Spyros Capralos - President, CEO and Director Simos Spyrou - CFO

Ben Nolan - Stifel Financial Harsha Gowda - BlueShore Jonas Kraft - Pareto Securities

Thank you for standing by, ladies and gentlemen and welcome to the Star Bulk Conference Call on the First Quarter 2014 Financial Results. We have with us Mr. Spyros Capralos, President and Chief Executive Officer and Mr. Simos Spyrou, Chief Financial Officer of the Company. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. (Operator Instructions) I must advise you this conference is being recorded today on Thursday, May 29, 2014. We now pass the floor to one of your speakers today, Mr. Spyros Capralos. Please go ahead, sir.

Thank you, Operator. I’m Spyros Capralos, President and Chief Executive Officer of Star Bulk Carriers, and I would like to welcome you to the Star Bulk Carriers’ first quarter 2014 financial results conference call. Along with me today to discuss our financial results is our CFO, Mr. Simos Spyrou. Before we begin, I kindly ask you to take a moment to read the Safe Harbor statement on Slide Number 2 of our presentation. Since you are all quick readers now that we’re done with Slide Number 2, I would like to summarize our business strategy as presented on Slide Number 4. Star Bulk is executing an aggressive fleet expansion and renewal strategy with 11 fuel efficient newbuildings from top-class yards as well as opportunistic acquisitions of premium second-hand tonnage. Having invested at essentially the bottom of the cycle we secured compelling delivery slots in 2015 and early 2016 now worth $80 million above their contract costs. Our commercial strategy allows us to maintain spot market exposure taking advantage in the future of a market recovery and of the savings from our fuel efficient new buildings. We have diversified the composition of our fleet by weighing more on larger vessels that will benefit mostly from a broad market recovery due to the economies of scale they offer on a freight per tonne basis and the increasing long-haul shipments. On a fully deployed basis we will own 12 Capesizes and Newcastlemax vessels out of a fleet of 28 vessels in total. Furthermore, we have leveraged our sponsor’s vast experience in shipping, involving acquiring, operating and successfully disposing vessels along various stages of the shipping cycle. The benefits of the above spend across various areas from maxes to first year’s shipyards to long-term relationships with charters and brokers. Finally, despite being in a growth mode, we remain committed to the cornerstone of our goals that is maximizing total return for our shareholders. As our fleet expands and the drybulk market recovery is established, we will evaluate favorably the potential return of capital to our shareholders in a manner of consistent with our overall business strategy, cash flows and liquidity positions. Please turn now to Slide Number 5 for a brief review of our recent key corporate developments during this quarter. On a corporate level as we have previously announced we acquired 33% of the share capital of Interchart Shipