalties relating to, among other things, personal
injury, property casualty and environmental contamination. From time to time, we may be subject to legal proceedings and claims
in the ordinary course of business, principally personal injury and property casualty claims. We expect that these claims would be
covered by insurance, subject to customary deductibles. However, such claims, even if lacking merit, could result in the expendi-
ture of significant financial and managerial resources.
Dividend Policy
During 2021, we declared and paid four quarterly consecutive dividends of $0.50 per share of Series C Preferred Shares, total-
ing $4.6 million, and four quarterly consecutive dividends of $0.50 per share of Series D Preferred Shares, totaling $6.4 million.
During 2022, we declared and paid four quarterly consecutive dividends of $0.50 per share of Series C Preferred Shares, total-
ing $2.4 million, and four quarterly consecutive dividends of $0.50 per share of Series D Preferred Shares, totaling $6.4 million.
During 2023, we declared and paid four quarterly consecutive dividends of $0.50 per share of Series C Preferred Shares, totaling
$1.6 million, and four quarterly consecutive dividends of $0.50 per share of Series D Preferred Shares, totaling $6.4 million. In
January 2024, we declared and paid a quarterly dividend of $0.50 per share, of Series C Preferred Shares, totaling $0.4 million,
and of Series D Preferred Shares, totaling $1.6 million.
In March 2022, we re-established paying dividends to our common shareholders. In 2022, we declared and paid four quarterly
consecutive dividends of $0.05 per common share, totaling $24.1 million, and in 2023 we declared and paid four quarterly
consecutive dividends of $0.05 per common share, totaling $22.7 million. The last time we had previously paid dividend on our
shares of common stock was in August 2015. In February 2024, we declared a dividend on the Company’s common stock of
$0.05 per share, totaling $5.9 million, payable on or about March 19, 2024 to shareholders of record at the close of trading of
the Company’s common stock on the NYSE on March 1, 2024.
Our future liquidity needs will impact our dividend policy. The declaration and payment of future dividends, if any, will always be
subject to the discretion of the board of directors of the Company. There is no guarantee that the Company’s board of directors
will determine to issue cash dividends in the future. The timing and amount of any dividends declared will depend on, among other
things: (i) the Company’s earnings, fleet employment profile, financial condition and cash requirements and available sources of li-
quidity; (ii) decisions in relation to the Company’s growth, fleet renewal and leverage strategies; (iii) provisions of Marshall Islands
and Liberian law governing the payment of dividends; (iv) restrictive covenants in the Company’s existing and future debt instru-
ments; and (v) global economic and financial conditions. Our ability to pay dividends may be limited by the amount of cash we can
generate from operations following the payment of fees and expenses and the establishment of any reserves, as well as additional
factors unrelated to our profitability. In addition, cash dividends on our Common Stock are subject to the priority of dividends on
our Preferred Shares. We are a holding company and we depend on the ability of our subsidiaries to distribute funds to us in order
to satisfy our financial obligations and to make dividend payments. See “Item 3. Key Information—D. Risk Factors—Risks Relat-
ing to Our Common Stock and Preferred Shares” for a discussion of the risks related to our ability to pay dividends.
No significant change has occurred since the date of the annual financial statements included in this annual report on Form 20-F,
other than as described in Note 23 - Subsequent Events to our consolidated financial statements included herein.
B. Significant Changes
ITEM 9.
THE OFFER AND LISTING
Trading on the NYSE
Since our initial public offering in the U.S. on May 29, 2008, our Common Stock has been listed on the NYSE under the symbol
ITEM 10.
ADDITIONAL INFORMATION
A. Share Capital
Under our articles of incorporation, our authorized capital stock consists of 200,000,000 shares of Common Stock, par value
$0.001 per share, of which, as of December 31, 2023 and February 16, 2024, 111,607,828 and 111,617,369 shares were
issued and outstanding, respectively, and 20,000,000 shares of blank check preferred stock, par value $0.01 per share, of
which, as of December 31, 2023 and February 16, 2024, 804,950 shares of Series C Preferred Shares and 3,195,050 shares
of Series D Preferred Shares were issued and outstanding. Of this blank check preferred stock, 1,000,000 shares have been des-
ignated Series A Participating Preferred Stock in connection with our adoption of a shareholders rights plan as described below
under “—Shareholders Rights Plan.” All of our shares of stock are in registered form.
Please see Note 9 of the consolidated financial statements included elsewhere in this annual report for a discussion of the history
of our share capital.
B. Articles of Incorporation and Bylaws
Our purpose, as stated in our articles of incorporation, is to engage in any lawful act or activity for which corporations may now
or hereafter be organized under the BCA. Our articles of incorporation and bylaws do not impose any limitations on the ownership
rights of our shareholders.
The rights of our shareholders are set forth in our articles of incorporation and bylaws, as well as the BCA. Amendments to our
articles of incorporation require the affirmative vote of the holders of a majority of all outstanding shares entitled to vote, except
that amendments to certain provisions of our articles of incorporation dealing with the rights of shareholders, the board of directors,
our bylaws and amendments to the articles of incorporation require the affirmative vote of at least 75.0% of all outstanding shares
entitled to vote. Amendments to our bylaws require the affirmative vote of at least 75.0% of all outstanding shares entitled to vote.
Under our bylaws, annual shareholder meetings will be held at a time and place selected by our board of directors. The meetings
may be held inside or outside of the Republic of the Marshall Islands. Special meetings may be called by the chairman of the board
of directors, the chief executive officer or by the chief executive officer or secretary at the request of a majority of the board of
directors. Our board of directors may set a record date between 15 and 60 days before the date of any meeting to determine the
shareholders that will be eligible to receive notice and vote at the meeting. Our bylaws permit shareholder action by unanimous
written consent.
We are registered with the Registrar of Corporations of the Marshall Islands under registration number 27394.
Directors
Under our articles of incorporation and bylaws, our directors are elected by a plurality of the votes cast at each annual meeting of
the shareholders by the holders of shares entitled to vote in the election. There is no provision for cumulative voting. Our articles
of incorporation and bylaws provide for a staggered board of directors whereby directors shall be divided into three classes: Class
I, Class II and Class III. The term of our Class I directors expires in 2024, the term of our Class II directors expires in 2025 and the
term of our Class III directors expires in 2026. At each annual meeting, individuals elected as directors are elected to hold office
until the third succeeding annual meeting.
Pursuant to the provisions of our bylaws, the board of directors may change the number of directors to not less than three, nor
more than fifteen, by a vote of a majority of the entire board of directors. Each director shall be elected to serve until the third
succeeding annual meeting of shareholders and until his or her successor shall have been duly elected and qualified, except in the
event of death, resignation or removal. A vacancy on the board of directors created by death, resignation, removal (which may
only be for cause), or failure of the shareholders to elect the entire class of directors to be elected at any election of directors or
for any other reason may be filled only by an affirmative vote of a majority of the remaining directors then in office, even if less
than a quorum, at any special meeting called for that purpose or at any regular meeting of the board of directors. The board of
directors has the authority to fix the amounts which shall be payable to the non-employee members of our board of directors for
attendance at any meeting or for services rendered to us.
Common Stock
Each outstanding share of Common Stock entitles the holder to one vote on all matters submitted to a vote of shareholders. Sub-
ject to preferences that may be applicable to any outstanding shares of preferred stock, holders of shares of Common Stock are
entitled to receive ratably all dividends, if any, declared thereon by our board of directors out of funds legally available for divi-
dends. Upon our dissolution or liquidation or the sale of all or substantially all of our assets, after payment in full of all amounts
required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of our
Common Stock will be entitled to receive pro rata our remaining assets available for distribution. Holders of Common Stock do not
have conversion, redemption or preemptive rights to subscribe to any of our securities. All outstanding shares of Common Stock
are fully paid and non-assessable. The rights, preferences and privileges of holders of Common Stock are subject to the rights of
the holders of any shares of preferred stock which we may issue in the future. Our Common Stock is not subject to any sinking
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fund provisions and no holder of any shares will be required to make additional contributions of capital with respect to our shares
in the future. There are no provisions in our articles of incorporation or bylaws discriminating against a shareholder because of
his or her ownership of a particular number of shares.
We are not aware of any limitations on the rights to own our Common Stock, including rights of non-resident or foreign sharehold-
ers to hold or exercise voting rights on our Common Stock, imposed by foreign law or by our articles of incorporation or bylaws.
Preferred Stock
Our articles of incorporation authorize our board of directors, without any further vote or action by our shareholders, to issue up
to 20,000,000 shares of blank check preferred stock, of which 1,000,000 shares have been designated Series A Participating
Preferred Stock, in connection with our adoption of a shareholder rights plan as described below under “—Shareholders Rights
Plan,” and as of December 31, 2023 and February 16, 2024, 804,950 have been designated as Series C Preferred Shares and
3,195,050 have been designated as Series D Preferred Shares, and to determine, with respect to any series of preferred stock
established by our board of directors, the terms and rights of that series, including:
~ the designation of the series;
~ the number of shares of the series;
~ the preferences and relative, participating, option or other special rights, if any, and any qualifications, limitations or
restrictions of such series; and
~ the voting rights, if any, of the holders of the series.
Shareholders Rights Plan
General
Our board of directors declared a dividend of one right for each outstanding share of Safe Bulkers’ common stock. The dividend
was paid on August 20, 2020 to the shareholders of record on August 17, 2020. As a result, each share of our Common Stock
includes a right that entitles the holder to purchase from us a unit consisting of one-thousandth of a share of our Series A Partici-
pating Preferred Stock at a purchase price of $5.20 per unit, subject to specified adjustments. The rights are issued pursuant to
a shareholders rights agreement between us and American Stock Transfer & Trust Company, LLC as rights agent. Until a right is
exercised, the holder of a right will have no rights to vote or receive dividends or any other shareholders rights.
The rights may have anti-takeover effects. The rights will cause substantial dilution to any person or group that attempts to ac-
quire us without the approval of our board of directors. As a result, the overall effect of the rights may be to render more difficult
or discourage a merger, tender offer or other business combination involving the Company that is not supported by our board of
directors. Because our board of directors can approve a redemption of the rights or a permitted offer, the rights should not inter-
fere with a merger or other business combination approved by our board of directors. The adoption of the rights agreement was
approved by our board of directors on August 6, 2020.
We have summarized the material terms and conditions of the rights agreement and the rights below. For a complete description
of the rights, we encourage you to read the shareholder rights agreement, which we have filed as an exhibit to this annual report.
Detachment of the Rights
The rights are attached to all certificates representing our outstanding common stock and will attach to all common stock certifi-
cates we issue prior to the rights distribution date that we describe below. The rights are not exercisable until after the rights dis-
tribution date and will expire at the close of business on August 5, 2030, unless we redeem or exchange them earlier as described
below. The rights will separate from the common stock and a rights distribution date will occur, subject to specified exceptions,
on the earlier of the following two dates:
(i) ten days following the first public announcement that a person or group of affiliated or associated persons or an “acquiring
person” has acquired or obtained the right to acquire beneficial ownership of 10% or more of our outstanding common
stock; or
(ii) ten business days following the start of a tender or exchange offer that would result, if closed, in a person becoming an
“acquiring person.”
Derivative positions are included for purposes of determining beneficial ownership.
Shares owned by Polys Hajioannou, the Company’s Chairman and Chief Executive Officer, or Nicolaos Hadjioannou and entities
controlled by and/or affiliated or associated with Mr. Hajioannou or Mr. Hadjioannou or members or their respective families are
not subject to the restrictions of the Rights Plan and shareholders who beneficially owned 10% or more of Safe Bulkers’ out-
standing common stock prior to the first public announcement by the Company of the adoption of the Rights Plan will not trigger
any penalties under the rights plan so long as they do not acquire beneficial ownership of any additional shares of common stock
at a time when they still beneficially own 10% or more of such common stock.
Until the rights distribution date:
~ our common stock certificates will evidence the rights, and the rights will be transferable only with those certificates; and
~ any new shares of common stock will be issued with rights, and new certificates will contain a notation incorporating the
shareholders rights agreement by reference.
As soon as practicable after the rights distribution date, the rights agent will mail certificates representing the rights to holders of
record of common stock at the close of business on that date. As of the rights distribution date, only separate rights certificates
will represent the rights.
We will not issue rights with any shares of common stock we issue after the rights distribution date, except as our board of direc-
tors may otherwise determine.
Flip-In Event
A “flip-in event” will occur under the shareholders rights agreement when a person becomes an acquiring person. If a flip-in
event occurs and we do not redeem the rights as described under the heading “—Redemption of Rights” below, each right,
other than any right that has become void, as described below, will become exercisable at the time it is no longer redeemable
for the number of shares of common stock, or, in some cases, cash, property or other of our securities, having a current market
price equal to two times the exercise price of such right.
If a flip-in event occurs, all rights that then are, or in some circumstances that were, beneficially owned by or transferred to an
acquiring person or specified related parties will become void in the circumstances which the shareholder rights agreement
specifies.
Flip-Over Event
A “flip-over event” will occur under the shareholder rights agreement when, at any time after a person has become an acquiring
person:
~ we are acquired in a merger or other business combination transaction; or
~ 50% or more of our assets, cash flows or earning power is sold or transferred.
If a flip-over event occurs, each holder of a right, other than any right that has become void as we describe under the heading
“—Flip-in event” above, will have the right to receive the number of shares of common stock of the acquiring company having a
current market price equal to two times the exercise price of such right.
Antidilution
The number of outstanding rights associated with our common stock is subject to adjustment for any stock split, stock dividend
or subdivision, combination or reclassification of our common stock occurring prior to the rights distribution date. With some
exceptions, the shareholders rights agreement does not require us to adjust the exercise price of the rights until cumulative ad-
justments amount to at least 1% of the exercise price. It also does not require us to issue fractional shares of our preferred stock
that are not integral multiples of one one-hundredth of a share, and, instead, we may make a cash adjustment based on the market
price of the common stock on the last trading date prior to the date of exercise. The rights agreement reserves us the right to
require, prior to the occurrence of any flip-in event or flip-over event, that, on any exercise of rights, that a number of rights must
be exercised so that we will issue only whole shares of stock.
Redemption of Rights
At any time until ten days after the date on which the occurrence of a flip-in event is first publicly announced, we may redeem
the rights in whole, but not in part, at a redemption price of $0.01 per right. The redemption price is subject to adjustment for
any stock split, stock dividend or similar transaction occurring before the date of redemption. At our option, we may pay that
redemption price in cash, shares of common stock or any other consideration our board of directors may select. The rights are not
exercisable after a flip-in event until they are no longer redeemable. If our board of directors timely orders the redemption of the
rights, the rights will terminate on the effectiveness of that action.
Exchange of Rights
We may, at our option, exchange the rights (other than rights owned by an acquiring person or an affiliate or an associate of an
acquiring person, which have become void), in whole or in part. The exchange must be at an exchange ratio of one share of com-
mon stock per right, subject to specified adjustments at any time after the occurrence of a flip-in event and prior to:
~ any person other than our existing shareholder becoming the beneficial owner of common stock with voting power equal
to 50% or more of the total voting power of all shares of common stock entitled to vote in the election of directors; or
~ the occurrence of a flip-over event.
Amendment of Terms of Rights
While the rights are outstanding, we may amend the provisions of the shareholders rights agreement only as follows:
~ to cure any ambiguity, omission, defect or inconsistency;
~ to make changes that do not adversely affect the interests of holders of rights, excluding the interests of any acquiring
person; or
~ to shorten or lengthen any time period under the shareholders rights agreement, except that we cannot change the time
period when rights may be redeemed or lengthen any time period, unless such lengthening protects, enhances or clarifies
the benefits of holders of rights other than an acquiring person.
At any time when no rights are outstanding, we may amend any of the provisions of the shareholders rights agreement, other than
decreasing the redemption price.
Dissenters’ rights of appraisal and payment
Under the BCA, our shareholders have the right to dissent from various corporate actions, including any merger or sale of all, or
substantially all, of our assets not made in the usual course of our business, and receive payment of the fair value of their shares
as designated in the BCA. In the event of any amendment of our articles of incorporation, a stockholder also has the right to dis-
sent and receive payment for his or her shares if the amendment alters certain rights in respect of those shares. The dissenting
stockholder must follow the procedures set forth in the BCA to receive payment. In the event that we and any dissenting stock-
holder fail to agree on a price for the shares, the BCA procedures involve, among other things, the institution of proceedings in the
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high court of the Republic of the Marshall Islands or in any appropriate court in any jurisdiction in which our shares are primarily
traded on a local or national securities exchange. The value of the shares of the dissenting stockholder is fixed by the court after
reference, if the court so elects, to the recommendations of a court-appointed appraiser.
Shareholders’ Derivative Actions
Under the BCA, any of our shareholders may bring an action in our name to procure a judgment in our favor, also known as a
derivative action, provided that the stockholder bringing the action is a holder of common stock of our shares both at the time the
derivative action is commenced and at the time of the transaction to which the action relates. The action must set forth with par-
ticularity the stockholder’s efforts to have the board of directors initiate such action or the reason for not making any such effort.
Limitations on Liability and Indemnification of Officers and Directors
The BCA authorizes corporations to limit or eliminate the personal liability of directors and officers to corporations and their
shareholders for monetary damages for breaches of directors’ fiduciary duties. Our articles of incorporation include a provision
that eliminates the personal liability of directors for monetary damages for actions taken as a director to the fullest extent per-
mitted by law.
Our bylaws provide that we must indemnify our directors and officers to the fullest extent authorized by law. We are also expressly
authorized to advance certain expenses (including attorneys’ fees and disbursements and court costs) to our directors and of-
ficers and carry directors’ and officers’ insurance providing indemnification for our directors, officers and certain employees for
some liabilities. We believe that these indemnification provisions and insurance are useful to attract and retain qualified directors
and executive officers.
The limitation of liability and indemnification provisions in our articles of incorporation and bylaws may discourage shareholders
from bringing a lawsuit against directors for breach of their fiduciary duty. These provisions may also have the effect of reducing
the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise
benefit us and our shareholders. In addition, shareholders’ investments may be adversely affected to the extent we pay the costs
of settlement and damage awards against directors and officers pursuant to these indemnification provisions.
There is currently no pending material litigation or proceeding involving any of our directors, officers or employees for which
indemnification is sought.
Anti-Takeover Effect of Certain Provisions of our Articles of Incorporation and Bylaws
Several provisions of our articles of incorporation and bylaws, which are summarized in the following paragraphs, may have anti-
takeover effects. These provisions are intended to avoid costly takeover battles, lessen our vulnerability to a hostile change of
control and enhance the ability of our board of directors to maximize stockholder value in connection with any unsolicited offer
to acquire us. However, these anti-takeover provisions could also delay, defer or prevent (a) the merger or acquisition of our
company by means of a tender offer, a proxy contest or otherwise that a stockholder might consider in its best interest, includ-
ing attempts that may result in a premium over the market price for the shares held by the shareholders, and (b) the removal of
incumbent officers and directors.
Blank Check Preferred Stock
Under the terms of our articles of incorporation, our board of directors has authority, without any further vote or action by our
shareholders, to issue up to 20,000,000 shares of blank check preferred stock, of which 1,000,000 shares have been designat-
ed Series A Participating Preferred Stock, in connection with our adoption of a shareholder rights plan as described above under
“-Shareholder Rights Plan” and as of December 31, 2023 and February 16, 2024, 804,950 have been designated as Series C
Preferred Shares and 3,195,050 have been designated as Series D Preferred Shares. As of the Redemption Date, no shares of
Series B Preferred Shares remained outstanding. Our board of directors may issue shares of preferred stock on terms calculated
to discourage, delay or prevent a change of control of our company or the removal of our management
Classified Board of Directors
Our articles of incorporation provide for a board of directors serving staggered, three-year terms. Approximately one-third of our
board of directors will be elected each year. This classified board provision could discourage a third party from making a tender
offer for our shares or attempting to obtain control of our company. It could also delay shareholders who do not agree with the
policies of the board of directors from removing a majority of the board of directors for two years.
Election and Removal of Directors
Our articles of incorporation prohibit cumulative voting in the election of directors. Our bylaws require parties other than the
board of directors to give advance written notice of nominations for the election of directors. Our articles of incorporation and
bylaws also provide that our directors may be removed only for cause. These provisions may discourage, delay or prevent the
removal of incumbent officers and directors.
Calling of Special Meeting of Shareholders
Our articles of incorporation and bylaws provide that special meetings of our shareholders may only be called by our Chairman of
the board of directors, chief executive officer or secretary of the Company, at the request of a majority of our board of directors.
Advance Notice Requirements for Stockholder Proposals and Director Nominations
Our bylaws provide that shareholders seeking to nominate candidates for election as directors or to bring business before an
annual meeting of shareholders must provide timely notice of their proposal in writing to the corporate secretary.
Generally, to be timely, a stockholder’s notice must be received at our offices not less than 90 days nor more than 120 days
prior to the first anniversary date of the previous year’s annual meeting. Our bylaws also specify requirements as to the form and
content of a stockholder’s notice. These provisions may impede shareholders’ ability to bring matters before an annual meeting
of shareholders or to make nominations for directors at an annual meeting of shareholders.
C. Material Contracts
Not applicable.
D. Exchange Controls and Other Limitations
Affecting Security Holders
Under Marshall Islands law, there are currently no restrictions on the export or import of capital, including foreign exchange
controls or restrictions that affect the remittance of dividends, interest or other payments to non-resident and non-Marshall
Islands citizen holders of our Common Stock.
E. Tax Considerations
Marshall Islands Tax Considerations
We are a non-resident domestic Marshall Islands corporation. Because we do not, and we do not expect that we will, conduct busi-
ness or operations in the Republic of the Marshall Islands, under current Marshall Islands law we are not subject to tax on income
or capital gains and our shareholders (so long as they are not citizens or residents of the Republic of the Marshall Islands) will not
be subject to Marshall Islands taxation or withholding on dividends and other distributions (including upon a return of capital) we
make to our shareholders. In addition, so long as our shareholders are not citizens or residents of the Republic of the Marshall
Islands, our shareholders will not be subject to Marshall Islands stamp, capital gains or other taxes on the purchase, holding or
disposition of our Common Stock or Preferred Shares, and our shareholders will not be required by the Republic of the Marshall
Islands to file a tax return relating to our Common Stock or Preferred Shares.
Each stockholder is urged to consult its tax counselor or other advisor with regard to the legal and tax consequences, under the
laws of pertinent jurisdictions, including the Republic of the Marshall Islands, of its investment in us.
Further, it is the responsibility of each stockholder to file all state, local and non-U.S., as well as U.S. federal tax returns that may
be required of it.
Liberian Tax Considerations
Some of our vessel-owning subsidiaries are incorporated under the laws of the Republic of Liberia. The Republic of Liberia
enacted a new income tax act effective as of January 1, 2001 (the “New Act”) which did not distinguish between the taxation
of “non-resident” Liberian corporations, such as our subsidiaries, which conduct no business in Liberia and were wholly exempt
from taxation under the income tax law previously in effect since 1977, and “resident” Liberian corporations which conduct
business in Liberia and are, and were under the prior law, subject to taxation. The New Act was amended by the Consolidated
Tax Amendments Act of 2011 which was published and became effective on November 1, 2011 (the “Amended Act”). The
Amended Act specifically exempts from taxation non-resident Liberian corporations such as our Liberian subsidiaries that
engage in international shipping (and not exclusively in Liberia) and that do not engage in other business or activities in Liberia
other than as specifically enumerated in the Amended Act. In addition, the Amended Act made such exemption from taxation
retroactive to the effective date of the New Act.
United States Federal Income Tax Considerations
The following discussion of United States federal income tax matters is based on the Code, judicial decisions, administrative
pronouncements, and existing and proposed regulations issued by the United States Department of the Treasury as of the date
hereof, all of which are subject to change, possibly with retroactive effect. This discussion does not address any United States
state or local taxes, any United States federal tax other than federal income tax or the tax on net investment income imposed by
Section 1411 of the Code. This discussion does not purport to address the tax consequences of owning our stock to all categories
of investors, some of which (such as financial institutions, regulated investment companies, real estate investment trusts, tax-
exempt organizations, insurance companies, United States expatriates, persons holding our stock as part of a hedging, integrated,
conversion or constructive sale transaction or a straddle, persons liable for alternative minimum tax, pass-through entities and
investors therein, persons who own, actually or under applicable constructive ownership rules, 10% or more of the vote or value
of our stock, traders or dealers in securities or currencies and United States holders whose functional currency is not the United
States dollar) may be subject to special rules. This discussion only addresses holders that hold the stock as a capital asset. This
discussion is based upon our beliefs and expectations concerning our past, current and anticipated activities, income and assets
and those of our subsidiaries, the direct, indirect and constructive ownership of our stock and the trading and quotation of our
stock. Should any such beliefs or expectations prove to be incorrect, the conclusions described herein could be adversely affected.
You are encouraged to consult your own tax advisors concerning the overall tax consequences of the ownership of our stock aris-
ing in your own particular situation under United States federal, state, local or foreign law.
If a partnership holds our stock, the tax treatment of a partner will generally depend upon the status of the partner and upon the
activities of the partnership. Partners in a partnership holding our stock are encouraged to consult their tax advisors.
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United States Federal Income Tax Consequences
Taxation of Operating Income in General
General
Unless exempt from United States federal income taxation under the rules discussed below, a foreign corporation is subject
to United States federal income taxation in respect of any income that is derived from the use of vessels, from the hiring or
leasing of vessels for use on a time, voyage or bareboat charter basis, from the participation in a shipping pool, partnership,
strategic alliance, joint operating agreement, code sharing arrangements or other joint venture it directly or indirectly owns or
participates in that generates such income, or from the performance of services directly related to those uses, which we refer
to as “shipping income”, to the extent that the shipping income is derived from sources within the United States. For these
purposes, 50% of the gross shipping income that is attributable to transportation that begins or ends, but that does not both
begin and end, in the United States, exclusive of certain U.S. territories and possessions, constitutes income from sources
within the United States, which we refer to as “U.S. source gross shipping income”.
Shipping income attributable to transportation that both begins and ends in the United States is considered to be 100% from
sources within the United States. We are prohibited by law from engaging in transportation that produces income considered
to be 100% from sources within the United States.
Shipping income attributable to transportation exclusively between non-U.S. ports will be considered to be 100% derived from
sources outside the United States. Shipping income derived from sources outside the United States will not be subject to any
United States federal income tax.
We are subject to a 4% tax imposed without allowance for deductions for such taxable year, as described in “Taxation in the
Absence of Exemption”, unless we qualify for exemption from tax under Section 883 of the Code, the requirements of which
are described in detail below. For our 2022 taxable year, we were exempt from U.S federal tax on our U.S. source gross ship-
ping income.
Exemption of Operating Income from United States Federal Income Taxation
Under Section 883 of the Code and the regulations thereunder, we will be exempt from United States federal income taxation on
our U.S.-source shipping income if:
a) we are organized in a foreign country (our “country of organization”) that grants an “equivalent exemption” to corpora-
tions organized in the United States one of the following is true; and
b) either:
i) more than 50% of the value of our stock is owned, directly or indirectly, by “qualified shareholders”, that are persons
(i) who are “residents” of our country of organization or of another foreign country that grants an “equivalent exemp-
tion” to corporations organized in the United States, and (ii) we satisfy certain substantiation requirements, which we
refer to as the “50% Ownership Test”; or
ii) our stock is “primarily” and “regularly” traded on one or more established securities markets in our country of organi-
zation, in another country that grants an “equivalent exemption” to United States corporations, or in the United States,
which we refer to as the “Publicly-Traded Test”.
The jurisdictions where we and our shipowning subsidiaries are incorporated grant “equivalent exemptions” to United States
corporations. Therefore, we will be exempt from United States federal income taxation with respect to our U.S. source shipping
income if we satisfy either the 50% Ownership Test or the Publicly-Traded Test.
50% Ownership Test
Under the regulations, a foreign corporation will satisfy the 50% Ownership Test for a taxable year if (i) for at least half of the
number of days in the taxable year, more than 50% of the value of its stock is owned, directly or constructively through the
application of certain attribution rules prescribed by the regulations, by one or more shareholders who are residents of foreign
countries that grant “equivalent exemption” to corporations organized in the United States and (ii) the foreign corporation satis-
fies certain substantiation and reporting requirements with respect to such shareholders. Holders of warrants will not be treated
as constructive owners of shares for purposes of the 50% Ownership Test.
We satisfied the 50% Ownership Test for our 2022 taxable year, and expect that we will be able to satisfy that test going forward.
Publicly-Traded Test
The regulations provide that the stock of a foreign corporation will be considered to be “primarily traded” on an established se-
curities market in a country if the number of shares of each class of stock used to satisfy the Publicly Traded Test that is traded
during the taxable year on all established securities markets in that country exceeds the number of shares in each such class that
is traded during that year on established securities markets in any other single country.
Under the regulations, the stock of a foreign corporation will be considered “regularly traded” if one or more classes of its stock
representing 50% or more of its outstanding shares, by total combined voting power of all classes of stock entitled to vote and
by total combined value of all classes of stock, are listed on one or more established securities markets (such as the NYSE), which
we refer to as the “listing threshold”.
The regulations further require that with respect to each class of stock relied upon to meet the listing threshold: (i) such class of
the stock is traded on the market, other than in minimal quantities, on at least sixty (60) days during the taxable year or one-sixth
(1/6) of the days in a short taxable year; and (ii) the aggregate number of shares of such class of stock traded on such market is
at least 10% of the average number of shares of such class of stock outstanding during such year or as appropriately adjusted in
the case of a short taxable year. Even if a foreign corporation does not satisfy both tests, the regulations provide that the trading
frequency and trading volume tests will be deemed satisfied by a class of stock if such class of stock is traded on an established
market in the United States and such class of stock is regularly quoted by dealers making a market in such stock.
Notwithstanding the foregoing, the regulations provide, in pertinent part, that a class of stock will not be considered to be “regu-
larly traded” on an established securities market for any taxable year in which 50% or more of the vote and value of the outstand-
ing shares of such class of stock are owned, actually or constructively under specified attribution rules, on more than half the days
during the taxable year by persons who each own directly or indirectly 5% or more of the vote and value of such class of stock,
whom we refer to as “5% Shareholders”. We refer to this restriction in the regulations as the “Closely-Held Rule”.
For purposes of being able to determine our 5% Shareholders, the regulations permit a foreign corporation to rely on Schedule
13G and Schedule 13D filings with the Commission. The regulations further provide that an investment company that is regis-
tered under the Investment Company Act of 1940, as amended, will not be treated as a 5% Shareholder for such purposes.
Additionally, holders of warrants will not be treated as constructive owners of shares for purposes of the Closely Held Rule.
The Closely-Held Rule will not disqualify a foreign corporation, however, if it can establish and substantiate that qualified share-
holders own, actually or constructively under specified attribution rules, sufficient shares in the closely-held block of stock to
preclude the shares in the closely-held block that are owned by non-qualified 5% Shareholders from representing 50% or more
of the value of such class of stock for more than half of the days during the tax year. An analysis of our shareholding in 2022
confirmed that we can satisfy that more than 50% of our shares were held for more than half of the days in the 2022 taxable year
by qualified 5% Shareholders in combination with the shares held by less than 5% shareholders.
Due to the factual nature of the issues involved, there can be no assurance that we or any of our subsidiaries will qualify for the
benefits of Section 883 of the Code for our subsequent taxable years.
Taxation in Absence of Exemption
To the extent the benefits of Section 883 are unavailable, our U.S. source gross shipping income, to the extent not considered to
be “effectively connected” with the conduct of a U.S. trade or business, as described below, would be subject to a 4% tax imposed
by Section 887 of the Code on a gross basis, without the benefit of deductions, otherwise referred to as the “4% Tax”. Since
under the sourcing rules described above, no more than 50% of our shipping income would be treated as being derived from U.S.
sources, the maximum effective rate of U.S. federal income tax on our shipping income would never exceed 2% under the 4% Tax.
To the extent the benefits of the Section 883 exemption are unavailable and our U.S. source gross shipping income is considered
to be “effectively connected” with the conduct of a U.S. trade or business, as described below, any such “effectively connected”
U.S. source gross shipping income, net of applicable deductions, would be subject to the U.S. federal corporate income tax cur-
rently imposed at a rate of 21%. In addition, we may be subject to the 30% “branch profits” tax on earnings effectively connected
with the conduct of such trade or business, as determined after allowance for certain adjustments, and on certain interest paid or
deemed paid attributable to the conduct of our U.S. trade or business.
Our U.S. source gross shipping income would be considered “effectively connected” with the conduct of a U.S. trade or business
only if:
~ we have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income;
and
~ substantially all of our U.S. source gross shipping income is attributable to regularly scheduled transportation, such as the
operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points
for voyages that begin or end in the United States, or, in the case of income from the leasing of a vessel, is attributable to
a fixed place of business in the United States.
We do not intend to have, or permit circumstances that would result in having, any vessel operating to the United States on a regu-
larly scheduled basis, or earning income from the leasing of a vessel attributable to a fixed place of business in the United States.
Based on the foregoing and on the expected mode of our shipping operations and other activities, we believe that none of our U.S.
source gross shipping income will be “effectively connected” with the conduct of a U.S. trade or business.
Taxation of Gain on Sale of Assets
Regardless of whether we qualify for the exemption under Section 883 of the Code, we will not be subject to United States income
taxation with respect to gain realized on a sale of a vessel, provided the sale is considered to occur outside of the United States
(as determined under United States tax principles). In general, a sale of a vessel will be considered to occur outside of the United
States for this purpose if title to the vessel (and risk of loss with respect to the vessel) passes to the buyer outside of the United
States. We expect that any sale of a vessel will be so structured that it will be considered to occur outside of the United States.
United States Federal Income Taxation of United States Holders
You are a “United States holder” if you are a beneficial owner of our stock and you are a United States citizen or resident, a United
States corporation (or other United States entity taxable as a corporation), an estate the income of which is subject to United
States federal income taxation regardless of its source, or a trust if a court within the United States is able to exercise primary
jurisdiction over the administration of the trust and one or more United States persons have the authority to control all substantial
decisions of that trust.
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Distributions on Our Stock
Subject to the discussion of PFICs (as defined below), any distributions with respect to our stock that you receive from us, other
than distributions in liquidation and distributions in redemption of our stock that are treated as exchanges, will generally constitute
dividends, which may be taxable as ordinary income or “qualified dividend income” as described below, to the extent of our current
or accumulated earnings and profits (as determined under United States tax principles). Distributions in excess of our earnings and
profits will be treated first as a nontaxable return of capital to the extent of your tax basis in our stock (on a dollar-for-dollar basis)
and thereafter as capital gain. Because we do not intend to determine our earnings and profits on the basis of United States federal
income tax principles, any distribution paid will generally be reported as a “dividend” for United States federal income tax purposes.
Because we are not a United States corporation, if you are a United States corporation (or a United States entity taxable as a
corporation), you will not be entitled to claim a dividends-received deduction with respect to any distributions you receive from us.
Dividends paid with respect to our stock will generally be treated as “passive category income” for purposes of computing allow-
able foreign tax credits for United States foreign tax credit purposes.
If you are an individual, trust or estate, dividends you receive from us should be treated as “qualified dividend income” taxed at
preferential rates, provided that:
(a) the Common Stock or Preferred Shares on which the dividends are paid are readily tradable on an established securities
market in the United States (such as the NYSE);
(b) we are not a PFIC for the taxable year during which the dividend is paid or the immediately preceding taxable year (see the
discussion below under “—PFIC Status”);
(c) you own our stock for more than (x) in the cases where the dividends on the Preferred Shares are attributable to a period or
periods aggregating in excess of 366 days, 90 days in the 181-day period beginning 90 days before the date on which the
Preferred Shares become ex-dividend or (y) in all other cases, 60 days in the 121-day period beginning 60 days before
the date on which the stock becomes ex-dividend;
(d) you are not under an obligation to make related payments with respect to positions in substantially similar or related
property; and
(e) certain other conditions are met.
Special rules may apply to any “extraordinary dividend.” Generally, an extraordinary dividend is: (i) a dividend in an amount that is
equal to (or in excess of) (x) 10%, in the case of Common Stock, or (y) 5%, in the case of the Preferred Shares, of your adjusted
tax basis in (or the fair market value of, in certain circumstances) a share of our stock or (ii) dividends received within a one-year
period that, in the aggregate, equal or exceed 20% of your adjusted tax basis in (or fair market value of in certain circumstances)
a share of our stock. If we pay an “extraordinary dividend” on our stock that is treated as “qualified dividend income” and if you
are an individual, estate or trust, then any loss you derive from a subsequent sale or exchange of such stock will be treated as
long-term capital loss to the extent of such dividend.
There is no assurance that dividends you receive from us will be eligible for preferential rates. Dividends you receive from us that
are not eligible for any preferential rate will be taxed at the ordinary income rates.
Sale, Exchange or Other Disposition of Stock
Provided that we are not a PFIC for any taxable year and except as provided in the discussion under “Redemption of Stock,” you gen-
erally will recognize taxable gain or loss upon a sale, exchange or other disposition of our stock, in an amount equal to the difference
between the amount realized by you from such sale, exchange or other disposition and your tax basis in such stock. Such gain or
loss will be treated as long-term capital gain or loss if your holding period is greater than one year at the time of the sale, exchange
or other disposition. Such capital gain or loss will generally be treated as United States source income or loss, as applicable, for
United States foreign tax credit purposes. Your ability to deduct capital losses against ordinary income is subject to limitations.
Redemption of Stock
In the case of a redemption of stock (including a disposition of stock to us or persons related to us), unless the redemption satis-
fies one of the tests set forth in Section 302(b) of the Code for treating the redemption as a sale or exchange, the redemption
will be treated under Section 302 of the Code as a distribution. If the redemption is treated as a sale or exchange of the United
States holder’s stock, the United States holder’s treatment will be as discussed above in “—Sale, Exchange or Other Disposition
of Stock.” The redemption will be treated as a sale or exchange only if it (i) is “substantially disproportionate,” (ii) constitutes
a “complete termination of the holder’s stock interest” in us or (iii) is not “essentially equivalent to a dividend,” each within the
meaning of Section 302(b) of the Code. In determining whether any of the alternative tests of Section 302(b) of the Code is met,
shares of our capital stock actually owned, as well as shares considered to be owned by the United States holder by reason of
certain constructive ownership rules, must be taken into account. Because the determination as to whether any of the alternative
tests of Section 302(b) of the Code is satisfied with respect to a particular holder of the stock will depend on that holder’s particu-
lar facts and circumstances as of the time the determination is made, United States holders should consult their own tax advisors
to determine their tax treatment of a redemption of stock in light of their own particular investment circumstances.
PFIC Status
Special United States income tax rules apply to you if you hold stock in a non-United States corporation that is classified as
a“passive foreign investment company” (or “PFIC”) for United States income tax purposes. In general, we will be treated as a PFIC
in any taxable year in which, after applying certain look-through rules, either:
(a) at least 75% of our gross income for such taxable year consists of “passive income” (e.g., dividends, interest, capital gains
and rents derived other than in the active conduct of a rental business); or
(b) at least 50% of the average value of our assets during such taxable year consists of “passive assets” (i.e., assets that
produce, or are held for the production of, passive income).
For purposes of determining whether we are a PFIC, we will be treated as earning and owning our proportionate share of the in-
come and assets, respectively, of any of our subsidiary corporations in which we own at least 25% of the value of the subsidiary’s
stock. Income we earn, or are deemed to earn, in connection with the performance of services will not constitute passive income.
By contrast, rental income will generally constitute passive income (unless we are treated under certain special rules as deriving
our rental income in the active conduct of a trade or business).
Because we have chartered all of our vessels to unrelated charterers on the basis of period time and spot time charter contracts (and
not on the basis of bareboat charters) and because we expect to continue to do so, we believe that currently we should not be treated
as being and should not become a PFIC. We believe it is more likely than not that our gross income derived from our time charter ac-
tivities constitutes active service income (as opposed to passive rental income) and, as a result, our vessels constitute active assets
(as opposed to passive assets) for purposes of determining whether we are a PFIC. We believe there is legal authority supporting this
position, consisting of case law and United States Internal Revenue Service (“IRS”) pronouncements concerning the characterization
of income derived from time charters as service income for other tax purposes. However, there is no legal authority specifically re-
lating to the statutory provisions governing PFICs or relating to circumstances substantially similar to ours. Moreover, in Tidewater
Inc. v. United States, 565 F.3d 299 (5th Cir. 2009), the United States Court of Appeals for the Fifth Circuit held that, contrary to
the position of the IRS in that case, and for purposes of a different set of rules under the Code, income received under a time charter
of vessels should be treated as rental income rather than services income. If the reasoning of the Fifth Circuit case were extended to
the PFIC context, the gross income we derive or are deemed to derive from our time chartering activities would be treated as rental
income, and we would probably be a PFIC. The IRS has stated that it disagrees with the holding in Tidewater and has specified that
income from period time charters should be treated as services income. However, the IRS’ statement with respect to the Tidewater
decision was an administrative action that cannot be relied upon or otherwise cited as precedent by taxpayers.
We have not sought, and we do not expect to seek, an IRS ruling on this matter. As a result, the IRS or a court could disagree with
our position that we are not currently a PFIC. No assurance can be given that this result will not occur. In addition, although we in-
tend to conduct our affairs in a manner to avoid, to the extent possible, being classified as a PFIC with respect to any taxable year,
we cannot assure you that the nature of our operations will not change in the future, or that we can avoid PFIC status in the future.
As discussed below, if we were to be treated as a PFIC for any taxable year, you generally would be subject to one of three different
United States income tax regimes, depending on whether or not you make certain elections. Additionally, you would be required
to file annual information returns with the IRS.
Taxation of United States Holders That Make a Timely QEF Election
If we were treated as a PFIC, and if you make a timely election to treat us as a “Qualified Electing Fund” for United States tax
purposes (a “QEF Election”), you would be required to report each year your allocable share of our ordinary earnings and
our net capital gain for our taxable year that ends with or within your taxable year, regardless of whether we make any dis-
tributions to you. Such income inclusions would not be eligible for the preferential tax rates applicable to “qualified dividend
income.” Your adjusted tax basis in our stock would be increased to reflect such taxed but undistributed earnings and profits.
Distributions of earnings and profits that had previously been taxed would result in a corresponding reduction in your adjusted
tax basis in our stock and would not be taxed again once distributed. You would generally recognize capital gain or loss on
the sale, exchange or other disposition of our stock. Even if you make a QEF Election for one of our taxable years, if we were a
PFIC for a prior taxable year during which you held our stock and for which you did not make a timely QEF Election, you would
also be subject to the more adverse rules described below under “—Taxation of United States Holders That Make No Election.”
You would make a QEF Election with respect to any year that our company is treated as a PFIC by completing and filing IRS Form
8621 with your United States income tax return in accordance with the relevant instructions. If we were to become aware that we
were to be treated as a PFIC for any taxable year, we would notify all United States holders of such treatment and would provide all
necessary information to any United States holder who requests such information in order to make the QEF election described above.
Taxation of United States Holders That Make a Timely “Mark-to-Market” Election
Alternatively, if we were to be treated as a PFIC for any taxable year and, as we expect, our stock is treated as “marketable stock,”
you would be allowed to make a “mark-to-market” election with respect to our stock, provided that you complete and file IRS Form
8621 in accordance with the relevant instructions. If that election is made, you generally would include as ordinary income in each
taxable year the excess, if any, of the fair market value of our stock at the end of the taxable year over your adjusted tax basis
in our stock. You also would be permitted an ordinary loss in respect of the excess, if any, of your adjusted tax basis in our stock
over its fair market value at the end of the taxable year (but only to the extent of the net amount previously included in income as
a result of the mark-to-market election). Your tax basis in our stock would be adjusted to reflect any such income or loss amount.
Gain realized on the sale, exchange or other disposition of our stock would be treated as ordinary income, and any loss realized on
the sale, exchange or other disposition of the stock would be treated as ordinary loss to the extent that such loss does not exceed
the net mark-to-market gains previously included by you.
Taxation of United States Holders That Make No Election
Finally, if we were treated as a PFIC for any taxable year and if you did not make either a QEF Election or a “mark-to-market”
election for that year, you would be subject to special rules with respect to (a) any excess distribution (that is, the portion of any
distributions received by you on our stock in a taxable year in excess of 125% of the average annual distributions received by
you in the three preceding taxable years, or, if shorter, your holding period for our stock) and (b) any gain realized on the sale,
exchange or other disposition of our stock. Under these special rules:
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(1) the excess distribution or gain would be allocated ratably over your aggregate holding period for our Common Stock;
(2) the amount allocated to the current taxable year would be taxed as ordinary income; and
(3) the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the
applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with
respect to the resulting tax attributable to each such other taxable year.
If an individual dies while owning our stock, the individual’s successor generally would not receive a step-up in tax basis with re-
spect to such stock for United States tax purposes.
United States Federal Income Taxation of Non-United States Holders
You are a “non-United States holder” if you are a beneficial owner of our stock (other than a partnership for United States tax
purposes) and you are not a United States holder.
Distributions on Our Stock
You generally will not be subject to United States income or withholding taxes on dividends you receive from us with respect to our
stock, unless that income is effectively connected with your conduct of a trade or business in the United States. If you are entitled
to the benefits of an applicable income tax treaty with respect to those dividends, that income generally is taxable in the United
States only if it is attributable to a permanent establishment maintained by you in the United States.
Sale, Exchange or Other Disposition of Our Stock
You generally will not be subject to United States income tax or withholding tax on any gain realized upon the sale, exchange or
other disposition of our stock, unless:
(a) the gain is effectively connected with your conduct of a trade or business in the United States. If you are entitled to the
benefits of an applicable income tax treaty with respect to that gain, that gain generally is taxable in the United States only
if it is attributable to a permanent establishment maintained by you in the United States; or
(b) you are an individual who is present in the United States for 183 days or more during the taxable year of disposition and
certain other conditions are met.
If you are engaged in a United States trade or business for United States tax purposes, you will be subject to United States tax with
respect to your income from our stock (including dividends and the gain from the sale, exchange or other disposition of the stock)
that is effectively connected with the conduct of that trade or business in the same manner as if you were a United States holder.
In addition, if you are a corporate non-United States holder, your earnings and profits that are attributable to the effectively con-
nected income (subject to certain adjustments) may be subject to an additional United States branch profits tax at a rate of 30%,
or at a lower rate as may be specified by an applicable income tax treaty.
United States Backup Withholding and Information Reporting
In general, if you are a non-corporate United States holder, dividend payments (or other taxable distributions) made within the
United States will be subject to information reporting requirements and backup withholding tax if you:
(1) fail to provide an accurate taxpayer identification number;
(2) are notified by the IRS that you are subject to backup withholding; or
(3) in certain circumstances, fail to comply with applicable certification requirements.
United States holders who are individuals generally will be required to report certain information with respect to an interest in our
stock by attaching a completed IRS Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each
year in which they hold an interest in our stock. These requirements are subject to exceptions, including an exception for shares
held in accounts maintained by certain financial institutions and an exception applicable if the aggregate value of all “specified
foreign financial assets” (as defined in the Code) held by the United States holder (and, as applicable, by his or her spouse) does
not exceed a specified minimum amount.
If you are a non-United States holder, you may be required to establish your exemption from information reporting and backup
withholding by certifying your status on IRS Form W-8BEN, W-8BEN-E, W-8ECI or W-8IMY, as applicable. If you sell our stock to
or through a United States office or broker, the payment of the sales proceeds is subject to both United States backup withholding
and information reporting unless you certify that you are a non-United States person, under penalties of perjury, or you other-
wise establish an exemption. If you sell our stock through a non-United States office of a non-United States broker and the sales
proceeds are paid to you outside the United States, then information reporting and backup withholding generally will not apply to
that payment. However, United States information reporting requirements (but not backup withholding) will apply to a payment of
sales proceeds, even if that payment is made outside the United States, if you sell our stock through a non-United States office of
a broker that is a United States person or has certain other connections with the United States.
Backup withholding tax is not an additional tax. Rather, you generally may obtain a refund of any amounts withheld under backup
withholding rules that exceed your income tax liability by accurately completing and timely filing a refund claim with the IRS. You
should consult your own tax advisor regarding the application of the backup withholding and information reporting rules.
G. Statement by Experts
Not applicable.
H. Documents on Display
We are subject to the informational requirements of the Exchange Act. In accordance with these requirements, we file reports and
other information as a foreign private issuer with the SEC. You may inspect reports and other information regarding registrants,
such as us, that file electronically with the SEC without charge at a web site maintained by the SEC at http://www.sec.gov.
I. Subsidiary Information
Not applicable.
PART II
ITEM 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
A. Quantitative Information About Market Risk
Interest Rate Risk
We are subject to market risks relating to changes in interest rates because we have floating rate debt outstanding, which is based
on U.S. dollar SOFR plus, in the case of each credit facility, a specified margin and, for facilities previously based on LIBOR, a credit
adjustment spread. Our objective is to manage the impact of interest rate changes on our earnings and cash flow in relation to our
borrowings and to this effect, when we deem appropriate, we use derivative financial instruments.
The total notional principal amount of outstanding interest rate derivative contracts as of December 31, 2021 was $300.0
million. The swaps had specified rates and durations. In January 2022 we terminated certain of these interest rate derivative
contracts for which we received an aggregate payment of $8.34 million and entered into new contracts with shorter maturities. In
February 2022, we terminated all outstanding interest rate derivative contracts transactions and received an aggregate payment
of $2.78 million. We did not have any interest rate derivative contracts outstanding as of December 31, 2022.
During the year ended December 31, 2023 we entered into certain interest rate derivative contracts which were all terminated
during the same year for which we received an aggregate payment of $0.33 million. We did not have any interest rate derivative
contracts outstanding as of December 31, 2023.
From time to time we may enter into interest rate swap agreements in order to manage future interest costs and the risk associ-
ated with changing interest rates. Refer to the table in Note 14 of the consolidated financial statements included elsewhere in this
annual report which summarizes the interest rate swaps in place as of December 31, 2023 and December 31, 2022.
The following table sets forth the sensitivity of our existing loans as of December 31, 2023, as to a 100 basis point increase in
SOFR, and reflects the additional interest expense.
Year
2024
2025
2026
2027
2028
$
Amount
million
million
million
million
million
3.4
3.1
2.7
2.0
1.7
F. Dividends and Paying Agents
Not applicable.
Freight Derivatives and Bunker Swaps
We are subject to markets risks relating to changes in charter rates because we have entered into a certain number of FFA’s on
the Panamax index maturing in 2024. Generally freight derivatives may be used to hedge a vessel owner’s exposure to the charter
market for a specified vessel size and period of time. Upon settlement, if the contracted charter rate is less than the average of the
SAFEBULKERS
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ANNUAL REPORT 2023
95
rates reported on an identified index for the specified vessel size and time period, the seller of the FFA is required to pay the buyer
the settlement sum, being an amount equal to the difference between the contracted rate and the settlement rate, multiplied by
the number of days of the specified period. Conversely, if the contracted rate is greater than the settlement rate, the buyer is
required to pay the seller the settlement sum. If we take positions in FFAs or other derivative instruments we could suffer losses
in the settling or termination of these agreements. This could adversely affect our results of operations and cash flow.
Our FFA derivatives do not qualify as cash flow hedges for accounting purposes and therefore gains or losses are recognized
in earnings. For the year ended December 31, 2022, we incurred net gain on FFAs of $7.1 million whereas for the year ended
December 31, 2023, we incurred net loss of $1.7 million. As of December 31, 2022 and 2023 the fair value of our outstanding
FFA derivatives was a net asset of $0.8 million and a net liability of $0.2, respectively.
A hypothetical 10.0% immediate and uniform increase in all charter rates from the rates in effect as of December 31, 2023,
would have increased our loss and the fair value of our outstanding FFA derivatives by approximately $0.1 million, resulting to
FFA derivatives liability of $0.3 million.
We are also subject to markets risks relating to changes in the prices of bunkers prices because we have entered into a certain
number of bunker swap contracts to manage our exposure to fluctuations of bunker price differentials associated with the con-
sumption of bunkers by our vessels. Bunker swaps are agreements between two parties to exchange cash flows at a fixed price
on bunkers, where volume, time period and price are agreed in advance. If we take positions in bunker swaps or other derivative
instruments we could suffer losses in the settling or termination of these agreements. This could adversely affect our results of
operations and cash flow.
We used these bunker swaps as an economic hedge to reduce the risk on bunker price differentials. Our bunker swaps do not
qualify as cash flow hedges for accounting purposes and therefore gains or losses are recognized in earnings. Bunker swaps are
treated as assets/liabilities until they are settled. During the years ended December 31, 2022 and 2023, we entered into a num-
ber of bunker swaps. For the years ended December 31, 2022 we incurred net losses of $4.5 million whereas for the year ended
December 31, 2023, we incurred net gain of $0.1 million. As of December 31, 2022 and 2023, the fair value of our outstanding
bunker swaps was a net asset of $0.3 million and a liability of $0.3 million, respectively.
A hypothetical 10.0% immediate and uniform increase in all bunker prices from the prices in effect as of December 31, 2023,
would have increased our loss and the fair value of our outstanding bunker swaps by approximately $0.3 million, resulting to
bunker swaps derivatives liability of $0.6 million.
Foreign Currency Exchange Risk
We generate all of our revenues in U.S. dollars, but for the year ended December 31, 2023 we incurred approximately 22.0% of
our vessel operating expenses in currencies other than the U.S. dollar and the vast majority of our management fees to our Man-
agers in currencies other than the U.S. dollar. The interest on our €100.00 million bond is also payable in EUR. As of December
31, 2023, approximately 32.3% of our outstanding accounts payable were denominated in currencies other than the U.S. dollar
and were subject to exchange rate risk, as their value fluctuates with changes in exchange rates.
A hypothetical 10.0% immediate and uniform adverse move in all currency exchange rates from the rates in effect as of Decem-
ber 31, 2023, would have increased our vessel operating expenses by approximately $2.0 million, our management fees to our
Managers by approximately $1.9 million, our bond interest by approximately $0.3 million and the fair value of our outstanding
accounts payable by approximately $0.3 million.
As of December 31, 2023, the majority of our outstanding contractual obligations to our Managers were denominated in Euros,
equivalent to $72.9 million. The USD equivalent of the €100.0 million bond as of December 31, 2023 was $110.4 million. In
order to mitigate the risk from exchange rate fluctuations, we have entered into several currency forward agreements in the rela-
tion to the redemption of the bond principal for a total of €45.0 million at an average rate of 1.0871 EUR/USD. A hypothetical
10% immediate adverse move in the Euro exchange rate from the rate in effect as of December 31, 2023, would have increased
our outstanding contractual obligations to our Managers by approximately $7.3 million and to the bond holders by approximately
$7.1 million, taking into account the outstanding forward currency agreements. We may not enter into additional foreign ex-
change forward agreements in the future in relation to the expenditures denominated in Euros.
ITEM 12.
DESCRIPTION OF SECURITIES OTHER
THAN EQUITY SECURITIES
Not applicable.
ITEM 13.
DEFAULTS, DIVIDEND ARREARAGES
AND DELINQUENCIES
None.
ITEM 14.
MATERIAL MODIFICATIONS TO THE RIGHTS
OF SECURITY HOLDERS AND USE OF PROCEEDS
A. Material Modifications to the Rights of Security Holders
We adopted a shareholder rights plan on August 6, 2020, that authorizes the issuance to our existing shareholders of preferred
share rights and additional shares of Common Stock if any third party seeks to acquire control of a substantial block of our Com-
mon Stock. See “Item 10. Additional Information—B. Articles of Incorporation and Bylaws—Shareholder Rights Plan” included in
this annual report for a description of the shareholders rights plan.
ITEM 15.
CONTROLS AND PROCEDURES
A. Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness
of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act as of December 31, 2023. Disclosure controls and procedures are defined under SEC rules as controls and other
procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or sub-
mits under the Exchange Act is recorded, processed, summarized and reported within required time periods. Disclosure controls
and procedures include without limitation controls and procedures designed to ensure that information required to be disclosed
by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s man-
agement, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate,
to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of dis-
closure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and
procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving
their control objectives. Based on our evaluation, the chief executive officer and the chief financial officer have concluded that our
disclosure controls and procedures were effective as of December 31, 2023.
B. Management’s Annual Report on Internal Control
Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act and for the assessment of the effectiveness of internal control over finan-
cial reporting. Our internal control over financial reporting is a process designed by, or under the supervision of, the Company’s
principal executive and principal financial officers, or persons performing similar functions, and effected by the Company’s board
of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with U.S. GAAP.
A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements
in accordance with U.S. GAAP, and that receipts and expenditures of the company are being made only in accordance with au-
thorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In making its assessment of our internal control over financial reporting as of December 31, 2023, management, including the
chief executive officer and chief financial officer, used the criteria set forth in Internal Control—Integrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway Commission of 2013 (“COSO”).
Management concluded that, as of December 31, 2023, our internal control over financial reporting was effective. Deloitte Certi-
fied Public Accountants S.A. (“Deloitte”), our independent registered public accounting firm, has audited the financial statements
included herein and our internal control over financial reporting and has issued an attestation report on the effectiveness of our
internal control over financial reporting as of December 31, 2023 which is reproduced in its entirety in Item 15(c) below.
C. Attestation Report of the Registered Public Accounting Firm
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2023 has been audited by
Deloitte Certified Public Accountants S.A., an independent registered public accounting firm, as stated in their report which
appears below.
96
ANNUAL REPORT 2023
97
SAFEBULKERS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of
Safe Bulkers, Inc.
Majuro, Republic of the Marshall Islands
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Safe Bulkers, Inc. and subsidiaries (the “Company”) as of Decem-
ber 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control —
Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated financial statements as of and for the year ended December 31, 2023, of the Company and our report
dated February 29, 2024, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assess-
ment of the effectiveness of internal control over financial reporting, included in the accompanying “Management’s Annual Report
on Internal Control Over Financial Reporting.” Our responsibility is to express an opinion on the Company’s internal control over
financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be indepen-
dent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all mate-
rial respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed
risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides
a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reli-
ability of financial reporting and the preparation of financial statements for external purposes in accordance with generally ac-
cepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1)
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of
the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, pro-
jections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Deloitte Certified Public Accountants S.A.
Athens, Greece
February 29, 2024
D. Changes in Internal Control over Financial Reporting
During the period covered by this annual report, we have made no changes to our internal control over financial reporting that
have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
ITEM 16.
[RESERVED]
ITEM 16A.
AUDIT COMMITTEE FINANCIAL EXPERT
Our Audit Committee consists of four independent directors, Ole Wikborg, Christos Megalou, Kristin H. Holth and Frank Sica, who
is the chairman of the committee. Our board of directors has determined that Frank Sica, whose biographical details are included
in “Item 6. Directors, Senior Management and Employees—A. Directors and Senior Management,” qualifies as an audit committee
“financial expert,” as such term is defined in Regulation S-K promulgated by the SEC.
ITEM 16B.
CODE OF ETHICS
We have adopted a Code of Business Conduct and Ethics for all officers and employees of our company, which incorporates a Code
of Ethics for directors and a Code of Conduct for corporate officers, a copy of which is posted on our website, and may be viewed
at http://www.safebulkers.com/corp_ethics.htm. We will also provide a paper copy of this document free of charge upon written
request by our shareholders. shareholders may direct their requests to the attention of Dr. Loukas Barmparis, Secretary, Safe
Bulkers, Inc., e-mail: directors@safebulkers.com, telephone: +30 2111 888 400, +357 25 887 200. No waivers of the Code of
Business Conduct and Ethics have been granted to any person during the fiscal year ended December 31, 2023.
ITEM 16C.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Aggregate fees billed to the Company for the fiscal years ended December 31, 2023 and 2022 by the Company’s principal ac-
counting firm, Deloitte Certified Public Accountants S.A., (PCAOB number 1163), an independent registered public accounting
firm and member of Deloitte Touche Tohmatsu, Limited, by the category of service, were as follows:
Audit fees
Audit related fees
Tax fees
All other fees
Total fees
2022
2023
(in thousands)
370
47
$
$
— $
— $
420
59
—
—
417
$
479
$
$
$
$
$
Audit fees represent compensation for professional services rendered for the integrated audit of the consolidated financial state-
ments of the Company and for the review of the quarterly financial information as well as in connection with the review of the Annual
Report, review of registration statements and related consents and comfort letters and any other audit services required for SEC or
other regulatory fillings. Audit related fees represent compensation for professional services rendered relating to the review of the
prospectus and related services for the public offering and listing on the Athens Stock Exchange of unsecured bond by a subsidiary
of Safe Bulkers, and subscription services. There were no fees relating to Tax fees. Other fees represent fee for professional services
rendered in connection with assistance provided with the Company’s cyber security assessment, including cyber awareness training.
Pre-approval Policies and Procedures
The audit committee charter sets forth our policy regarding retention of the independent auditors, giving the audit committee
responsibility for the appointment, compensation, retention and oversight of the work of the independent auditors. The audit com-
mittee charter provides that the committee is responsible for reviewing and approving in advance the retention of the independent
auditors for the performance of all audit and lawfully permitted non-audit services. The chairman of the audit committee or in the
absence of the chairman, any member of the audit committee designated by the chairman, has authority to approve in advance
any lawfully permitted non-audit services and fees. The audit committee is authorized to establish other policies and procedures
for the pre-approval of such services and fees. Where non-audit services and fees are approved under delegated authority, the
action must be reported to the full audit committee at its next regularly scheduled meeting.
ITEM 16D.
EXEMPTIONS FROM THE LISTING STANDARDS
FOR AUDIT COMMITTEES
Not Applicable.
ITEM 16E.
PURCHASES OF EQUITY SECURITIES BY THE ISSUER
AND AFFILIATED PURCHASERS
SAFEBULKERS
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ANNUAL REPORT 2023
99
Preferred Stock
In March 2022, the Company issued a notice of redemption of 1,492,554 of the outstanding Series C Preferred Shares. The
redemption was completed on April 29, 2022, at a redemption price of $25.00 per Series C Preferred Share plus all accumulated
and unpaid dividends to, but excluding, the redemption date. Following the redemption, there were 804,950 Series C Preferred
Shares outstanding, as of December 31, 2022 and as of December 31, 2023.
Common Stock
In June 2022, the Company implemented a new program for the repurchase of an amount up to 5,000,000 shares of its
Common Stock. In March 2023, the Company announced an increase of the June 2022 share repurchase program, authoriz-
ing the Company to purchase up to a total of 10,000,000 shares of the Company’s Common Stock. All shares of Common
Stock repurchased under the June 2022 and March 2023 share repurchase programs have been canceled. In May 2023, the
Company announced a new program for the repurchase of up to 5,000,000 shares of its Common Stock. In July 2023, the
Company terminated the program, having repurchased and canceled an amount of 139,891 shares of Common Stock. In No-
vember 2023, the Company announced an additional program for the repurchase of up to 5,000,000 shares of its Common
Stock. As of February 16, 2024, the Company had not purchased any shares of Common Stock under the aforementioned
program.
Purchases under the previously announced repurchase programs were made in the open market and in compliance with applicable
laws and regulations.
Details on the shares purchased under such program as of February 16, 2024, are set forth in the table below:
Total Number of Shares
of Common Stock
Purchased (a)
Average Price Paid
per Share
of Common Stock
Total Number of Common Shares
Purchased as Part of Publicly
Announced Plan or Programs
Period
January 2023
February 2023
March 2023
April 2023
May 2023
June 2023
July 2023
August 2023
September 2023
October 2023
November 2023
December 2023
Total
January 2024
February 2024
Total
—
246,214
3,178,394
1,544,810
2,193,164
122,496
17,395
—
—
—
—
—
7,302,473
—
—
—
—
3.61
3.56
3.63
3.57
3.15
3.14
—
—
—
—
—
3.57
—
—
—
3.57
—
246,214
3,424,608
4,969,418
7,162,582
7,285,078
7,302,473
—
—
—
—
—
7,302,473
—
—
—
7,302,473
Total 2023 & 2024
7,302,473
(a) All purchases were made on the open market in accordance with Rule 10b-18 and Rule 10b5-1 under the Exchange Act.
ITEM 16F.
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Not Applicable.
ITEM 16G.
CORPORATE GOVERNANCE
Statement of Significant Differences Between our Corporate Governance Practices and the NYSE Corporate
Governance Standards for U.S. Non-Controlled Issuers
Overview
Pursuant to certain exceptions for foreign private issuers, we are not required to comply with certain of the corporate governance
practices followed by U.S. companies under the NYSE listing standards. However, pursuant to Section 303.A.11 of the NYSE
Listed Company Manual and the requirements of Form 20-F, we are required to state any significant differences between our
corporate governance practices and the practices required by the NYSE. We believe that our established practices in the area of
corporate governance are in line with the spirit of the NYSE standards and provide adequate protection to our shareholders. For
example, our audit committee consists solely of independent directors. The significant differences between our corporate gover-
nance practices and the NYSE standards applicable to listed U.S. companies are set forth below.
Independent Directors
The NYSE requires that listed companies have a majority of independent directors. As permitted under Marshall Islands law and
our bylaws, our board of directors consists of a majority of non-independent directors.
Executive Sessions
The NYSE requires that non-management directors meet regularly in executive sessions without management. The NYSE also
requires that all independent directors meet in an executive session at least once a year. As permitted under Marshall Islands
law and our bylaws, our non-management directors do not regularly hold executive sessions without management and we do not
expect them to do so.
Corporate Governance, Nominating and Compensation Committee
The NYSE requires that a listed U.S. company have a nominating/corporate governance committee and a compensation com-
mittee, each composed of independent directors. As permitted under Marshall Islands law and our bylaws, we have a combined
corporate governance, nominating and compensation committee, which at present is comprised solely of independent directors.
Shareholder Approval Requirements
The NYSE requires that a listed U.S. company obtain prior shareholder approval for certain issuances of authorized stock or the
approval of, and material revisions to, equity compensation plans. However, as permitted under Marshall Islands law, we do not
need to obtain prior shareholder approval in connection with such issuances or equity compensation plans.
ITEM 16H.
MINE SAFETY DISCLOSURE
Not Applicable.
ITEM 16I.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS
THAT PREVENT INSPECTIONS
Not Applicable.
ITEM 16J.
INSIDER TRADING POLICIES
Pursuant to applicable SEC transition guidance, the disclosure required by Item 16J will only be applicable to the Company from the
fiscal year ending on December 31, 2024.
ITEM 16K.
CYBERSECURITY
Our organization integrates cybersecurity risk management into our overall risk management strategy. This includes regular
risk assessments to identify potential cybersecurity threats and working with external cybersecurity experts. We also over-
see cybersecurity risks with third-party service providers. We assess the impact of cybersecurity threats on our business,
including our strategic direction, operational performance, and financial stability, using insights from any past cybersecurity
incidents.
The governance of cybersecurity risks is overseen by our board of directors, with the audit committee dedicated to this area.
This group receives regular updates on cybersecurity matters. Management, including specific roles and the audit committee
with cybersecurity expertise, handles the ongoing assessment and management of these risks. Their responsibilities include
monitoring cybersecurity threats, managing incidents, and communicating with the board of directors. This approach ensures
that we are prepared to identify, assess, and respond to cybersecurity challenges, aligning our risk management with our or-
ganizational goals. As of the date of this report, we are not aware of any material risks from cybersecurity threats that have
materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of opera-
tions, or financial condition.
SAFEBULKERS
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ANNUAL REPORT 2023
101
ITEM 17.
FINANCIAL STATEMENTS
Not Applicable.
ITEM 18.
FINANCIAL STATEMENTS
Reference is made to pages F-1 through F-36 incorporated herein by reference.
ITEM 19.
EXHIBITS
Exhibit
Description
1.1
First Amended and Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.1 on the
Company’s Registration Statement on Form F-1 (Reg. No. 333-150995))
1.2
Articles of Amendment of First Amended and Restated Articles of Incorporation (Incorporated by reference to
Exhibit 99.1 on the Company’s Form 6-K, filed on October 8, 2009)
1.3
First Amended and Restated Bylaws (Incorporated by reference to Exhibit 3.2 on the Company’s Registration
Statement on Form F-1 (Reg. No. 333-150995))
2.1
Form of Registration Rights Agreement between Safe Bulkers, Inc. and Vorini Holdings Inc. (Incorporated by
reference to Exhibit 4.2 on the Company’s Registration Statement on Form F-1 (Reg. No. 333-150995))
2.2
Shareholders Rights Agreement, dated August 5, 2020, between Safe Bulkers, Inc. and American Stock
Transfer & Trust Company (Incorporated by reference to Exhibit 4.1 on the Company’s Form 6-K, filed on
August 6, 2021)
2.3
Specimen Share Certificate (Incorporated by reference to Exhibit 4.1 on the Company’s Registration Statement
on Form F-1 (Reg. No. 333-150995))
2.4
2.5
2.6
Statement of Designation of the 8.00% Series C Cumulative Redeemable Perpetual Preferred Shares (Par
Value $0.01 Per Share) (Incorporated by reference to Exhibit 3.4 on the Company’s Form 8-A12B filed on May
7, 2014)
Statement of Designation of the 8.00% Series D Cumulative Redeemable Perpetual Preferred Shares (Par
Value $0.01 Per Share) (Incorporated by reference to Exhibit 3.4 on the Company’s Form 8-A12B filed on
June 30, 2014)
Statement of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock
(Incorporated by reference to Exhibit 3.1 on the Company’s Form 6-K, filed on August 6, 2021)
2.7
Description of Securities
4.1
Management Agreement, dated May 29, 2018, between Safety Management Overseas S.A. and Safe Bulkers,
Inc.
4.2
Management Agreement, dated May 29, 2018, between Safe Bulkers Management Limited and Safe Bulkers,
Inc.
4.3
Second Amended and Restated Restrictive Covenant Agreement, dated August 2, 2017, among Safe Bulkers,
Inc., Polys Hajioannou, Vorini Holdings Inc. and Machairiotissa Holdings Inc. (Incorporated by reference to
Exhibit 4.3 on the Company’s Form 20-F, filed on March 2, 2018)
Exhibit
Description
4.4
Second Amended and Restated Restrictive Covenant Agreement, dated August 2, 2017, between Safe
Bulkers, Inc. and Polys Hajioannou (Incorporated by reference to Exhibit 4.4 on the Company’s Form 20-F, filed
on March 2, 2018)
4.5
Amended and Restated Loan Agreement, dated October 3, 2018, by and among Safe Bulkers, Inc., DNB Bank
ASA, as Mandated Lead Arranger, DNB Bank ASA, as Agent, DNB Bank ASA, as Swap Provider, and DNB Bank
ASA, as Security Agent
4.6
4.7
4.8
4.9
4.10
4.11
Amended and Restated Loan Agreement, dated March 28, 2019, by and among Safe Bulkers, Inc., DNB Bank
ASA, as Mandated Lead Arranger, DNB Bank ASA, as Agent, DNB Bank ASA, as Swap Provider, and DNB Bank
ASA, as Security Agent
At-The-Market Equity Offering Sales Agreement between Safe Bulkers, Inc. and DNB Markets, Inc. (Incorporated
by reference to Exhibit 1.1 on the Company’s Form 6-K, filed on August 7, 2020)
Amendment No. 1 to the At-the-Market Equity Offering Sales Agreement, dated as of May 26, 2021, by and
between Safe Bulkers, Inc. and DNB Markets, Inc. (Incorporated by reference to Exhibit 1.1 on the Company’s
Form 6-K, filed on May 27, 2021)
Amended and Restated Loan Agreement, dated September 27, 2021, by and among Safe Bulkers, Inc., DNB
Bank ASA, as Mandated Lead Arranger,DNB Bank ASA, as Agent, DNB Bank ASA, as Swap Provider, and DNB
Bank ASA, as Security Agent
Indenture dated February 11, 2022, with respect to Safe Bulkers Participations Plc €100mm bond due 2027
with semi-annual coupon of 2.95% p.a., with Safe Bulkers, Inc. as guarantor
Restated Restrictive Covenant Agreement dated October 4, 2022among Safe Bulkers, Inc., Polys Hajioannou,
Vorini Holdings Inc. and Machairiotissa Holdings Inc.
4.12
Restrictive Covenant Agreement dated October 4, 2022, between Safe Bulkers, Inc. and Polys Hajioannou.
4.13
4.14
4.15
4.16
Amended and Restated Loan Agreement, dated September 27, 2021, by and among Safe Bulkers, Inc., DNB
Bank ASA, as Mandated Lead Arranger,DNB Bank ASA, as Agent, DNB Bank ASA, as Swap Provider, and DNB
Bank ASA, as Security Agent
Management Agreement between Safe Bulkers Management Monaco Inc. and Safe Bulkers, Inc. dated April 1
2022
Amended Management Agreement between Safe Bulkers Management Limited and Safe Bulkers, Inc. dated
April 1 2022
Amended Management Agreement between Safety Management Overseas S.A. and Safe Bulkers, Inc. dated
April 1 2022
8.1
List of Subsidiaries
12.1
Certification of principal executive officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities
Exchange Act of 1934, as amended
12.2
Certification of principal financial officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange
Act of 1934, as amended
13.1
Certification of principal executive officer pursuant to 18 U.S.C. Section 1350 as added by Section 906 of the
Sarbanes-Oxley Act of 2002
SAFEBULKERS
Exhibit
Description
13.2
Certification of principal financial officer pursuant to 18 U.S.C. Section 1350 as added by Section 906 of the
Sarbanes-Oxley Act of 2002
97.1
Policy for the Recovery of Erroneously Awarded Incentive-Based Compensation
101
The following materials from the Company’s Annual Report on Form 20-F for the fiscal year ended
December 31, 2023, formatted in lnline eXtensible Business Reporting Language (iXBRL): (i) Consolidated
Balance Sheets as of December 31, 2022 and 2023; (ii) Consolidated Statements of Income for the years
ended December 31, 2021, 2022 and 2023; (iii) Consolidated Statements of Shareholders’ Equity for the
years ended December 31, 2021, 2022 and 2023; (iv) Consolidated Statements of Cash Flows for the years
ended December 31, 2021, 2022 and 2023; and (v) Notes to Consolidated Financial Statements
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and autho-
rized the undersigned to sign this annual report on its behalf.
SIGNATURES
By: /s/ KONSTANTINOS ADAMOPOULOS
February 29, 2024
Name: Konstantinos Adamopoulos
Title: Chief Financial Officer and Director
102
ANNUAL REPORT 2023
ANNUAL REPORT 2023
Index to financial
statements
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 1163)
Consolidated Balance Sheets as of December 31, 2022 and 2023
Consolidated Statements of Operations for the Years Ended
December 31, 2021, 2022 and 2023
Consolidated Statements of Shareholders’ Equity for the Years Ended
December 31, 2021, 2022 and 2023
Consolidated Statements of Cash Flows for the Years Ended
December 31, 2021, 2022 and 2023
Notes to Consolidated Financial Statements
103
F1
F-2
F-4
F-5
F-6
F-7
F-9
SAFEBULKERS
F2
ANNUAL REPORT 2023
F3
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the future charter rates utilized in the undiscounted future cash flows included the following,
among others:
~ We tested the effectiveness of controls over management’s review of the impairment analysis, including the future charter
rates used within the undiscounted future cash flows analysis.
~ We evaluated the reasonableness of the Company’s estimate of future charter rates by:
1. Evaluating the Company’s methodology for estimating the future charter rates by comparing the future charter rates
utilized in the future undiscounted net operating cash flows to a) the Company’s historical rates, including the actual
scrubber premium earned on the Company’s past charter contracts, b) historical rate information by vessel class pub-
lished by third parties c) the Company’s budget and d) other external market sources, including analysts’ reports, market
reports on spreads on marine fuel (for determination of premium for scrubber fitted vessels) and reports on prospective
market outlook.
2. Considering the consistency of the assumptions used in the future charter rates, including scrubber premium, with
evidence obtained in other areas of the audit. This included a) internal communications by management to the board of
directors, and b) external communications by management to analysts and investors.
3. Evaluating management’s ability to accurately forecast by comparing actual results to management’s historical forecasts.
/s/ Deloitte Certified Public Accountants S.A.
Athens, Greece
February 29, 2024
We have served as the Company’s auditor since 2007.
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of
Safe Bulkers, Inc.
Majuro, Republic of the Marshall Islands.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Safe Bulkers Inc. and subsidiaries (the "Company") as of
December 31, 2023 and 2022, the related consolidated statements of income, shareholders' equity, and cash flows, for each
of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the "financial
statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company
as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period
ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established
in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated February 29, 2024, expressed an unqualified opinion on the Company's internal control over
financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether
due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also includ-
ed evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The com-
munication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are
not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts
or disclosures to which it relates.
Vessels, net – Future Charter Rates on vessels with impairment indication – Refer to Note 2 of the consolidated
financial statements.
Critical Audit Matter Description
The Company’s evaluation of its vessels for impairment involves an initial assessment of each vessel to determine whether events
or changes in circumstances exist that may indicate that the carrying amount of the vessel is greater than its fair value and may no
longer be recoverable. As at December 31, 2023, 8 out of 45 vessels had impairment indication excluding vessel M/V Pedhoulas
Cherry which was classified as held for sale as of December 31, 2023.
If indicators of impairment exist for a vessel, the Company determines the recoverable amount by estimating the undiscounted
future cash flows associated with the vessel. If the carrying value of the vessel exceeds its undiscounted future net cash flows,
the carrying value is reduced to its fair value. The undiscounted future cash flows incorporate various factors and significant as-
sumptions, including estimated future charter rates. Future charter rates reflect the rates currently in effect for the duration of
the vessels' current charters, and an estimated daily time charter equivalent for the unchartered period using the twelve -month
budgeted rate for the vessel class for the first year; the Forward Freight Agreement charter rate for the vessel class for the second
year; and thereafter, the most recent ten-year historical time charter average for the vessel class adding an estimated premium
for vessels with installed scrubbers.
We identified future charter rates, used in the undiscounted future cash flows analysis of vessels with impairment indication, as a
critical audit matter because of the complex judgments made by management to estimate future charter rates and the significant
impact they have on undiscounted cash flows expected to be generated over the remaining useful life of the vessel.
This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate
the reasonableness of management’s future charter rates.
SAFEBULKERS
F4
ANNUAL REPORT 2023
F5
SAFE BULKERS, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2022 AND 2023
(In thousands of U.S. Dollars, except for share and per share data)
SAFE BULKERS, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2021, 2022 AND 2023
(In thousands of U.S. Dollars, except for share and per share data)
Notes
2022
2023
December 31,
Notes
2021
2022
2023
Years Ended December 31,
REVENUES:
Revenues
Commissions
Net revenues
EXPENSES:
Voyage expenses
Vessel operating expenses
Depreciation and amortization
General and administrative expenses
- Management fee to related parties
- Company administration expenses
Early redelivery income, net
Other operating expense
Gain on sale of assets
Operating income
OTHER (EXPENSE)/INCOME:
Interest expense
Other finance cost
Interest income
Gain on derivatives
Foreign currency loss
Amortization and write-off of deferred finance charges
Net income
Less preferred dividend attributable
to preferred shareholders
Plus mezzanine equity measurement
Net income available to common shareholders
Earnings per share in U.S. Dollars, basic and diluted
Weighted average number of shares, basic and diluted
12
$
$
343,475
(14,444)
329,031
$
364,050
(14,332)
349,718
13
4,7
3,17
17
20
19
8
14
(9,753)
(72,049)
(52,364)
(19,221)
(3,277)
7,470
—
11,579
191,416
(14,719)
(798)
69
2,188
(910)
(2,898)
174,348
11,064
(9,969)
(80,211)
(49,518)
(17,723)
(4,079)
—
(3,570)
—
184,648
(17,138)
(1,353)
783
8,723
(1,101)
(2,008)
172,554
8,978
295,393
(10,992)
284,401
(21,666)
(89,201)
(54,129)
(19,199)
(4,564)
—
(1,869)
10,375
104,148
(24,707)
(756)
2,497
523
(1,873)
(2,481)
77,351
8,000
22
$
(271)
163,555
1.44
113,716,354
—
163,576
1.36
120,653,507
$
—
69,351
0.61
113,619,092
$
The accompanying notes are an integral part of these consolidated statements.
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Time deposits
Accounts receivable
Assets held for sale
Due from Manager
Inventories
Derivative assets
Accrued revenue
Restricted cash
Prepaid expenses and other current assets
Total current assets
FIXED ASSETS:
Vessels, net
Advances for vessels
Total fixed assets
OTHER NON CURRENT ASSETS:
Deferred financing costs
Restricted cash
Derivative assets
Accrued revenue
Other non current assets
Total assets
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt, net
Liability directly associated with assets held for sale
Unearned revenue
Trade accounts payable
Accrued liabilities
Derivative liabilities
Other financing liability
Due to Manager
Total current liabilities
Long-term debt, net
Unearned revenue
Derivative liabilities
Other liabilities
Total liabilities
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Common stock, $0.001 par value; 200,000,000 authorized, 118,868,317
and 111,607,828 issued and outstanding at December 31, 2022 and 2023,
respectively
Preferred stock, $0.01 par value; 20,000,000 authorized, 804,950 and
804,950 Series C Preferred Shares, 3,195,050 and 3,195,050 Series D
Preferred Shares, issued and outstanding at December 31, 2022 and 2023,
respectively
Additional paid in capital
Retained earnings
Total shareholders’ equity
Total liabilities and shareholders’ equity
The accompanying notes are an integral part of these consolidated statements.
$
49,186 $
64,191
6,475
11,980
22
17,323
1,098
662
1,000
5,764
157,701
1,001,120
76,280
1,077,400
510
8,900
1,156
225
26
1,245,918
43,556
16,930
9,520
10,487
10,766
—
—
58
91,317
370,806
7,330
307
4,242
474,002
119
40
6
3
14
18
4
5
14
18
8
6
18
15
14
7
3
8
18
14
11
9
9
48,191
39,731
8,786
24,229
14
16,652
8
477
2,020
6,613
146,721
1,091,518
89,703
1,181,221
255
8,850
2,669
87
13
1,339,816
24,781
—
10,853
10,442
8,383
526
748
—
55,733
482,391
3,248
—
5,933
547,305
112
40
378,968
392,789
771,916
1,245,918
352,897
439,462
792,511
1,339,816
SAFEBULKERS
F6
ANNUAL REPORT 2023
F7
SAFE BULKERS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED December 31, 2021, 2022 AND 2023
(In thousands of U.S. Dollars)
SAFE BULKERS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2021, 2022 AND 2023
(In thousands of U.S. Dollars)
Balance as of January 1, 2021
Net income
$
102 $
—
55 $
—
Common
Stock
Preferred
Stock
Additional
Paid in Capital
Retained
Earnings
90,306 $
174,348
—
—
—
271
Total
444,747
174,348
71,537
(719)
120
271
354,284 $
—
71,517
(719)
120
—
—
(11,064)
(11,064)
20
—
—
—
—
—
—
—
—
—
122 $
—
55 $
—
425,202 $
—
253,861 $
172,554
(15)
(37,299)
—
(3)
—
—
—
(9,048)
(7)
120
—
—
—
—
679,240
172,554
(37,314)
(9,051)
(7)
120
—
—
—
—
—
(24,142)
(24,142)
$
$
— $
— $
— $
(9,484) $
(9,484)
119 $
—
40 $
—
378,968 $
—
392,789 $
77,351
771,916
77,351
(7)
—
—
—
—
—
—
—
(26,215)
144
—
—
(26,222)
144
—
(22,678)
(22,678)
—
(8,000)
(8,000)
$
112 $
40 $
352,897 $
439,462 $
792,511
Issuance of common stock
Offering expenses of "at-the-market"
common stock equity offering
Share based compensation
Mezzanine equity measurement
Preferred share dividends declared and
paid ($2.00 per share of preferred C
shares and $2.00 per share of preferred
D shares)
Balance at December 31, 2021
Net income
$
Redemption of preferred stock
Repurchase and cancellation of
common stock
Preferred stock redemption expenses
Share based compensation
Common share dividends declared
and paid ($0.20 per share of common
stock)
Preferred share dividends declared and
paid ($2.00 per share of preferred C
shares and $2.00 per share of preferred
D shares)
Balance at December 31, 2022
Net income
Repurchase and cancellation of
common stock
Share based compensation
Common share dividends declared
and paid ($0.20 per share of common
stock)
Preferred share dividends declared and
paid ($2.00 per share of preferred C
shares and $2.00 per share of pre-
ferred D shares)
Balance at December 31, 2023
The accompanying notes are an integral part of these consolidated statements.
Cash Flows from Operating Activities:
Net income
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization
Gain on sale of assets
Unrealized loss on inventory valuation
Amortization and write-off of deferred finance charges
Unrealized (gain)/loss on derivatives
Unrealized foreign exchange loss/(gain)
Share based compensation
Change in:
Accounts receivable
Due from Manager
Inventories
Accrued revenue
Prepaid expenses and other current assets
Due to Manager
Trade accounts payable
Accrued liabilities
Non current assets & Other liabilities
Unearned revenue
Net Cash Provided by Operating Activities
Cash Flows from Investing Activities:
Vessel advances
Proceeds from sale of assets
Increase in bank time deposits
Maturity of bank time deposits
Net Cash Provided by/(Used in) Investing Activities
Cash Flows from Financing Activities:
Proceeds from long-term debt
Principal payments of long-term debt
Dividends paid
Payment of deferred financing costs
Finance lease payments
Other Financing liability payments
Proceeds on issuance of common stock
Payment of common stock offering expenses
Repurchase of common stock
Redemption of preferred stock
Payment of preferred stock redemption expenses
Net Cash (Used in)/Provided by Financing Activities
Net decrease in cash, cash equivalents and restricted cash
Effect of exchange rate changes on cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of year
Cash, cash equivalents and restricted cash at end of year
2021
December 31,
2022
2023
174,348
172,554
77,351
52,364
(11,579)
—
2,898
(8,438)
794
120
(3,198)
48
3,902
(315)
351
51
(3,988)
(829)
1,435
9,244
217,208
49,518
—
3,570
2,008
4,666
(5,316)
120
1,607
(22)
(13,176)
60
(2,280)
7
505
4,669
1,709
(2,153)
218,046
(109,230)
107,084
(2,310)
13,010
8,554
(183,276)
16,930
(79,817)
16,759
(229,404)
178,800
(434,746)
(11,198)
(2,425)
(9,786)
—
71,537
(381)
—
(17,707)
—
(225,906)
(144)
(794)
112,192 $
111,254
259,575
(191,302)
(33,626)
(6,405)
(21,971)
—
—
—
(9,051)
(37,314)
(7)
(40,101)
(51,459)
(709)
111,254 $
59,086
$
54,129
(10,375)
1,869
2,481
(204)
882
144
(2,311)
8
(683)
323
(849)
(58)
385
160
1,704
(2,749)
122,207
(209,103)
30,773
(52,870)
79,474
(151,726)
255,200
(165,226)
(30,678)
(2,846)
—
(1,087)
—
—
(26,222)
—
—
29,141
(378)
353
59,086
59,061
SAFEBULKERS
F8
ANNUAL REPORT 2023
F9
Supplemental cash flow information:
Cash paid for interest (excluding capitalized interest):
Non Cash Investing and Financing Activities:
Unpaid financing fees
Unpaid capital expenditures
Right of use asset recognized
Unpaid Lease liability on initial recognition
Reconciliation of Cash, Cash Equivalents and Restricted Cash:
Cash and cash equivalents
Restricted cash – Current assets
Restricted cash – Non current assets
Cash, cash equivalents and restricted cash shown
in the statement of cash flows
The accompanying notes are an integral part of these consolidated statements.
2021
December 31,
2022
2023
13,693
13,670
22,340
1,303
1,482
32,107
22,757
101,004
—
10,250
180
3,704
—
—
49,186
1,000
8,900
103
842
—
—
48,191
2,020
8,850
$
111,254 $
59,086 $
59,061
SAFE BULKERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of United States Dollars—except for share and per share data, unless otherwise stated)
1. Basis of Presentation and General Information
Safe Bulkers, Inc. (“Safe Bulkers”) was formed on December 11, 2007, under the laws of the Republic of the Marshall Islands.
Safe Bulkers’ common stock trades on the New York Stock Exchange (“NYSE”) under the symbol “SB”.
Polys Hajioannou, by virtue of shares owned indirectly through various private entities, owns or controls 43.35% of our out-
standing common stock and is the largest shareholder of Safe Bulkers and as a result has significant influence on the outcome
of matters on which shareholders are entitled to vote, including the election of the entire board of directors and other significant
corporate actions.
Since Safe Bulkers’ initial public offering in 2008, Safe Bulkers has successfully completed five additional public common stock
offerings, three preferred stock offerings and an unsecured bond issuance, and it partially completed an “at-the-market” common
stock equity offering program (the “ATM Program”) .
As of December 31, 2023, Safe Bulkers held 69 wholly owned companies (which are referred to herein as “Subsidiaries”) which
together owned and operated a fleet of 46 drybulk vessels and were scheduled to acquire eight additional newbuild vessels (the
“Newbuilds”).
Safe Bulkers and its Subsidiaries are collectively referred to in the notes to the consolidated financial statements as the
“Company”.
The Company’s principal business is the ownership and operation of drybulk vessels. The Company’s vessels operate worldwide,
carrying drybulk cargo for the world’s largest consumers of marine drybulk transportation services. Safety Management Over-
seas S.A., a company incorporated under the laws of the Republic of Panama (“Safety Management”), Safe Bulkers Management
Limited, a company incorporated under the laws of the Republic of Cyprus (“Safe Bulkers Management”) and together with Safety
Management the “Original Managers”, and Safe Bulkers Management Monaco Inc., a company incorporated under the laws of the
Republic of the Marshall Islands (“Safe Bulkers Management Monaco” or "New Manager") and together with the Original Managers
the “Managers” and either of them “the Manager”, related parties all controlled by Polys Hajioannou, provide technical, commer-
cial and administrative management services to the Company.
The accompanying consolidated financial statements include the operations, assets and liabilities of the Company, and of its
Subsidiaries listed below.
Subsidiary
Vessel Name
Type
Built
Marathassa Shipping Corporation (“Marathassa”)(1)
Napalem Shipping Corporation (“Napalem”)(2) (14)(15)
Glovertwo Shipping Corporation (“Glovertwo”)(2)
Stalem Shipping Corporation (“Stalem”)(2) (15)
Shikokutessera Shipping Inc. (“Shikokutessera”)(2)
Shikokupente Shipping Inc. (“Shikokupente”)(2)
Gloverfour Shipping Corporation (“Gloverfour”)(2)
Shikokuokto Shipping Corporation (“Shikokuokto”)(2)
Gloverfive Shipping Corporation (“Gloverfive”)(2)
Gloversix Shipping Corporation (“Gloversix”)(2) (13)
Pemer Shipping Ltd. (“Pemer”)(1)
Pelea Shipping Ltd. (“Pelea”)(1)
Vassone Shipping Corporation (“Vassone”)(2)
Youngone Shipping Corporation (“Youngone”)(2) (26)
Youngtwo Shipping Corporation (“Youngtwo”)(2)
Pinewood Shipping Corporation (“Pinewood”)(2) (5)
Agros Shipping Corporation (“Agros”)(2)
Yasudyo Shipping Corporation (“Yasudyo”)(2) (18)
Shimafive Shipping Corporation (“Shimafive”)(2) (19)
Shimaeight Shipping Corporation (“Shimaeight”)(2) (20)
Marinouki Shipping Corporation (“Marinouki”)(1)
Soffive Shipping Corporation (“Soffive”)(1)
Vasstwo Shipping Corporation (“Vasstwo”)(1)
Eniaprohi Shipping Corporation (“Eniaprohi”)(1)
Eniadefhi Shipping Corporation (“Eniadefhi”)(1)
Maritsa
Paraskevi 2
Zoe
Koulitsa 2
Kypros Land
Kypros Sea
Kypros Bravery
Kypros Sky
Kypros Loyalty
Kypros Spirit
Pedhoulas Merchant
Pedhoulas Leader
Pedhoulas Commander
Pedhoulas Cherry
Pedhoulas Rose
Pedhoulas Cedrus
Vassos
Pedhoulas Trader
Morphou
Rizokarpaso
Marina
Sophia
Xenia
Eleni
Martine
January 2005
April 2011
July 2013
February 2013
January 2014
March 2014
January 2015
March 2015
June 2015
July 2016
March 2006
March 2007
May 2008
July 2015
January 2017
June 2018
May 2022
September 2023
October 2023
November 2023
January 2006
June 2007
Panamax
Panamax
Panamax
Panamax
Panamax
Panamax
Panamax
Panamax
Panamax
Panamax
Kamsarmax
Kamsarmax
Kamsarmax
Kamsarmax
Kamsarmax
Kamsarmax
Kamsarmax
Kamsarmax
Kamsarmax
Kamsarmax
Post-Panamax
Post-Panamax
Post-Panamax August 2006
Post-Panamax November 2008
Post-Panamax
February 2009
F10
ANNUAL REPORT 2023
F11
SAFEBULKERS
Subsidiary
Vessel Name
Type
Built
Andreas K
Agios Spyridonas
Panayiota K
Venus Heritage
Venus History
Venus Horizon
Venus Harmony
Troodos Sun
Troodos Air
Troodos Oak
Climate Respect
Climate Ethics
Climate Justice
Kanaris
Pelopidas
Lake Despina
Mount Troodos
Stelios Y
Michalis H
Maxdodeka Shipping Corporation (“Maxdodeka”)(1)
Pentakomo Shipping Corporation (“Pentakomo”)(2)
Maxdekatria Shipping Corporation (“Maxdekatria”)(1)
Maxdeka Shipping Corporation (“Maxdeka”)(2)
Shikoku Friendship Shipping Company (“Shikoku”)(2)
Maxenteka Shipping Corporation (“Maxenteka”)(2)
Vaslem Shipping Corporation (“Vaslem”)(2) (15)
Shikokuepta Shipping Inc. (“Shikokuepta”)(2)
Kastrolem Shipping Corporation (“Kastrolem”)(2) (15)
Monagrouli Shipping Corporation (“Monagrouli”)(2)
Lofou Shipping Corporation (“Lofou”)(2)
Gloverthree Shipping Corporation (“Gloverthree”)(2) (16)
Gloverseven Shipping Corporation (“Gloverseven”)(2) (17)
Maxpente Shipping Corporation (“Maxpente”)(1)
Eptaprohi Shipping Corporation (“Eptaprohi”)(1)
Maxtessera Shipping Corporation (“Maxtessera”)(2)
Shikokuennia Shipping Corporation (“Shikokuennia”)(2)
Metamou Shipping Corporation (“Metamou”)(2)
Armonikos Shipping Corporation (“Armonikos”)(2)
Kyotofriendo One Shipping Corporation (“Kyotofriendo One”)(2) Aghia Sofia
Staloudi Shipping Corporation (“Staloudi”)(1)
Shimasix Shipping Corporation (“Shimasix”)(2) (21)
Shimaseven Shipping Corporation (“Shimaseven”)(2) (22)
Shimanine Shipping Corporation (“Shimanine”)(2) (4)
Shimaten Shipping Corporation (“Shimaten”)(2) (4)
Shimaeleven Shipping Corporation (“Shimaeleven”)(2) (4) (27)
Agonistis Shipping Corporation (“Agonistis”)(2) (4)
Georgos Shipping Corporation (“Georgos”)(2) (4)
Kypriakes Aktes Inc. (“Kypriakes Aktes”)(2) (4) (28)
Kypriakes Grammes Inc. (“Kypriakes Grammes”)(2) (4) (28)
Safe Bulkers Participations Plc. ("Safe Bulkers Participations")(3) —
—
Shikokuexi Shipping Inc. (“Shikokuexi”)(2)
Kyotofriendo Two Shipping Corporation (“Kyotofriendo Two”)(2) (14) —
Maxeikosipente Shipping Corporation (“Maxeikosipente”)(1)
—
—
Maxeikosiepta Shipping Corporation (“Maxeikosiepta”)(1) (6)
—
Marindou Shipping Corporation (“Marindou”)(1) (10)
Maxeikosiexi Shipping Corporation (“Maxeikosiexi”)(1) (11)
—
—
Avstes Shipping Corporation (“Avstes”)(1) (7)
Maxeikosi Shipping Corporation (“Maxeikosi”)(1) (8)
—
Maxeikositria Shipping Corporation (“Maxeikositria”)(1) (12)
—
—
Maxeikosiena Shipping Corporation (“Maxeikosiena”)(1) (9)
Petra Shipping Ltd. (“Petra”)(1) (23)
—
Maxeikositessera Shipping Corporation (“Maxeikositessera”)(2) (24) —
Kerasies Shipping Corporation (“Kerasies”)(1) (25)
—
Maria
Ammoxostos
Kerynia
TBN - H 11115
TBN - H 11166
TBN - H 11167
TBN - H 1139
TBN - H 1138
TBN - H SS386
TBN - H SS387
January 2016
September 2009
January 2010
Post-Panamax
Post-Panamax
Post-Panamax April 2010
Post-Panamax December 2010
September 2011
Post-Panamax
Post-Panamax
February 2012
Post-Panamax November 2013
Post-Panamax
Post-Panamax March 2016
Post-Panamax April 2020
July 2022
Post-Panamax
January 2023
Post-Panamax
June 2023
Post-Panamax
March 2010
Capesize
November 2011
Capesize
January 2014
Capesize
November 2009
Capesize
March 2012
Capesize
March 2012
Capesize
March 2012
Capesize
January 2014
Capesize
January 2024
Kamsarmax
January 2024
Kamsarmax
Q2 2025
Kamsarmax
Q2 2026
Kamsarmax
Q3 2026
Kamsarmax
Q1 2025
Kamsarmax
Q3 2024
Kamsarmax
Q4 2026
Kamsarmax
Q1 2027
Kamsarmax
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
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(1) Incorporated under the laws of the Republic of Liberia.
(2) Incorporated under the laws of the Republic of the Marshall Islands.
(3) Safe Bulkers Participations is a wholly owned subsidiary of Safe Bulkers, incorporated under the laws of the Republic of Cyprus and is the holding company
of five wholly owned subsidiaries: Vaslem, Napalem, Stalem, Kastrolem and Marilem Shipping Corporation, a company incorporated under the laws of the
Republic of Marshall Islands in January 2024. Safe Bulkers Participations has issued and listed an unsecured bond of euro 100 million to the Athens
Stock Exchange. See Note 8.
(4) Estimated completion date for newbuild vessels as of December 31, 2023.
(5) In July 2016, the Shipsales Contract relating to Hull No. 1552, initially contracted by Kyotofriendo Two, was novated to Pinewood. Under an agreement
with an unaffiliated third party, upon delivery of the vessel, named Pedhoulas Cedrus, to Pinewood in June 2018, 100 shares of Series A Preferred Stock
of Pinewood were issued to the unaffiliated third party for proceeds in the equivalent of $16,875 at the time of issuance, which were used to finance part
of the cost of such vessel. All Series A Preferred Stock were redeemed by Pinewood in February 2021.
(6) The Company owned the Panamax class vessel Paraskevi, built 2003, which was sold in January 2021 and delivered to her new owners in April 2021.
(7) The Company owned the Panamax class vessel Vassos, built 2004, which was sold in January 2021 and delivered to her new owners in May 2021.
(8) The Company owned the Kamsarmax class vessel Pedhoulas Builder, built 2012, which was sold in May 2021 and delivered to her new owners in June
2021.
(9) The Company owned the Kamsarmax class vessel Pedhoulas Farmer, built 2012, which was sold in May 2021 and delivered to her new owners in
September 2021.
(10) The Company owned the Panamax class vessel Maria, built 2003, which was sold in May 2021 and delivered to her new owners in September 2021.
(11) The Company owned the Panamax class vessel Koulitsa, built 2003, which was sold in June 2021 and delivered to her new owners in November 2021.
(12) The Company owned the Kamsarmax class vessel Pedhoulas Fighter, built 2012, which was sold in September 2021 and delivered to her new owners in
November 2021.
(13) In February 2024, Gloversix entered into an agreement with Marilem Shipping Corporation, a wholly owned subsidiary of Safe Bulkers Participations,
incorporated under the laws of the Republic of Marshall Islands in January 2024, for the sale of the Panamax class vessel Kypros Spirit, built 2016, which
is scheduled to be delivered in the first quarter of 2024.
(14) In February 2024, Kyotofriendo Two entered into an agreement with Napalem for the purchase of the Panamax class vessel Paraskevi 2, built 2011, which
is scheduled to be delivered in the first quarter of 2024.
(15) Wholly owned subsidiary of Safe Bulkers Participations.
(16) The Company acquired the vessel Climate Ethics in January 2023.
(17) The Company acquired the vessel Climate Justice in June 2023.
(18) The Company acquired the vessel Pedhoulas Trader in September 2023.
(19) The Company acquired the vessel Morphou in October 2023.
(20) The Company acquired the vessel Rizokarpaso in November 2023.
(21) The Company acquired the vessel Ammoxostos in January 2024. See subsequent events Note 23.
(22) The Company acquired the vessel Kerynia in January 2024. See subsequent events Note 23.
(23) The Company owned the Kamsarmax class vessel Pedhoulas Trader, built 2006, which was sold in September 2022 and delivered to her new owners in
January 2023.
(24) The Company owned the Panamax class vessel Efrossini, built 2012, which was sold in March 2023 and delivered to her new owners in July 2023.
(25) The Company owned the Panamax class vessel Katerina, built 2004, which was sold in November 2023 and delivered to her new owners in December
2023.
(26) The Company owned the Kamsarmax class vessel Pedhoulas Cherry, built 2015, which was sold in November 2023 and delivered to her new owners in
February 2024. See subsequent events Note 23.
(27) In January 2024, the company entered into a contract for the construction and acquisition of a newbuild Kamsarmax class vessel scheduled for delivery in
2026. See subsequent events Note 23.
(28) The company entered into an agreement for the acquisition of a methanol dual fueled Kamsarmax class dry bulk newbuild vessel.
For the years ended December 31, 2021, 2022 and 2023 the following charterers individually accounted for more than 10% of
the Company’s revenues as follows:
Cargill International S.A.
Olam International Limited
Viterra B.V. (ex-Glencore Agriculture B.V.)
2.Significant Accounting Policies
December 31,
2021
14.62 %
— %
16.08 %
2022
17.71 %
— %
15.81 %
2023
16.69 %
10.18 %
— %
Principles of Consolidation: The accompanying consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include all accounts of the Company.
All intercompany balances and transactions have been eliminated upon consolidation.
Use of Estimates: The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the
reporting period. Significant estimates may include recoverability of long -lived assets, the valuation of amounts due from charter-
ers, residual value of vessels and the useful life of vessels. Actual results may differ from these estimates.
Other Comprehensive Income: The Company follows the accounting guidance relating to Statement of Comprehensive Income,
which requires separate presentation of certain transactions that are recorded directly as components of shareholders’ equity. The
Company has no other comprehensive income and accordingly comprehensive income equals net income for the periods presented.
Foreign Currency Translation: The reporting and functional currency of the Company is the U.S. dollar (“USD”). Transactions
incurred in other currencies are translated into USD using the exchange rates in effect at the time of the transaction. On the bal-
ance sheet date, monetary assets and liabilities that are denominated in other currencies are translated into USD to reflect the
end-of-period exchange rates. Resulting gains or losses from foreign currency transactions are recorded within foreign currency
gain/(loss) in the accompanying consolidated statements of income in the period in which they arise.
Cash and Cash Equivalents: Cash and cash equivalents consist of current, call, time deposits and certificates of deposit with
original maturities of three months or less and which are not restricted for use or withdrawal.
Time Deposits: Time deposits are held with banks with original maturities longer than three months. In the event remaining
maturities are shorter than 12 months, such deposits are classified as current assets; if original maturities are longer than 12
months, such deposits are classified as non-current assets.
SAFEBULKERS
F12
ANNUAL REPORT 2023
F13
Restricted Cash: Restricted cash represents minimum cash deposits or cash collateral deposits required to be maintained with
certain banks under the Company’s borrowing arrangements or in relation to bank guarantees issued on behalf of the Company.
In the event that the obligation relating to such deposits is expected to be terminated within the next 12 months, these deposits
are classified as current assets; otherwise they are classified as non-current assets.
Accounts Receivable: Accounts receivable reflect trade receivables from time or voyage charters and other receivables from
operational activities, net of an allowance for doubtful accounts. On each balance sheet date, all potentially uncollectible accounts
are assessed individually for purposes of determining the appropriate provision for doubtful accounts. No allowance for doubtful
accounts was recorded for any of the periods presented.
Inventories: Inventories consist of bunkers and lubricants owned by the Company remaining on board the vessels at the end of
each reporting period, which are stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out
method. Inventories consist of $11,649 and $11,020 of bunkers and of $5,674 and $5,632 of lubricants as of December 31,
2022 and 2023, respectively.
Vessels, Net: Vessels are stated at their cost, which consists of the contracted purchase price and any direct material expenses
incurred upon acquisition (including improvements, on-site supervision expenses and financing costs incurred during the con-
struction period for vessels under construction, commissions paid, delivery expenses and other expenditures to prepare the ves-
sel for her initial voyage), less accumulated depreciation and impairment, if any. Certain subsequent expenditures for conversions,
major improvements and regulatory requirements are also capitalized if it is determined that they appreciably extend the life,
increase the earning capacity or improve the efficiency or safety of the vessels.
Vessels’ Depreciation: Depreciation is computed using the straight-line method over the estimated useful life of the vessels, after
considering the estimated residual value. The Company estimates the useful life of its vessels to be 25 years from the date of
initial delivery from the shipyard. Second-hand vessels are depreciated from the date they become available for use through their
remaining estimated useful life. Effective January 1, 2022, we changed the estimate of vessels' residual value, from a scrap rate
of $182 per light weight ton to $375 per light weight ton.
Accounting for Special Survey and Drydocking Costs: Special survey and drydocking costs are expensed in the period incurred
and are included in vessel operating expenses in the accompanying consolidated statements of income.
Repairs and Maintenance: Repair and maintenance expenses, including overhauling and underwater inspection expenses, are
expensed when incurred and are included in vessel operating expenses in the accompanying consolidated statements of income.
Impairment of Vessels: The Company follows the Accounting Standards Codification (“ASC”) Subtopic 360-10, “Property, Plant
and Equipment” (“ASC 360-10”), which requires impairment losses to be recorded on long-lived assets used in operations when
indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than
their carrying amounts. If indicators of impairment are present, the Company performs an analysis of the anticipated undiscount-
ed future net cash flows of the related vessels. Various factors including anticipated future charter rates, estimated scrap values,
future drydocking costs and estimated voyage and vessel operating costs are included in this analysis. If the carrying value of the
related vessel exceeds the undiscounted cash flows, the carrying value is reduced to its estimated fair value and the difference is
recorded as an impairment loss in the consolidated statements of income.
Assets Held for Sale: The Company may dispose of certain of its vessels when suitable opportunities occur, including prior to the
end of their useful lives. The Company classifies assets as being held for sale when the following criteria are met: (i) management
is committed to sell the asset; (ii) the asset is available for immediate sale in its present condition; (iii) an active program to locate
a buyer and other actions required to complete the plan to sell the asset have been initiated; (iv) the sale of the asset is probable,
and transfer of the asset is expected to qualify for recognition as a completed sale within one year; (v) the asset is being actively
marketed for sale at a price that is reasonable in relation to its current fair value; and (vi) actions required to complete the plan
indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
Assets classified as held for sale are measured at the lower of their carrying amount or fair value less the cost to sell the asset.
These assets are no longer depreciated once they meet the criteria of being held for sale.
Right-of-Use Asset - Finance Leases: The Company assesses whether a contract is, or contains, a lease, at inception of the
contract. A right-of-use asset and a corresponding lease liability is recognized with respect to all lease arrangements in which the
Company is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less). For these leases,
the lease payments are recognized as an operating expense on a straight-line basis over the term of the lease. The Company does
not have any significant operating leases.
A lease is classified as a finance lease when the lease meets any of the following criteria at lease commencement a) the lease
transfers ownership of the underlying asset to the lessee by the end of the lease term, b) the lease grants the lessee an option
to purchase the underlying asset that the lessee is reasonably certain to exercise, c) the lease term is for the major part of the
remaining economic life of the underlying asset, d) the present value of the sum of the lease payments and any residual value
guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all of the fair value of
the underlying asset or e) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the
lessor at the end of the lease term. When none of these criteria is met, the lease is classified as an operating lease.
Finance leases are accounted for as the acquisition of a finance right-of-use asset and the incurrence of an obligation by the les-
see. At the commencement date of the finance lease, a lessee initially measures the lease liability at the present value, using the
discount rate determined on the commencement of the lease payments to be made over the lease term. Subsequently, the lease
liability is increased by the interest on the lease liability and decreased by the lease payments during the period. The interest on
the lease liability is determined in each period during the lease term as the amount that produces a constant periodic discount rate
on the remaining balance of the liability, taking into consideration the reassessment requirements.
A lessee initially measures the finance right-of-use asset at cost which consists of: the amount of the initial measurement of the
lease liability; any lease payments made to the lessor at or before the commencement date, less any lease incentives received;
and any initial direct costs incurred by the lessee. Subsequently, the finance right-of-use asset is measured at cost less any ac-
cumulated amortization and any accumulated impairment losses, taking into consideration the reassessment requirements. The
finance right-of-use asset is amortized on a straight-line basis from the commencement date to the end of the useful life of the
finance right-of-use asset where the lease transfers ownership of the underlying asset to the lessee or the lessee is reasonably
certain to exercise an option to purchase the underlying asset.
Deferred Financing Costs: Financing fees incurred for obtaining new loans and credit facilities are deferred and amortized over
the term of the respective loan or credit facility using the effective interest rate method. The unamortized deferred financing costs
are presented as a direct deduction from the carrying amount of the related loan and credit facility in the consolidated balance
sheet. Deferred financing costs relating to undrawn facilities are presented under non-current assets in the consolidated balance
sheet. Any unamortized balance of costs relating to loans repaid or refinanced is expensed in the period in which the repayment
or refinancing is made, subject to the guidance regarding Debt Extinguishment. Any unamortized balance of costs related to
credit facilities repaid and terminated is expensed in the same period. Any unamortized balance of costs relating to the credit
facilities refinanced is deferred and amortized over the term of the respective refinanced credit facility in the period in which the
refinancing occurs, subject to the provisions of the accounting guidance relating to changes in Line-of-Credit or Revolving-Debt
Arrangements.
Derivative Instruments: The Company may enter into foreign exchange forward contracts, interest rate derivatives, bunker fuel
price derivatives and forward freight contracts to create economic hedges for its exposure to foreign currency movement, interest
rates of its loan obligations, bunker fuel consumed by its vessels and freight rates relating to the fluctuation of the vessel charter
markets and on certain other obligations. When such derivatives do not qualify for hedge accounting the Company records these
financial instruments in the consolidated balance sheet at their fair value as either a derivative asset or a liability, and recognizes
the fair value changes thereto in the consolidated statements of income. When the derivatives do qualify for hedge accounting,
depending upon the nature of the hedge, changes in fair value of the derivatives are either offset against the fair value of assets,
liabilities or firm commitments through income, or recognized in other comprehensive income/(loss) (effective portion) until the
hedged item is recognized in the consolidated statements of income. For the years ended December 31, 2021, December 31,
2022 and December 31, 2023, no derivatives were accounted for as accounting hedges.
Financial Instruments:
(a) Interest rate risk: The Company’s interest rates and long-term loan repayment terms are described in Note 8. The Com-
pany manages its interest rate risk by entering into interest rate derivative instruments which are described in Note 14.
(b) Concentration of credit risk: Financial instruments, which potentially subject the Company to significant concentrations of
credit risk, consist principally of trade accounts receivable, cash and cash equivalents, time deposits and derivative instru-
ments. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers’
financial condition and generally does not require collateral for its trade accounts receivable as charter hire is usually col-
lected in advance. The Company places its cash and cash equivalents, time deposits and other investments with high credit
quality financial institutions. The Company performs periodic evaluations of the relative credit standing of financial institu-
tions it transacts with. The Company may be exposed to credit risk in the event of non-performance by its counterparties to
derivative instruments; however, the Company limits its exposure by transacting with counterparties with high credit ratings.
(c) Fair value measurement: In accordance with the requirements of accounting guidance relating to Fair Value Measurement,
the Company classifies and discloses assets and liabilities carried at fair value in one of the following three categories:
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs that are not corroborated by market data.
Accounting for Revenues and Related Expenses: The Company generates its revenues from charterers for the charter hire of its
vessels. Vessels are chartered under time charter or infrequently under voyage contracts.
A time charter is a contract for the use of a vessel for a specific period of time and a specified daily fixed charter hire rate, or
a rate linked to either the Baltic Exchange Panamax Index (“BPI”) or to the Baltic Exchange Capesize Index (“BCI”). The charter
hire is generally payable in advance. The Company’s time charter agreements are classified as operating leases pursuant to ASC
842 - Leases ("ASC 842"), because (i) the vessel is an identifiable asset, (ii) the Company does not have substantive substitu-
tion rights and (iii) the charterer has the right to control the use of the vessel, during the term of the contract, and derives the
economic benefits from such use. Time charter revenue is recognized when a charter agreement exists, the vessel is made avail-
able to the charterer and collection of the related revenue is reasonably assured. Time charter revenues are recognized as earned
on a straight-line basis over the term of the charter as service is provided. Revenues from time charter may also include ballast
bonus, which is an amount paid by the charterer for repositioning the vessel at the charterer’s disposal (delivery point), which is
recognized as revenue over the term of the charter, and other miscellaneous revenues from vessel operations. Time charter hire
is typically payable 15 or 30 days in advance as determined in the charter party agreement. On implementation of ASC 842 on
January 1, 2019, the Company elected to apply a package of practical expedients under ASC 842, which allowed the Company
not to reassess (i) whether any existing contracts, on the date of adoption, contained a lease, (ii) lease classification of existing
leases classified as operating leases in accordance with ASC 840 and (iii) initial direct costs for any existing leases. ASC 842
also provides a practical expedient to lessors by class of underlying asset, to not separate non-lease components from the as-
sociated lease component when the following criteria are met: (i) the timing and pattern of transfer for the lease component is the
SAFEBULKERS
F14
ANNUAL REPORT 2023
F15
same as those for the non-lease component associated with that lease component and (ii) the lease component, if accounted for
separately, would be classified as an operating lease. The Company, making use of this practical expedient for lessors, has elected
not to separate the lease and non-lease components included in the time charter revenue but rather to recognize operating lease
revenue as a combined single lease component for all time charter contracts as the related lease component, the hire of a vessel,
and non-lease component, the fees for operating and maintaining the vessel, have the same timing and pattern of transfer (both
the lease and non-lease components are earned by passage of time) and the predominant component is the lease.
Expenses relating to the Company’s time charters are vessel operating expenses and certain voyage expenses, which are paid by
the Company and recognized as incurred. Vessel operating expenses that are paid by the Company include costs for crewing, in-
surance, lubricants, spare parts, provisions, stores, repairs, maintenance, statutory and classification expense, drydocking, inter-
mediate and special surveys and other minor miscellaneous expenses. Voyage expenses which are also recognized as incurred by
the Company include costs for draft surveys, hold cleaning, postage, extra war risk insurance and other minor miscellaneous ex-
penses related to the voyage. Voyage expenses relating to bunkers consumption during the ballast period are considered contract
fulfillment costs and are capitalized and amortized over the term of the charter when they meet the following criteria according to
ASC 340-40-25-5: (i) the costs relate directly to a contract or to an anticipated contract that the entity can specifically identify,
(ii) the costs generate or enhance resources of the entity that will be used in satisfying, or in continuing to satisfy, performance
obligations in the future and (iii) the costs are expected to be recovered. Under a time charter, the charterer is responsible for
paying the cost of bunkers and other voyage expenses (e.g., port expenses, agents’ fees, canal dues, extra war risks insurance and
any other expenses related to the cargo). Certain voyage expenses paid by the Company such as extra war risk insurance may be
recovered from the charterer; such amounts recovered are recorded as Other Income within Revenues.
Vessels are also chartered under voyage charters, where a contract is made for the use of a vessel under which the Company is
paid freight on the basis of moving cargo from a loading port to a discharge port. The Company accounts for a voyage charter
when all the following criteria are met: (i) the parties to the contract have approved the contract in the form of a written charter
agreement or fixture recap and are committed to perform their respective obligations, (ii) the Company can identify each party’s
rights regarding the services to be transferred, (iii) the Company can identify the payment terms for the services to be transferred,
(iv) the charter agreement has commercial substance (that is, the risk, timing, or amount of the future cash flows is expected
to change as a result of the contract) and (v) it is probable that the Company will collect substantially all of the consideration to
which it will be entitled in exchange for the services that will be transferred to the charterer. The voyage contracts are considered
service contracts which fall under the provisions of ASC 606 because the Company as the ship-owner retains the control over the
operations of the vessel such as directing the routes taken or the vessel speed. In a voyage charter contract, the performance ob-
ligations begin to be satisfied once the vessel begins loading the cargo. The Company determined that its voyage charters consist
of a single performance obligation which is met evenly as the voyage progresses and hence, the voyage revenues are recognized
on a straight -line basis over the duration of the voyage from commencement of the loading to completion of discharge. Probable
losses on voyages are provided for in full at the time such losses can be estimated. Related expenses are operating expenses,
bunkers and voyage expenses and are all paid for by the Company. Costs incurred prior to loading which are directly related to the
voyage, primarily bunkers, may be deferred, as they represent setup costs, if they meet certain conditions, and are amortized on a
straight-line basis as the related performance obligations are satisfied over the duration of the voyage from load port to discharge
port. Such deferred costs are presented in prepaid expenses and other current assets on the Consolidated Balance Sheets. Costs
incurred during the voyage are expensed as incurred.
Voyage hire is typically paid partially upon initiation of the voyage and partially upon completion of the performance obligation.
During the years ended December 31, 2021, December 31, 2022 and December 31, 2023, there have been three instances in
2021 and no instances in 2022 and 2023, where a vessel was employed under a voyage charter. All voyage charters during the
year ended December 31, 2021 ended in the same period.
Unearned revenue includes: (i) cash received prior to the balance sheet date relating to services to be rendered after the balance
sheet date and (ii) deferred revenue resulting from straight-line revenue recognition in respect of charter agreements that provide
for varying charter rates. Accrued revenue results from straight-line revenue recognition in respect of charter agreements that
provide for varying charter rates.
Commissions (address and brokerage), regardless of charter type, are always paid by the Company, are deferred and amortized
over the related charter period and are presented as a separate line item in revenues to arrive at net revenues in the accompany-
ing consolidated statements of income.
Taxes: Entities within the group that are incorporated under the laws of either the Republic of Liberia or the Republic of the Marshall
Islands or the Republic of Cyprus are not subject to Liberian or Marshall Islands or Cyprus income taxes. However, each vessel-own-
ing Subsidiary is subject to registration and tonnage taxes under the laws of the Republic of Cyprus or the Republic of the Marshall
Islands depending on where each Company’s vessel is registered. As of January 1, 2013, each vessel managed in Greece is subject
to tonnage tax, under the laws of the Republic of Greece. These registration and tonnage taxes are recorded within Vessel operating
expenses in the accompanying consolidated statements of income and none are considered income taxes.
For our 2021, 2022 and 2023 taxable years, we believe we were exempt from U.S federal tax on our U.S. source gross shipping
income.
Dividends: Dividends are recorded in the period in which they are declared by the Company’s board of directors.
Earnings/(Loss) Per Share: The computation of basic earnings/(loss) per share is based on the weighted average number of com-
mon stock outstanding during the year and includes the shares issuable to the audit committee chairman and the independent
directors at the end of each year for services rendered. The computation of basic earnings/(loss) per share is calculated after
deducting the preferred stock dividends paid and accrued (including any deemed dividend) from net income/(loss) divided by the
weighted average number of shares.
Segment Reporting: The Company reports financial information and evaluates its operations by total charter revenue and not by
the type of vessel or vessel employment for its customers. The Company’s vessels have similar operating and economic charac-
teristics. As a result, the board of directors of the Company, the chief operating decision makers, review operating results solely
by revenue per day and operating results of the fleet, and thus the Company has determined that it operates under one reportable
segment. Furthermore, when the Company charters a vessel to a charterer, the charterer is free to trade the vessel worldwide and,
as a result, the disclosure of geographic information is impracticable.
Recent Accounting Pronouncements:
Disclosure Improvements: In October 2023, the Financial Accounting Standards Board issued Accounting Standard Update (“ASU”)
No. 2023-06, “Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification
Initiative”. The amendments in this Update modify the disclosure or presentation requirements of a variety of Topics in the Codifica-
tion. Certain of the amendments represent clarifications to or technical corrections of the current requirements. The effective date
for each amendment of the ASU 2023-06 will be, for entities subject to the SEC’s existing disclosure requirements and for entities
required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that
are not subject to contractual restrictions on transfer, the date on which the SEC’s removal of that related disclosure from Regulation
S-X or Regulation S-K becomes effective, with early adoption prohibited. For all other entities, the amendments will be effective two
years later. The amendments in ASU 2023-06 should be applied prospectively. The Company evaluated the impact of this ASU on
its financial Statements and determined that there is no impact as the disclosure improvements required by the ASU amendments are
already required by the SEC's Regulation S-X and Regulation S-K.
3.Transactions with Related Parties
A. The Managers
The Company enters from time to time into management agreements with the Managers for the provision of executive officers and
management services to vessel-owning Subsidiaries. Pursuant to the management agreements, the vessel-owning Subsidiaries
enter into separate ship management agreements with either one of the Managers under which chartering, operations, technical
and accounting services are provided to the vessels. Pursuant to the management agreements, the Subsidiaries that have entered
into agreements to acquire newbuild vessels are required to enter into supervision agreements with either one of the Managers.
The Managers under these agreements receive fees (the “Fees”), comprised of ship management fees (the “Ship Management
Fees”), supervision fees (the “Supervision Fees”) and sale and purchase commissions (the “Commissions”). The Managers are
related parties that are controlled by Polys Hajioannou.
On May 29, 2018, following the expiration of the old management agreements, Safe Bulkers signed new management agree-
ments with the Original Managers (the “Original Management Agreements”). The Original Management Agreements had an initial
term of three years expiring on May 28, 2021 and could be extended for two additional terms of three years each. The fees
provided by the Original Management Agreements were fixed until May 29, 2021 and could be adjusted for a subsequent term
of three years each time on May 29, 2021 and May 29, 2024 upon mutual agreement with the Original Managers. On May 29,
2021, the Company and the Original Managers agreed to extend the term of the Original Management Agreements until May
29, 2024. On April 1, 2022, Safe Bulkers signed a new management agreement with the New Manager, and together with the
Original Management Agreements the "Management Agreements", with the initial term expiring on May 29, 2024, which could
be extended for one additional term of three years.
In accordance with the Management Agreements, the Managers receive:
~ Ship Management Fees comprised of a daily ship management fee of €875 per vessel, payable monthly in arrears to the re-
spective Manager and an annual ship management fee of €3,500,000 payable quarterly in arrears to only one of the Man-
agers. For the three -year period from May 29, 2018 to May 28, 2021 the annual ship management fee was €3,000,000.
~ Supervision Fees of $550 with respect to each newbuild for the services rendered by one of the Managers under the super-
vision agreement of which 50% is payable upon the signing of the relevant supervision agreement, and 50% is payable
upon successful completion of the sea trials of each newbuild.
~ Commissions equal to 1.00% calculated on the price set forth in the memorandum of agreement or other sale and pur-
chase newbuild contract, or any other vessel bought or sold by the Company, payable upon final delivery of such vessel to
the relevant purchaser. No commissions are charged on sale and lease back transactions.
The Ship Management Fees are recorded in Management Fees to Related Parties within General and Administrative Expenses (refer
to Note 17). The Commissions on purchase of newbuilds or second-hand vessels and the Supervision Fees are recorded initially in
Advances for vessels (refer to Note 5). The Commissions on sale are recorded in Gain or Loss on sale of assets, as the case may be.
Amounts due from/to the Manager under the management agreements were $22 receivable and $58 payable as of December 31,
2022 and $14 receivable and $0 payable as of December 31, 2023.
The Fees charged by our Managers comprised the following:
SAFEBULKERS
Ship Management Fees
Supervision Fees
Commissions
$
2021
19,221
550
1,689
F16
2023
19,199
3,575
2,157
Year Ended December 31,
2022
17,723
1,100
1,870
$
$
B. Credit Facility
During 2022, Eptaprohi, Soffive, Marinouki, Marathassa, Kerasies, Pemer and Lofou entered into a credit facility (refer to Note
8) with a financial institution for an amount up to $80,000 secured by the vessels owned by the respective subsidiaries. At the
same time, all credit facilities with this financial institution were refinanced and cancelled, namely the revolving credit facility of
the Company signed in 2019 for an original amount of $20,000 and increased to $30,000 in 2020, the Lofou credit facility
signed in 2020 for an original amount up to $20,000 and increased to $25,000 in 2022, and the Eptaprohi, Soffive, Marinouki,
Marathassa, Kerasies, Pemer and Petra credit facility signed in 2021 for an original amount of up to $70,000. During 2023,
Eptaprohi, Soffive, Marinouki, Marathassa, Kerasies, Pemer and Lofou agreed with the same financial institution the extension of
the tenor by six months, from June 2028 to December 2028, and a change in the margin of the existing credit facility entered
into in 2022. One of the independent members of the board of directors of the Company currently serves as the Chief Executive
Officer of this financial institution. All above transactions were evaluated and approved by the board of directors of the Company
excluding that independent member of the board of directors of the Company.
C. Principal Executive Office Lease
The Company leases office space from a company controlled by Polys Hajioannou, at Apt. D11, Les Acanthes, 6, Avenue des Cit-
ronniers, MC98000 Monaco, where our principal executive office is established. The office space lease contract was for a period
from February 2014 until February 2023 with an annual lease payment initially agreed in 2014 in the amount of EUR 63,000
equivalent to $67 as of December 31, 2022, adjusted annually based on the cost of construction as published in the National In-
stitute of Statistics & Economic Studies of Monaco, plus expenses, and is recorded in “General and administrative expenses” in the
Consolidated Statements of Income. In January 2023, the office space lease contract was renewed with an annual lease payment
in the amount of EUR 86,400, equivalent to $95 as of December 31, 2023, adjusted annually based on the cost of construction
as published in the National Institute of Statistics & Economic Studies of Monaco, plus expenses, and is recorded in “General and
administrative expenses” in the Consolidated Statements of Income.
D. Bond issuance
In February 2022, Safe Bulkers Participations successfully completed a public offer in Greece of €100,000,000 of an unsecured
bond (the “Bond”), that was admitted for trading on the Athens Exchange under the ticker symbol SBB1 (refer to Note 8). One of
the independent members of the board of directors of the Company currently serves as the Chief Executive Officer of the financial
institution that was the adviser and one of the lead underwriters in the public offer of the Bond. The transaction was evaluated and
approved by the board of directors of the Company excluding that independent member of the board of directors of the Company.
4.Vessels, Net
Vessels, net are comprised of the following:
Balance, January 1, 2022
Transfer from Advances for vessels
Transfer from Right-of-use asset
Transfer to Assets held for sale
Depreciation
December 31, 2022
Transfer from Advances for vessels
Vessels sales
Transfer to Assets held for sale
Depreciation
December 31, 2023
Vessel
Cost
1,267,622
165,353
32,160
(26,345)
—
1,438,790
192,819
(46,330)
(33,674)
—
1,551,605
Accumulated
Depreciation
(403,231)
—
(1,523)
15,301
(48,217)
(437,670)
—
21,846
9,866
(54,129)
(460,087)
$
$
$
$
$
$
Net Book
Value
864,391
165,353
30,637
(11,044)
(48,217)
1,001,120
192,819
(24,484)
(23,808)
(54,129)
1,091,518
$
$
$
Transfer from Advances for vessels represents advances paid for vessels under construction and vessels acquisitions which were
delivered to the Company, completed vessel improvements in respect of ballast water treatment systems (“BWTS”), sulfur oxide
exhaust gas cleaning systems (“Scrubbers”), and vessel environmental upgrades and comprised:
~ During the year ended December 31, 2022: Delivery to the Company of the vessels Vassos, Climate Respect, Maria, Aghia
Sofia and Michalis H and BWTS and Scrubbers retrofitting and vessel improvements on several vessels; and
ANNUAL REPORT 2023
F17
~ During the year ended December 31, 2023: Delivery to the Company of the vessels Climate Justice, Climate Ethics, Ped-
houlas Trader, Morphou and Rizokarpaso and BWTS and Scrubbers retrofitting and vessel improvements on several vessels.
Transfer from Right-of-use asset in the amount of $30,637, represents the advance payments, the initial direct costs paid for the ves-
sel Stelios Y and the present value of the future lease payments due under a bareboat charter amounting to $32,160 net of amortiza-
tion of $1,523, that were transferred to Vessel cost and Accumulated depreciation, respectively, at the end of the bareboat charter
period in November 2022, whereupon ownership of the vessel passed to Metamou, refer to Note 7.
Transfer to Assets held for sale during the year ended December 31, 2023 relates to the vessel Pedhoulas Cherry. Transfer to Assets
held for sale during the year ended December 31, 2022 relates to the vessel Pedhoulas Trader. Refer to Note 6.
Vessel sales during the year ended December 31, 2023 represents the carrying value of the vessels Efrossini and Katerina which
were sold during the year ended December 31, 2023, taking advantage of the improved market. No vessels were sold during the year
ended December 31, 2022.
Consistent with prior practices, we reviewed all our vessels for impairment and none were found to be impaired at December 31, 2022
and December 31, 2023.
As of December 31, 2023, 27 vessels owned by the Company with a carrying value of $603,157 had first priority mortgages regis-
tered as security for certain of the Company’s loans and credit facilities, while title of ownership is held by the relevant lender for anoth-
er 11 vessels with a carrying value of $311,481 to secure the relevant sale and lease back financing transactions. See further Note 8.
5.Advances for Vessels
Advances for vessels are comprised of the following:
Balance, January 1, 2022
Additions for advances, including capitalized expenses and interest
Transferred to vessel cost (refer to Note 4)
Balance, December 31, 2022
Additions for advances, including capitalized expenses and interest
Transferred to vessel cost (refer to Note 4)
Balance, December 31, 2023
$
$
56,484
185,149
(165,353)
76,280
206,242
(192,819)
89,703
Advances paid for vessels represent advances paid for vessel acquisitions, vessels under construction and vessel improvements
and comprise payments of installments that were due to the respective shipyard or third-party sellers, capitalized interest, certain
capitalized expenses and expenditures for major improvements and regulatory compliance. During the years ended December 31,
2022 and December 31, 2023, such payments were made for the following vessels:
~ During the year ended December 31, 2022: advances for Vassos, Climate Respect, Climate Ethics, Climate Justice, Hull
1138 and Hull 1139, Maria, Michalis H, Aghia Sofia and BWTS and Scrubbers retrofitting and improvements for several
vessels; and
~ During the year ended December 31, 2023: advances for Climate Justice, Climate Ethics, Pedhoulas Trader, Morphou,
Rizokarpaso, Ammoxostos, Kerynia, Hull 1138, Hull 1139, Hull 11115, Hull 11166, Hull 386 and Hull 387 and BWTS
and Scrubbers retrofitting and improvements for several vessels.
6. Assets Held for Sale
Assets held for sale of $24,229 as of December 31, 2023, represent the carrying value of the vessel Pedhoulas Cherry of
$23,808 plus $421 being the value of bunkers and lubricants onboard on the same date. A Memorandum of Agreement (“MoA”)
was entered into with an unrelated third party on November 27, 2023, for her sale at a price of $26,625, which was consum-
mated in February 2024 on delivery of the vessel to her new buyers. The Company, in the context of its plan to gradually renew
its fleet by selling certain of its older vessels, in November 2023, determined to dispose of this vessel and commenced seeking
interested buyers. At that time, the Company concluded that the vessel met all the criteria for an asset held for sale classification,
and ceased her depreciation. As of December 31, 2023, there were no liabilities directly associated with assets held for sale.
Assets held for sale of $11,980 as of December 31, 2022, represent the carrying value of the vessel Pedhoulas Trader of
$11,044 plus $936 being the value of bunkers and lubricants onboard on the same date. A MoA was entered into with an un-
related third party on September 21, 2022, for her sale at a price of $15,900, which was consummated in January 2023 on
delivery of the vessel to her new buyers. The Company, in the context of its plan to gradually renew its fleet by selling certain of its
older vessels, in September 2022, determined to dispose of this vessel and commenced seeking interested buyers. At that time,
the Company concluded that the vessel met all the criteria for an asset held for sale classification, and ceased her depreciation.
As of December 31, 2022, the Company had classified as liabilities directly associated with assets held for sale the amount of
$16,930, representing the sale proceeds and the value of estimated bunkers and lubricants on board that had been received prior
to the delivery of the vessel in January 2023.
7. Right-of-use asset/Lease Liability and Other financing liability
In March 2023, the Company entered into an agreement to sell MV Efrossini to an unaffiliated third party at a gross sale price
of $22,500 and charter her back for a period of ten to fourteen months at a gross daily charter rate of $16,050. The sale was
SAFEBULKERS
F18
ANNUAL REPORT 2023
consummated in July 2023, when the vessel was delivered to her new owners, renamed MV Arethousa, and immediately taken
back on charter by the Company.
The transaction was assessed according to ASC 842-40 and ASC 606-10 and it was concluded that the transfer of the asset is
a sale and that the sale was not at fair value since the net sale price was greater than the fair value of the asset at the time the
sale was consummated. The difference between the net sale price and the fair value of MV Efrossini at the time the sale was con-
summated amounting to $1,800 was recognized as other financing liability, amortized over the period of the lease, at each lease
payment date, by an amount equal to the portion of the hire payments allocated to that liability. Furthermore, in accordance with
ASC 842-20, as the non cancelling lease term was less than 12 months the Company accounted for the transaction as a short
term lease and did not recognize a right-of-use asset or a corresponding lease liability, instead the lease payments are recognized
as an operating expense on a straight-line basis over the term of the lease.
Other financing liability of $748 as of December 31, 2023 represents the outstanding balance of the reduction of the sale price
plus interest accrued, net of the portion of the hire payments allocated to the financing liability.
In July 2021, Metamou entered into a 12 -month period bareboat charter with the third-party owners of vessel Stelios Y. The
charter included an option for Metamou to purchase the vessel at the end of the bareboat charter period, which Metamou exer-
cised. The vessel was delivered to Metamou in November 2021. Pursuant to the charter, Metamou paid to the owners an advance
of $9,000 as security for its correct fulfillment, and daily charter hire of $14,500 from lease commencement until the end of
the lease period. At the end of the bareboat charter period in November 2022, Metamou paid an additional $18,000, whereupon
ownership of the vessel passed to Metamou.
Upon commencement of the bareboat charter the Company recognized a Right-of-use asset representing the advance payments, the
initial direct costs paid for the vessel Stelios Y and the present value of the future lease payments due under the bareboat charter and
a respective Lease Liability. At the end of the bareboat charter period in November 2022, whereupon ownership of the vessel passed
to Metamou, the Right-of-use asset in the amount of $30,637, representing the advance payments, the initial direct costs paid for
the vessel Stelios Y and the present value of the future lease payments due under this bareboat charter amounting to $32,160 net
of amortization of $1,523, were transferred to Vessel cost and Accumulated depreciation, respectively.
The Company determined that the bareboat charter did not contain an implicit borrowing rate. Therefore, the discount rate that
was used for the recognition of this lease was the estimated annual incremental borrowing rate for this type of asset which was
estimated at 2.69%. The lease liability expired in November 2022.
The table below presents the components of the Company’s finance lease expense for the years ended December 31, 2022 and 2023:
Description
Finance lease cost:
Amortization of Right-of-use asset
Interest on Lease liability
Operating lease cost:
Interest on Other financing liability
Total
Location in Consolidated Statement of Income
2022
2023
December 31,
Depreciation and amortization
Interest expense
$ 1,301
463
Interest expense
—
$
$ 1,764
$
$
$
—
—
35
35
8. Long Term Debt
Long term debt is comprised of the following borrowings:
Borrower
Safe Bulkers
Safe Bulkers
Monagrouli
Commencement
Maturity
September 2021
September 2026
December 2021
December 2026
April 2020
April 2027
Pelea - Vasstwo - Eniaprohi - Vassone
December 2018
December 2028
Shimafive
Sub Total Credit facility
Safe Bulkers
Eptaprohi - Soffive - Marinouki - Marathassa -
Kerasies - Pemer - Lofou
Pentakomo - Maxdekatria - Gloverthree -
Gloverseven
Sub Total Revolving credit facility
October 2023
October 2030
December 2021
December 2026
December 2022
December 2028
15,000
50,000
June 2023
June 2031
—
30,000
15,000
93,000
December 31,
2022
10,500
20,600
19,360
23,750
—
74,210
—
2023
10,500
20,600
19,360
23,750
25,500
99,710
13,000
Pentakomo
Maxdekatria
Shikokuokto
Gloversix
Maxdeka
Shikoku
Shikokutessera
Glovertwo
Maxtessera
Kyotofriendo One
Pinewood
Shikokuepta
Agros
Yasudyo
Shimaeight
January 2020
January 2023
January 2020
January 2023
December 2019
September 2023
December 2019
September 2023
November 2019
August 2025
November 2019
August 2025
November 2019
August 2025
November 2019
August 2025
April 2021
October 2026
September 2022
September 2027
February 2021
February 2031
August 2021
August 2031
May 2022
May 2032
September 2023
September 2033
November 2023
November 2033
Sub Total Sale and leaseback financing
Safe Bulkers Participations
February 2022
February 2027
Sub Total Bond
Total
Current portion of long-term debt
Long-term debt
Total debt
Current portion of deferred financing costs
Deferred financing costs non-current
Total deferred financing costs
Total debt
Less: Total deferred financing costs
Total debt, net of deferred financing costs
Less: Current portion of long-term debt, net of
current portion of deferred financing costs
Long-term debt, net of deferred financing
costs, non-current
F19
December 31,
10,500
10,500
14,000
14,560
14,978
15,756
15,384
14,412
24,798
24,690
20,695
21,167
24,943
—
—
226,383
106,985
106,985
422,578
45,722
376,856
422,578
2,166
6,050
8,216
—
—
—
—
12,821
13,486
13,216
12,342
21,401
21,737
18,823
19,167
23,197
29,051
27,616
212,857
110,364
110,364
515,931
27,156
488,775
515,931
2,375
6,384
8,759
422,578
515,931
8,216
8,759
414,362
507,172
43,556
24,781
370,806
482,391
A. Credit Facilities & Revolving Credit Facilities
During 2018, Pelea, Vasstwo, Eniaprohi and Vassone entered into a credit facility with a financial institution for $47,750, secured
by the vessels owned by them. The credit facility was drawn down in two tranches, a tranche of $23,075 drawn down in 2018 and
a second tranche of $24,675 drawn down in 2019. During 2022, the maturity of the facility was extended to December 2028.
During 2020, Monagrouli entered into a credit facility with a financial institution for $26,400, regarding the newbuild vessel
Monagrouli had agreed to acquire. The credit facility was drawn down in 2020 upon the delivery of the newbuild vessel.
In September 2021, Safe Bulkers amended one of its credit facilities and agreed to a new structure for a credit facility of $60,000
secured by the vessels owned by Eniadefhi, Maxdodeka, Gloverfour, Gloverfive and Youngone, comprising a term loan tranche of
$30,000 and a reducing revolving credit facility tranche providing for a drawdown capacity of up to $30,000. The proceeds from
the credit facility were used to partially refinance loan facilities with the same financial institution of an outstanding term loan
tranche of $71,139 and a revolving credit facility tranche with a drawdown capacity of $7,000, secured by six vessels. Five of
those vessels secured the new credit facility, and the vessel owned by Shikokuexi remained debt free. As of December 31, 2023,
no amount was outstanding and an amount of $30,000 was available for drawdown under the reducing revolving credit facility
tranche. In January 2024, the vessel owned by Youngone was released from the security package and the availability of the re-
volving credit facility tranche was reduced by $5,000.
In December 2021, Safe Bulkers entered into a credit facility of $100,000 secured by the vessels owned by Youngtwo,
Shikokupente, Maxeikositessera, Maxenteka, Maxpente and Shikokuennia, comprising a term loan tranche of $50,000 and
a reducing revolving credit facility tranche providing for a drawdown capacity of up to $50,000. The proceeds were used to
SAFEBULKERS
F20
ANNUAL REPORT 2023
F21
refinance loan facilities in the amount of $50,000 secured by five of these vessels, and the repurchase of the vessel owned by
Youngtwo under a sale and leaseback agreement. In July 2023, the vessel owned by Maxeikositessera was released from the
security package, and in September 2023, the vessel owned by Shikokuokto was added to the security package, in both cases
without any amendment of either the term loan tranche or the availability of the reducing revolving credit facility tranche. As
of December 31, 2023, $13,000 was outstanding and an amount of $37,000 was available for drawdown under the reducing
revolving credit facility tranche.
In December 2022, Eptaprohi, Soffive, Marinouki, Marathassa, Kerasies, Pemer and Lofou entered into a revolving reducing credit
facility for an amount up to $80,000 secured by the vessels owned by them. At the same time, all credit facilities with this finan-
cial institution were refinanced and cancelled, namely the revolving credit facility of the Company that had been signed in 2019
for an original amount of $20,000, the Lofou credit facility signed in 2020 for an original amount up to $20,000, increased to
$25,000 in July 2022, and the Eptaprohi, Soffive, Marinouki, Marathassa, Kerasies, Pemer and Petra credit facility and reducing
revolving credit facility signed in 2021 for an original amount of up to $70,000. During the year ended December 31, 2023, the
maturity of the revolving reducing credit facility was extended from June 2028 to December 2028 and its margin was amended.
In December 2023, the vessel owned by Kerasies was released from the security package without any amendment in the avail-
ability of the reducing revolving credit facility. As of December 31, 2023, an amount of $50,000 was outstanding and an amount
of $30,000 was available for drawdown under the reducing revolving credit facility tranche.
During 2022, Shimafive entered into a credit facility with a financial institution for $25,500, regarding the newbuild vessel Shi-
mafive has agreed to acquire. The credit facility was drawn down in October 2023 upon delivery of the newbuild vessel.
During 2022, Shimaseven entered into a credit facility with a financial institution for $25,500, regarding the newbuild vessel
Shimaseven has agreed to acquire. The credit facility was drawn down in January 2024 upon delivery of the newbuild vessel.
In January 2023, Pentakomo, Maxdekatria, Gloverthree,and Gloverseven entered into a credit facility with a financial institution
for a reducing revolving credit facility providing for a drawdown capacity of up to $67,500, to be converted to a credit facility in
June 2026. The facility was made available in June 2023, upon delivery of the newbuild vessel Gloverseven had agreed to ac-
quire. As of December 31, 2023, an amount of $30,000 was outstanding and an amount of $34,500 was available for drawdown
under the reducing revolving credit facility.
B. Sale and Leaseback Financings
Sale and leaseback financing represents financing obtained from concluding an agreement to sell the vessel and then lease her
back under a bareboat charter for a pre-determined period with either an obligation or an option to purchase (that is reasonably
certain, at inception, will be exercised) the vessel back at the end of the respective charter period or an option to purchase the re-
spective vessel during the charter period at predetermined purchase prices. Transactions which involve a purchase obligation (or
a purchase option that is reasonably certain, at inception, that will be exercised) are treated as a failed sale and hence represent
merely a financing arrangement. The above table includes eleven such facilities outstanding as of December 31, 2023, whereby
the relevant vessels were formerly owned by our respective subsidiaries and ownership will revert back to the Company on settle-
ment of the outstanding amounts. Details of these facilities are as follows:
Each of Shikokutessera, Maxdeka, Shikoku and Glovertwo entered into a sale and leaseback agreement in November 2019, with
third party companies, subsidiaries of a financial institution, regarding the respective vessel owned by the relevant subsidiary.
The proceeds from each of these agreements were used to fully prepay the amount outstanding under previous credit facilities
secured by the respective vessels and for general corporate purposes. Under these agreements, the respective vessel was sold
and leased back on a bareboat charter basis, in the case of the vessel owned by Shikokutessera for a period of 8 years, and in the
case of the other three vessels for seven and a half years. Each respective subsidiary holds an option to purchase back its respec-
tive vessel five years and nine months after the commencement of the respective bareboat charter. The sale and leaseback agree-
ments include onerous provisions for the relevant subsidiaries in the event that such options are not exercised. The Company has
verbally committed to exercise this purchase option for all four vessels. In view of this commitment and the onerous provisions if
the options are not exercised, the Company has assessed that these transactions be recorded as financing transactions.
Each of Shikokuokto and Gloversix entered into a sale and leaseback agreement in December 2019, with third party companies,
subsidiaries of a financial institution, regarding the respective vessel owned by the relevant subsidiary. The proceeds from each
of these agreements were used to fully prepay the amount outstanding under previous credit facilities secured by the respective
vessels and for general corporate purposes. Under these agreements, each vessel was sold and leased back on a bareboat charter
basis for a period of 8 years, with a purchase obligation at the end of the 8th year. Furthermore, each respective subsidiary holds
an option to purchase back its respective vessel after the third year of the bareboat charter, at predetermined purchase prices.
In view of the obligation of the subsidiaries to purchase the respective vessels at the end of the bareboat charter, the Company
has assessed that these transactions be recorded as financing transactions. In September 2023, both Shikokuokto and Gloversix
exercised their respective purchase options, repaid all outstanding amounts under the sale and leaseback agreements and took
ownership of the respective vessels.
Each of Pentakomo and Maxdekatria entered into a sale and leaseback agreement in January 2020, with third party companies,
subsidiaries of a financial institution, regarding the respective vessel owned by the relevant subsidiary. The proceeds from each
of these agreements were used to fully prepay the amount outstanding under previous credit facilities secured by the respective
vessels and for general corporate purposes. Under these agreements, each vessel was sold and leased back on a bareboat charter
basis for a period of 6 years, with a purchase obligation at the end of the 6th year. Furthermore, each respective subsidiary held
an option to purchase back its respective vessel after the third year of the bareboat charter, at predetermined purchase prices.
In view of the obligation of the subsidiaries to purchase the respective vessels at the end of the bareboat charter, the Company
has assessed that these transactions be recorded as financing transactions. In January 2023, both Pentakomo and Maxdekatria
exercised their respective purchase options, repaid all outstanding amounts under the sale and leaseback agreements and took
ownership of the respective vessels.
Pinewood entered into a sale and leaseback agreement in January 2021, consummated in February 2021, with an unrelated third
party, regarding the vessel owned by Pinewood. The proceeds were used for the redemption of all issued and outstanding shares of
Pinewood's series A cumulative redeemable perpetual preferred stock that had been previously issued to a third party investor and
for general corporate purposes. Under the agreement, the vessel was sold and leased back on a bareboat charter basis for a period of
10 years, with a purchase obligation at the end of the 10th year. Furthermore, Pinewood holds an option to purchase back the ves-
sel after the third year of the bareboat charter, at predetermined purchase prices. In view of the obligation of Pinewood to purchase
the vessel at the end of the bareboat charter, the Company has assessed that this transaction be recorded as financing transaction.
Maxtessera entered into a sale and leaseback agreement in March 2021, consummated in April 2021, with a third party com-
pany, subsidiary of a financial institution, regarding the vessel owned by Maxtessera. The proceeds from this agreement were used
to fully prepay the amount outstanding under a previous credit facility secured by the vessel and for general corporate purposes.
Under this agreement, the vessel was sold and leased back on a bareboat charter basis for a period of 7 years. Maxtessera holds
an option to purchase back its vessel five years and six months after the commencement of the bareboat charter. The sale and
leaseback agreement includes onerous provisions for the subsidiary in the event that such option is not exercised. The Company
has verbally committed to exercise this purchase option. In view of this commitment and the onerous provisions where the option
was not exercised, the Company has assessed that this transaction be recorded as a financing transaction.
Shikokuepta entered into a sale and leaseback agreement in July 2021, consummated in August 2021, with an unrelated third
party, regarding the vessel owned by Shikokuepta. The proceeds were used for general corporate purposes. Under the agreement,
the vessel was sold and leased back on a bareboat charter basis for a period of 10 years, with a purchase obligation at the end of
the 10th year. Furthermore, Shikokuepta holds an option to purchase back the vessel after the third year of the bareboat char-
ter, at predetermined purchase prices. In view of the obligation of Shikokuepta to purchase the vessel at the end of the bareboat
charter, the Company has assessed that this transaction be recorded as financing transaction.
Agros entered into a sale and leaseback agreement in October 2020, with an unrelated third party, regarding the newbuild vessel
Agros had agreed to acquire. The transaction was consummated in May 2022 upon delivery of the vessel to Agros. Under the
agreement, the vessel was sold and leased back on a bareboat charter basis for a period of 10 years, with a purchase obligation
at the end of the 10th year. Furthermore, Agros holds an option to purchase back the vessel after the third year of the bareboat
charter, at predetermined purchase prices. In view of the obligation of Agros to purchase the vessel at the end of the bareboat
charter, the Company has assessed that this transaction be recorded as a financing transaction.
Kyotofriendo One entered into a sale and leaseback agreement, with an unrelated third party in 2022, regarding the second-hand
vessel Kyotofriendo One acquired during 2022. Under the agreement, the vessel was sold and leased back on a bareboat charter
basis for a period of five years, with a purchase obligation at the end of the 5th year. Furthermore, Kyotofriendo One holds an
option to purchase back the vessel after the third year of the bareboat charter, at predetermined purchase prices. In view of the
obligation of Kyotofriendo One to purchase the vessel at the end of the bareboat charter, the Company has assessed that this
transaction be recorded as a financing transaction.
Yasudyo entered into a sale and leaseback agreement in March 2023, with an unrelated third party, regarding the newbuild vessel
Yasudyo had agreed to acquire. The transaction was consummated in September 2023 upon delivery of the vessel to Yasudyo.
Under the agreement, the vessel was sold and leased back on a bareboat charter basis for a period of 10 years, with a purchase
obligation at the end of the 10th year. Furthermore, Yasudyo holds an option to purchase back the vessel after the third year of
the bareboat charter, at predetermined purchase prices. In view of the obligation of Yasudyo to purchase the vessel at the end of
the bareboat charter, the Company has assessed that this transaction be recorded as a financing transaction.
Shimaeight entered into a sale and leaseback agreement in October 2023, with an unrelated third party, regarding the newbuild
vessel Shimaeight had agreed to acquire. The transaction was consummated in November 2023 upon delivery of the vessel to
Shimaeight. Under the agreement, the vessel was sold and leased back on a bareboat charter basis for a period of 10 years, with
a purchase obligation at the end of the 10th year. Furthermore, Shimaeight holds an option to purchase back the vessel after
the third year of the bareboat charter, at predetermined purchase prices. In view of the obligation of Shimaeight to purchase the
vessel at the end of the bareboat charter, the Company has assessed that this transaction be recorded as a financing transaction.
Shimasix entered into a sale and leaseback agreement in December 2023, with an unrelated third party, regarding the newbuild
vessel Shimasix had agreed to acquire. The transaction was consummated in January 2024 upon delivery of the vessel to Shi-
masix. Under the agreement, the vessel was sold and leased back on a bareboat charter basis for a period of 10 years, with a
purchase obligation at the end of the 10th year. Furthermore, Shimasix holds an option to purchase back the vessel after the third
year of the bareboat charter, at predetermined purchase prices. In view of the obligation of Shimasix to purchase the vessel at the
end of the bareboat charter, the Company has assessed that this transaction be recorded as a financing transaction.
Our financing facilities bear interest at SOFR plus a margin plus a credit adjustment spread where applicable, except for the
Kyotofriendo One sale and leaseback transaction and a portion of each of Shikokutessera, Maxdeka, Shikoku, Glovertwo and Maxt-
essera sale and leaseback transactions. A portion of each of the Shikokutessera, Maxdeka, Shikoku, Glovertwo and Maxtessera
financing facilities are deemed to incur interest at a fixed rate calculated so that the initial facility amount be amortized to matu-
rity down to the purchase option price of each vessel.
Our financing facilities are generally repayable by monthly or quarterly principal installments and a balloon payment due on
maturity. The fair value of debt outstanding on December 31, 2023 amounted to $407,595 when valuing the Shikokutessera,
SAFEBULKERS
F22
ANNUAL REPORT 2023
F23
Maxdeka, Shikoku, Glovertwo, Maxtessera and Kyotofriendo One loan facilities on the basis of the deemed equivalent fixed rate, as
applicable on December 31, 2023, which are considered to be Level 2 items in accordance with the fair value hierarchy.
In addition to the Shimasix and Shimaseven financings noted above, which were both available upon delivery of the respective
vessel, as of December 31, 2023, a total amount of $131,500 was available for drawdown under the reducing revolving credit
facilities and reducing revolving credit facility tranches.
Our loan and credit facilities were secured as follows:
~ First priority mortgages over the vessels owned by the Company or title of ownership for the vessels under sale and lease
back finance arrangements;
~ First priority assignment of all insurances and earnings of the relevant vessels; and
~ Guarantee from Safe Bulkers in respect of facilities entered into by the Subsidiaries.
The financing agreements contain debt covenants including restrictions as to changes in management and ownership of the ves-
sels, entering into certain long-term charters, additional indebtedness and mortgaging of vessels without the respective lender’s
prior consent, minimum vessel insurance cover ratio requirements, as well as minimum fair vessel value ratio to outstanding loan
principal requirements (the “Minimum Value Covenant”). The Minimum Value Covenant must not fall below 105%, 112%, 120%
or 135% as the case may be. The borrowers are permitted to pay dividends to their owners as long as no event of default under
the respective loan has occurred or has not been remedied or would occur as a result of the payment of such dividends.
Certain of the financing agreements require the respective borrowers to maintain at all times a minimum balance in each vessel
operating account, from $200 to $500.
The Safe Bulkers facilities and the corporate guarantees of the Company include the following financial covenants:
~ total consolidated liabilities divided by total consolidated assets (based on the market value of all vessels owned or leased
on a finance lease taking into account their employment, and the book value of all other assets), must not exceed 85%
(the “Consolidated Leverage Covenant”);
~ total consolidated assets (based on the market value of all vessels owned or leased on a finance lease taking into ac-
count their employment, and the book value of all other assets) less its total consolidated liabilities must not be less than
$150,000 (the “Net Worth Covenant”);
~ the ratio of EBITDA over consolidated interest expense must not be less than 2.0:1, on a trailing 12 months’ basis (the
“EBITDA Covenant”);
~ a minimum of 30% or 35%, as per the relevant agreement, of its voting and ownership rights shall remain directly or indi-
rectly beneficially owned by the Hajioannou family for the duration of the relevant credit facilities and in the case of one facil-
ity Polys Hajioannou beneficially holds a minimum of 20% of the voting and ownership rights (the “Control Covenant”); and
~ payment of dividends is subject to no event of default having occurred and be continuing or would occur as a result of the
payment of such dividends.
The Minimum Value Covenant, Consolidated Leverage Covenant, EBITDA Covenant, Net Worth Covenant and Control Covenant do
not apply to the Pinewood, Shikokuepta, Agros, Kyotofriendo One, Yasudyo, Shimaeight and Shimasix financing agreements. The
EBITDA Covenant does not apply to the Monagrouli and Shimafive loan facilities. The Minimum Value Covenant does not apply to
the Maxdeka, Shikoku, Shikokutessera, Glovertwo and Maxtessera financing agreements.
As of December 31, 2023, the Company was in compliance with all debt covenants in effect, with respect to its financing facilities.
C. Unsecured Bond
In February 2022, the Company, through its wholly owned subsidiary, Safe Bulkers Participations Plc (the “Issuer”), issued
€100,000,000 of unsecured bonds to investors and listed the bonds on the Athens Exchange (the "Bond"). The Bond matures in
February 2027 and carries a coupon of 2.95%, payable semi-annually. The bond offering was completed on February 11, 2022,
and the trading of the bonds on the Athens Exchange commenced on February 14, 2022.
The Bond can be called in part (pro rata) or in full by the Issuer on any coupon payment date, after the second anniversary and
until six months prior to maturity. If the Bond is redeemed (in part or in full) on i) the 5th and/or 6th coupon payment date, bond-
holders will receive a premium of 1.5% on the nominal amount of the bond redeemed, ii) the 7th and/or 8th coupon payment
date, bondholders will receive a premium of 0.5% on the nominal amount of the bond redeemed; and iii) the 9th coupon payment
date, no premium shall be paid for a redemption. In case there is a material change in the tax treatment of the Bond for the Issuer,
then the Issuer has the right, at any time, to fully prepay the Bond without paying any premium. The Issuer can exercise the early
redemption right in part, one or more times, by prepaying each time a nominal amount of bonds equal to at least €10,000,000,
provided that the remaining nominal amount of the bonds after the early redemption is not lower than €50,000,000.
As of December 31, 2023, the outstanding balance of the Bond amounted to $110,364. The fair value of the Bond determined
through Level 1 of the fair value hierarchy as at December 31, 2023, amounted to €93,999,000 or $103,741.
The Bond includes the following financial covenants for the Company:
~ total consolidated liabilities divided by total consolidated assets (based on the market value of all vessels owned or leased
on a finance lease taking into account their employment, and the book value of all other assets), must not exceed 85%;
~ total consolidated assets (based on the market value of all vessels owned or leased on a finance lease taking into ac-
count their employment, and the book value of all other assets) less its total consolidated liabilities must not be less than
$150,000;
~ the ratio of EBITDA over consolidated interest expense must not be less than 2.0:1, on a trailing 12 months’ basis; and
~ a minimum of 30% of its voting and ownership rights shall remain directly or indirectly beneficially owned by the Hajioan-
nou family for the duration of the Bond.
As of December 31, 2023, the Company was in compliance with all covenants in effect, with respect to the Bond.
The estimated minimum annual principal payments required to be made after December 31, 2023, based on the above credit
facilities, sale and leaseback financings and the Bond are as follows:
To December 31,
2024
2025
2026
2027
2028
2029 and thereafter
Total
$
$
27,156
77,459
66,319
162,158
70,951
111,888
515,931
Total interest incurred on long-term debt for the years ended December 31, 2021, December 31, 2022 and December 31,
2023 amounted to $14,776, $17,651 and $27,285, respectively, which includes interest capitalized of $57, $513 and
$2,578 for the years ended December 31, 2021, December 31, 2022 and December 31, 2023, respectively. The average
interest rate (including the margin in the case of credit facilities and sale and leaseback financings) for all long-term debt during
the years December 31, 2021, December 31, 2022 and December 31, 2023 was 2.642% p.a., 3.255% p.a. and 6.034%
p.a., respectively.
9.Share Capital
As of December 31, 2022 and December 31, 2023, the Company had 200,000,000 shares of authorized common stock of
$0.001 par value, of which 118,868,317 and 111,607,828 were issued and outstanding respectively.
Each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of shareholders.
Subject to preferences that may be applicable to any outstanding shares of preferred stock, holders of shares of common stock
are entitled to receive ratably all dividends, if any, declared by the Company’s board of directors out of funds legally available
for dividends. Upon the Company’s dissolution or liquidation or the sale of all or substantially all of the Company’s assets, after
payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation prefer-
ences, if any, the holders of the common stock will be entitled to receive pro rata the remaining assets available for distribu-
tion. Holders of common stock do not have conversion, redemption or preemptive rights to subscribe to any of the Company’s
securities. All outstanding shares of common stock are fully paid and non-assessable. The rights, preferences and privileges
of holders of common stock are subject to the rights of the holders of any shares of preferred stock which may be issued. The
Company’s common stock is not subject to any sinking fund provisions and no holder of any shares will be required to make
additional contributions of capital with respect to the Company’s shares in the future. There are no provisions in the Company’s
articles of incorporation or bylaws discriminating against a shareholder because of his or her ownership of a particular number
of shares.
As of December 31, 2022 and December 31, 2023, the Company had 20,000,000 shares of authorized preferred stock of
$0.01 par value, of which 804,950 and 804,950 Series C Cumulative Redeemable Perpetual Preferred Shares (the “Series
C Preferred Shares”), respectively, and 3,195,050 and 3,195,050 Series D Cumulative Redeemable Perpetual Preferred
Shares (the “Series D Preferred Shares” and, together with the Series C Preferred Shares, the “Preferred Shares”), respec-
tively, were issued and outstanding, respectively. In addition, one million shares have been designated Series A Participating
Preferred Stock in connection with our adoption of a shareholder rights plan.
Holders of Preferred Shares have no voting rights other than the ability (voting together as a class with all other classes or
series of preferred stock upon which like voting rights have been conferred and are exercisable, including all of the Preferred
Shares), subject to certain exceptions, to elect one director if dividends for six quarterly dividend periods (whether or not
consecutive) payable on the Company’s Preferred Shares are in arrears and certain other limited protective voting rights. The
Company’s Preferred Shares are subordinate to all of existing and future indebtedness.
Common stock
In August 2020, the Company filed a prospectus supplement with the Securities and Exchange Commission, under which it
may offer and sell shares of its common stock from time to time up to aggregate net offering proceeds of $23,500 through an
“at-the-market” equity offering program (the “ATM Program”). In May 2021, the Company filed an addendum to the August
2020 prospectus supplement and increased its net offering proceeds to $100,000. The ATM Program was terminated in May
2023, upon when the Company had offered to sell and had sold 19,417,280 shares and had received aggregate net offering
proceeds of $71,537 under the ATM Program.
In June 2022, the Company implemented a new program for the repurchase of an amount of up to 5,000,000 shares of its
SAFEBULKERS
F24
common stock. In March 2023, the Company announced an increase of the June 2022 share repurchase program, authoriz-
ing the Company to purchase up to an aggregate of 10,000,000 shares of the Company’s Common Stock. The program was
completed in May 2023, and an amount of 10,000,000 shares of common stock was repurchased and canceled pursuant to it.
In May 2023, the Company announced a new program for the repurchase of up to 5,000,000 shares of its Common Stock. In July
2023, the Company terminated the program, having repurchased and canceled an amount of 139,891 shares of common stock.
In November 2023, the Company authorized a program under which it may from time to time purchase up to 5,000,000
shares of its common stock. As of February 16, 2024, the Company had not purchased any shares of common stock under the
aforementioned program.
Purchases under all previously announced repurchase programs were made in the open market and in compliance with appli-
cable laws and regulations.
Pursuant to arrangements approved by the Company’s shareholders and the nominating and compensation committee, effec-
tive July 1, 2008, in respect of the audit committee chairman and effective January 1, 2010, in respect of the other inde-
pendent directors of the Company, every quarter the audit committee chairman receives the equivalent of $15 and the other
independent directors each receive the equivalent of $7.50, all payable in arrears in the form of newly issued Company com-
mon stock as part compensation for services rendered as audit committee chairman and independent directors, respectively.
The number of shares to be issued is determined based on the closing price of the Company’s common stock on the last trading
day prior to the end of each quarter in which services were provided and the shares are issued as soon as practicable following
the end of the quarter. During the years ended December 31, 2021, December 31, 2022 and December 31, 2023, 24,483
shares, 17,448 shares and 18,487 shares, respectively, were issued to the audit committee chairman and 24,482 shares,
17,448 shares and 23,497 shares, respectively, were issued in aggregate to the other independent directors of the Company.
Preferred stock
In May 2014, the Company successfully completed a public offering, whereby 2,300,000 shares of Series C Preferred shares
were issued and sold at a price of $25.00 per share. The net proceeds of the public offering and the private placement were
$55,504, net of underwriting discount of $1,744 and offering expenses of $252. The Series C Preferred Shares were issued
for cash and pay cumulative quarterly dividends at a rate of 8% per annum from their date of issuance, i.e. $2.00 per preferred
share. The declaration of such dividend is subject to the discretion of the Company’s board of directors. At any time on or after
May 31, 2019, the Series C Preferred Shares may be redeemed, at the option of the Company, in whole or in part at a redemp-
tion price of $25.00 per share plus unpaid dividends. The Series C Preferred Shares are not convertible into common stock and
are not redeemable at the option of the holder.
In June 2014, the Company successfully completed a public offering, whereby 3,200,000 shares of Series D Preferred Shares
were issued and sold at a price of $25.00 per share. The net proceeds of the public offering and the private placement were
$77,420 net of underwriting discount of $2,369 and offering expenses of $211. The Series D Preferred Shares were issued
for cash and pay cumulative quarterly dividends at a rate of 8% per annum from their date of issuance, i.e., $2.00 per pre-
ferred share. The declaration of such dividend is subject to the discretion of the Company’s board of directors. At any time on
or after June 30, 2019, the Series D Preferred Shares may be redeemed, at the option of the Company, in whole or in part at
a redemption price of $25.00 per share plus unpaid dividends. The Series D Preferred Shares are not convertible into common
stock and are not redeemable at the option of the holder.
In March 2022, the Company issued a notice of redemption of 1,492,554 of the outstanding Series C Preferred Shares. The
redemption was completed on April 29, 2022, at a redemption price of $25.00 per Series C Preferred Share in the amount of
$37,314 plus all accumulated and unpaid dividends to, but excluding, the redemption date, of $738. Following the redemption,
there were 804,950 Series C Preferred Shares outstanding, as of December 31, 2023.
The payment due upon liquidation to holders of any series of the Company’s preferred shares is fixed at the redemption prefer-
ence of $25.00 per share plus accumulated and unpaid dividends to the date of liquidation. The liquidation price of the Series
C Preferred Shares and Series D Preferred Shares as of December 31, 2023 was $20,405 and $80,995, respectively.
10. Mezzanine Equity
Mezzanine equity represents the USD equivalent of 100 shares of Series A Cumulative Redeemable Perpetual Preferred Stock
(the "Series A Preferred Shares") of our subsidiary Pinewood issued in June 2018 to an unaffiliated third party investor (the
"Investor") in the amount of JPY1,854,900,000 plus accrued dividend. These shares were issued as partial payment for the
cost of the vessel Pedhoulas Cedrus owned by Pinewood. The Investor was entitled to a dividend of 2.95% p.a. from these
shares.
In February 2021, Pinewood, after giving due notification, exercised its option and redeemed all Series A Preferred Shares,
paying at the time to the Investor a liquidation price of JPY1,854,900,000, equivalent to $17,707 and accumulated divi-
dends of JPY8,395,328 equivalent to $79 up to the date of liquidation.
11. Commitments and Contingencies
(a) Capital expenditure commitments relating to our vessels and vessels under construction are as follows:
ANNUAL REPORT 2023
Year Ended December 31,
2024
2025
2026
2027
Total
Due to Ship-
yards/Sellers
79,984
$
$
Due
to Manager
1,834
$
Other
Commitments
481
$
50,657
58,844
27,098
1,544
1,930
725
—
—
—
F25
Total
82,299
52,201
60,774
27,823
$
216,583
$
6,033
$
481
$
223,097
Other commitments represent contracted costs related to the purchase of a Scrubber to be installed on a fleet vessel.
(b) Other contingent liabilities
The Company and its Subsidiaries have not been involved in any legal proceedings that may have, or have had, a significant effect
on their business, financial position, results of operations or liquidity, nor is the Company aware of any proceedings that are pend-
ing or threatened that may have a significant effect on its business, financial position, results of operations or liquidity. From time
to time various claims, suits and complaints, including those involving government regulations and product liability, arise in the
ordinary course of the shipping business. In addition, losses may arise from disputes with charterers, agents, shipyards, insurance
providers and other claims relating to the operation of the Company’s vessels. Management is not aware of any material claims or
contingent liabilities which should be disclosed, or for which a provision should be established in the accompanying consolidated
financial statements.
The Company accrues for the cost of environmental liabilities when management becomes aware that a liability is probable and
is able to reasonably estimate the probable exposure. Management is not aware of any such claims or contingent liabilities which
should be disclosed, or for which a provision should be established in the accompanying consolidated financial statements. A
maximum of $1,000,000 of the liabilities associated with the individual vessel actions, mainly for sea pollution, is covered by
P&I Club insurance.
12. Revenues
Revenues are comprised of the following:
Time charter revenue
Voyage charter revenue
Other income
Total
Year Ended December 31
2021
2022
2023
$
328,905
$
351,006
$
290,440
5,578
8,992
—
13,044
—
4,953
$
343,475
$
364,050
$
295,393
The Company generates its revenues from time charters or infrequently under voyage contracts.
Time charter agreements may have renewal options for one month to three years. The time charter party generally provides typi-
cal warranties regarding the speed and the performance of the vessel as well as some owner protective restrictions such that the
vessel is sent only to safe ports by the charterer, subject always to compliance with applicable sanction laws, and carry only lawful
and non-hazardous cargo. The Company typically enters into time charters ranging from one month to five years and in isolated
cases on longer terms depending on market conditions. The charterer has the full discretion over the ports visited, shipping routes
and vessel speed, subject only to the owner protective restrictions discussed above.
Vessels may also be chartered under voyage charters, where a contract is made for the use of a vessel under which the Company
is paid freight on the basis of moving cargo from a loading port to a discharge port. A significant portion of the voyage hire is typi-
cally paid upon initiation of the voyage and the remainder upon completion of the performance obligation.
During the years ended December 31, 2021, 2022 and 2023, the Company generated revenue from its time charters of
$328,905, $351,006 and $290,440, respectively. Scrubber -fitted vessels are able to earn a premium attributable to the use
of the scrubbers installed on board the vessels, to reduce the sulfur content of fuels in compliance to legislation effective January
1, 2020. This premium may be fixed as part of the daily charter rate or may vary based on actual consumption, such variable con-
sideration amounted to $13,710, $29,628 and $34,623 and is included in time charter revenue for the years ended December
31, 2021, 2022 and 2023, respectively.
As of December 31, 2023, the time charters under which the Company vessels were employed had remaining term ranging from
less than one month to twelve months based on the minimum duration of the contracts, excluding twelve vessels, one of which
was employed under a time charter for an original duration of two years, four of which were employed under time charters for an
original duration of three years, six of which were employed under time charters for an original duration of five years and one ves-
sel which was on long term time charter for a period of twenty years, with a remaining tenor ranging between one to eight years.
SAFEBULKERS
F26
ANNUAL REPORT 2023
F27
As of December 31, 2023, December 31, 2022 and December 31, 2021 no vessel was employed under a voyage charter. All
voyage charters during the year ended December 31, 2021 ended in the same period.
Derivatives not designated as hedging instruments
13. Vessel Operating Expenses
Vessel operating expenses are comprised of the following:
Crew wages and related costs
$
36,821
$
38,083
$
Year Ended December 31,
2021
2022
Insurance
Repairs, maintenance and drydocking costs
Spares, stores and provisions
Lubricants
Taxes
Miscellaneous
Total
3,601
8,797
15,473
3,846
690
2,821
4,749
12,148
16,623
5,068
674
2,866
2023
39,473
5,263
16,354
18,738
5,479
606
3,288
$
72,049
$
80,211
$
89,201
14. Fair Value of Financial Instruments and Derivatives Instruments
Cash and cash equivalents and restricted cash and interest rate, foreign exchange forward contracts, bunker price and freight
derivatives are recorded at fair value. The carrying values of the current financial assets and current financial liabilities are rea-
sonable estimates of their fair value due to the short-term nature of these financial instruments. Cash and cash equivalents and
restricted cash are considered Level 1 items as they represent liquid assets with short-term maturities. The fair values of the
variable interest long-term debt approximate the recorded values, due to their variable interest rates. The fair value of the fixed in-
terest long-term debt is estimated using prevailing market rates as of the period end. The Company believes the terms of its loans
are similar to those that could be procured as of December 31, 2023. The fair value of the long-term debt is disclosed in Note 8.
Derivative instruments
Interest rate swaps
The Company from time to time enters into interest rate derivative contracts to manage interest costs and risk associated with
changing interest rates with respect to its variable interest loans and credit facilities. During the year ended December 31, 2023
the Company or its Subsidiaries entered into certain interest rate derivative contracts which were all terminated during the same
year. As a result there were no interest rate derivative contracts outstanding as of December 31, 2023. There were no interest
rate derivative contracts outstanding as of December 31, 2022.
Foreign Exchange Forward Contracts
The Company from time to time may enter into foreign exchange forward contracts to create economic hedges for its exposure
to currency exchange risk on payments relating to capital expenditure obligations, the redemption of the Bond or for trading
purposes. Foreign exchange forward contracts are agreements entered into with a bank to exchange, at a specified future date,
currencies of different countries at a specific rate. As of December 31, 2023, the Company had five outstanding derivative instru-
ments relating to currency exchange contracts for an aggregate amount of €45,000,000 or $48,917, with maturity in Novem-
ber 2026. As of December 31, 2022, the Company had four outstanding derivative instruments relating to currency exchange
contracts for an aggregate amount of €40,000,000 or $43,384, with maturity in November 2026.
Bunker Fuel Contracts
During the years ended December 31, 2022 and December 31, 2023, the Company entered into a certain number of contracts
to buy or sell the spread differential between the price per ton of the 0.5% and 3.5% sulfur content fuel with the objective of
reducing the risk arising from lower spread differential, which affects the additional revenue from the operation of Scrubbers in
scrubber-fitted vessels.
Forward Freight Agreements (“FFA”)
During the years ended December 31, 2022 and December 31, 2023, the Company entered into a certain number of FFA on the
Panamax and Capesize index maturing in 2022, 2023 and 2024 with the objective of reducing the risk arising from the volatility
in the vessel charter rates.
The Company’s interest rate agreements, foreign exchange forward contracts, bunker fuel contracts and FFA do not qualify for
hedge accounting. The Company determines the fair market value of such derivative contracts at the end of every period and ac-
cordingly records the resulting unrealized loss/gain during the period in the consolidated statement of income.
Information on the location and amounts of derivative fair values in the consolidated balance sheets and derivative gains/losses
in the consolidated statements of income are shown below:
Asset Derivatives
Fair Values
Liability Derivatives
Fair Values
Type of
Contract
Balance sheet location
December
31, 2022
December
31, 2023
December
31, 2022
December
31, 2023
Bunker Fuel
Derivative assets/ Current assets
$
343 $
Forward Freight
Derivative assets/ Current assets
755
— $
8
Foreign Currency
Derivative assets / Non-current assets
1,156
2,669
Bunker Fuel
Derivative liabilities / Current liabilities
Forward Freight
Derivative liabilities / Current liabilities
Foreign Currency
Derivative liabilities / Non-current liabilities
—
—
—
—
—
—
— $
—
—
—
—
307
—
—
—
292
234
—
Total Derivatives
$
2,254 $
2,677 $
307 $
526
Forward Freight
Foreign Currency
Interest Rate Contracts
Bunker Fuel Contracts
Net Gain Recognized
Amount of Gain Recognized on Derivatives
Year ended December 31,
2021
2022
(3,227) $
7,066 $
(99)
6,474
(960)
862
5,327
(4,532)
2,188 $
8,723 $
2023
(1,681)
1,819
338
47
523
$
$
The gain or loss is recognized in the consolidated statement of income and is presented in Other (Expense)/Income – Gain/(Loss)
on derivatives.
The Company’s interest rate derivative instruments are pay-fixed, receive-variable interest rate swaps based on the USD SOFR
swap rate. The fair value of the interest rate swaps is determined using a discounted cash flow approach based on expected for-
ward SOFR swap yield curves and take into account the credit risk of the counterparty financial institutions. SOFR swap rates are
observable at commonly quoted intervals for the full terms of the swaps and therefore are considered Level 2 items in accordance
with the fair value hierarchy. Differences in prices are observable at commonly quoted intervals for the full terms of the swaps and
therefore are considered Level 2 items in accordance with the fair value hierarchy.
The Company’s foreign exchange forward derivative instruments are agreements entered into with a bank to exchange, at a
specified future date, currencies of different countries at a specific rate. The fair value of the foreign exchange forward derivative
instruments is determined using mid-rates based on available market rates at the time of the valuation and take into account the
credit risk of the counterparty financial institutions. Foreign exchange prices are observable at commonly quoted intervals for the
full terms of the foreign exchange forward derivative instruments and therefore are considered Level 2 items in accordance with
the fair value hierarchy.
The Company’s FFA derivative instruments were receive-fixed, pay-variable swaps based on the earnings of the Panamax class
dry bulk vessels as published by the Baltic Exchange. The fair value of the FFA derivatives is determined using a discounted cash
flow approach based on the market rate of such earnings at the time of such valuation and take into account the credit risk of the
counterparty financial institutions. Differences in prices are observable at commonly quoted intervals for the full terms of the
FFAs and therefore are considered Level 2 items in accordance with the fair value hierarchy.
The Company’s bunker fuel derivative instruments were receive-fixed, pay-variable swaps based on the difference in price be-
tween various categories of bunker fuels. The fair value of the bunker fuel swaps is determined using a discounted cash flow ap-
proach based on the difference on the market rate of each bunker fuel price at the time of such valuation and take into account the
credit risk of the counterparty financial institutions. Differences in prices are observable at commonly quoted intervals for the full
terms of the swaps and therefore are considered Level 2 items in accordance with the fair value hierarchy.
The following table summarizes the valuation of the Company’s financial instruments as of December 31, 2022 and December
31, 2023.
SAFEBULKERS
F28
ANNUAL REPORT 2023
F29
Derivative instruments – asset position
Derivative instruments – liability position
15. Accrued Liabilities
Accrued liabilities are comprised of the following:
Interest on long-term debt
Vessels’ operating and voyage expenses
Commissions
Interest on derivatives and other finance expenses
General and administrative expenses
Total
$
$
$
Significant Other Observable Inputs
(Level 2)
December 31, 2022
December 31, 2023
2,254
$
307
2,677
526
December 31,
2022
2,235
$
7,305
464
635
127
10,766
$
2023
2,910
3,413
512
1,316
232
8,383
16. Future Minimum Time Charter Revenue
The future minimum time charter revenue, net of commissions, based on existing vessels committed to non-cancellable period
time charter contracts (including fixture recaps) which includes contracted revenue linked to the BPI and BCI index calculated as
of December 31, 2023, is as follows:
December 31,
2024
2025
2026
2027
2028
Thereafter
Total
$
$
134,338
56,648
21,398
10,845
9,252
23,005
255,486
Revenues from time charters are not generally received when a vessel is off-hire, including time required for normal periodic
maintenance. In arriving at the minimum future charter revenues, an estimated off-hire time has been deducted, although such
estimate may not be reflective of the actual off-hire in the future.
17. General and Administrative Expenses
General and administrative expenses include management fees payable to our Managers and costs in relation to the administra-
tion of our Company. General and administrative expenses for the years ended December 31, 2021, December 31, 2022 and
December 31, 2023 were as follows:
Management fees – related parties
Professional fees (legal and accounting)
Directors fees and expenses
Listing fees and expenses
Miscellaneous
Total
December 31,
2021
2022
$
19,221
$
17,723
$
854
759
101
1,563
1,023
802
181
2,073
$
22,498
$
21,802
$
2023
19,199
1,070
781
128
2,585
23,763
18. Unearned Revenue/Accrued Revenue
Unearned Revenue represents cash received in advance of it being earned, whereas Accrued Revenue represents revenue earned
prior to cash being received. Revenue is recognized as earned on a straight-line basis at their average rates when charter agree-
ments provide for varying annual charter rates over their term. Total Unearned Revenue/Accrued Revenue during the periods
presented is as follows:
Unearned Revenue
Cash received in advance of service provided – Current liability
Deferred revenue resulting from varying charter rates – Current liability
Deferred revenue resulting from varying charter rates – Non-Current liability
Total Unearned Revenue
Accrued Revenue
Resulting from varying charter rates – Current asset
Resulting from varying charter rates – Non-Current asset
Total Accrued Revenue
$
$
$
December 31,
2022
5,290
$
4,230
7,330
2023
6,682
4,171
3,248
16,850
$
14,101
662
225
887
$
477
87
564
19. Gain on Sale of Assets
Gain on Sale of Assets represents net gains from the sale of seven vessels concluded during the year ended December 31, 2021
and three vessels during the year ended December 31, 2023. No vessels were sold during the year ended December 31, 2022.
Summary of the transactions is presented in the table below:
Years Ended December 31,
2021
2022
$
11,579
— $
2023
10,375
Built
Gross sale price
Gain/(loss)
Gain on sale of assets
Vessel name
Paraskevi
Vassos
Pedhoulas Builder
Pedhoulas Farmer
Maria
Koulitsa
Type
Panamax
Panamax
Kamsarmax
Kamsarmax
Panamax
Panamax
Pedhoulas Fighter
Kamsarmax
Total gain in 2021
2003
2004
2012
2012
2003
2003
2012
7,300
8,650
22,500
22,000
12,000
13,600
23,700
Vessel name
Type
Built
Gross sale price
Pedhoulas Trader
Kamsarmax
Efrossini
Katerina
Total gain in 2023
Panamax
Panamax
2006
2012
2004
15,900
22,500
10,200
Delivery to new
owners
April 2021
May 2021
June 2021
(551)
(1,074)
(1,775)
189
September 2021
3,843
5,748
5,199
September 2021
November 2021
November 2021
$
11,579
Gain
4,637
3,316
2,422
Delivery to new
owners
January 2023
July 2023
December 2023
$
10,375
20. Early Redelivery Income, net
Early redelivery income of $7,470 for the year ended December 31, 2021 mainly relates to the cash compensation of $7,990
less accrued revenue of $435, received by the Company for the early termination requested by the charterer of the period time
charter of the vessel Lake Despina, which was contractually due to expire in January 2024.
21.Dividends
During 2022, the Company declared and paid four quarterly consecutive dividends of $0.05 per common share totaling $24,142.
During 2023, the Company declared and paid four quarterly consecutive dividends of $0.05 per common share totaling $22,678.
SAFEBULKERS
F30
ANNUAL REPORT 2023
F31
During 2021, the Company declared and paid four quarterly consecutive dividends of $0.50 per share of Series C Preferred
Shares, totaling $4,595, and four quarterly consecutive dividends of $0.50 per share of Series D Preferred Shares, totaling
$6,390. During 2022, the Company declared and paid four quarterly consecutive dividends of $0.50 per share of Series C
Preferred Shares, totaling $2,356, and four quarterly consecutive dividends of $0.50 per share of Series D Preferred Shares,
totaling $6,390. During 2023, the Company declared and paid four quarterly consecutive dividends of $0.50 per share of Series
C Preferred Shares, totaling $1,610, and four quarterly consecutive dividends of $0.50 per share of Series D Preferred Shares,
totaling $6,390.
During February 2021, Pinewood delivered a notice of redemption for all issued and outstanding Series A Preferred Shares,
recorded as mezzanine equity (the "Mezzanine Equity"). Pinewood declared and paid a final preferred dividend totaling
JPY8,395,328.00 equivalent to $79 comprised of a final dividend of JPY83,953.28 per share equivalent to $791.23 per
share of Series A Preferred Shares for the period from January 1, 2021 to February 25, 2021.
22. Earnings Per Share
Diluted earnings per share are the same as basic earnings per share. There are no other potentially dilutive shares. The computa-
tion of basic earnings per share is presented as follows:
Net income
Less preferred dividend attributable to preferred shareholders
(Plus) Mezzanine equity measurement
Net income available to common shareholders
Weighted average number of shares, basic and diluted
Earnings per share in U.S. Dollars, basic and diluted
December 31,
2021
2022
174,348 $
172,554 $
11,064
(271)
8,978
—
2023
77,351
8,000
—
163,555 $
163,576 $
69,351
113,716,354
120,653,507
113,619,092
1.44 $
1.36 $
0.61
$
$
$
23.Subsequent Events
(a) Dividend declaration - preferred stock Series C and Series D: In January 2024, the board of directors declared a dividend
of $0.50 per share of all classes of preferred shares, totaling $2,000, payable to all shareholders of record as of January 19,
2024, which was paid on January 30, 2024.
(b) Newbuild deliveries: In January 2024, Shimasix took delivery of the newbuild Kamsarmax class Ammoxostos, and Shima-
seven took delivery of the newbuild Kamsarmax class Kerynia.
(c) Newbuild acquisition: In January 2024, Shimaeleven entered into a contract for the construction and acquisition of a new-
build Kamsarmax class vessel scheduled for delivery in 2026.
(d) Dividend declaration - common stock: In February 2024, the board of directors declared a dividend of $0.05 per share of
common stock, totaling $5,581 payable to all shareholders of record of the Company's common stock at the closing of trading on
March 1, 2024 which will be paid on March 19, 2024.
(e) Vessel sale: In February 2024, Youngone delivered the vessel Pedhoulas Cherry to the third-party buyers.
(f) Vessel sale: In February 2024, the Company entered into an agreement for the sale of the vessel Maritsa, a 2005 Japanese-
built, Panamax class dry-bulk vessel, at a gross sale price of $12,200. The vessel is scheduled to be delivered to her new owners
in April or May 2024.
Stock Listing
Safe Bulkers’ common
stock is traded on the
New York Stock
Exchange under the
ticker symbol “SB”.
Board of Directors and
Management
Polys Hajioannou
Chief Executive Officer,
Chairman and Director
Dr. Loukas Barmparis
President, Secretary and Director
Konstantinos Adamopoulos
Chief Financial Officer,
Treasurer and Director
Ioannis Foteinos
Chief Operating Officer and Director
Frank Sica
Director
Ole Wikborg
Director
Christos Megalou
Director
Kristin H. Holth
Director
Marina Hajioannou
Director
Principal Executive office
Safe Bulkers, Inc.
Apt. D11, Les Acanthes
6, Avenue des Citronniers
MC98000, Monaco
Contact Details
Tel: +30 2 111 888-400
+357 25 887-200
E-mail: directors@safebulkers.com
Website
Information about Safe Bulkers’ fleet,
as well as corporate investor informa-
tion, press releases, stock quotes, and
SEC filings may be obtained through
our website at www.safebulkers.com
Transfer Agent and Registrar
American Stock Transfer &
Trust Company
6201 15th Avenue, Brooklyn,
NY 11219
Tel: +1 (718) 9218210
Legal Counsel - Capital Markets
Cadwalader, Wickersham & Taft
200 Liberty Street
New York, NY 10281
Tel: +1 (212) 504 6000
Independent Auditors
Deloitte Certified Public Accountants S.A.
Fragoklissias 3a & Granikou str.,
Marousi 151 25
Athens, Greece
Tel: + 30 (210) 678-1100
Investor Relations/Media Contact
Nicolas Bornozis, President
Capital Link, Inc.
230 Park Avenue, Suite 1536
New York, N.Y. 10169
Tel.: (212) 661-7566
Fax: (212) 661-7526
E-Mail: safebulkers@capitallink.com
Corporate directory
Principal Executive office
Apt. D11, Les Acanthes
6, Avenue des Citronniers
MC98000, Monaco
www. safebulkers.com
This annual report is printed on HOLMENBOOK paper 80gr
and complies to the following certifications.
SS 627750 AND EN 16001 are the Swedish and European standards
for the introduction of energy management systems.
FSC® – Forest Stewardship Council® is a system for the certifcation
of forestry that is supported by several environmental organisations.
PEFC – Programme for the Endorsement of Forest Certifcation
schemes is an international system for forest certifcation.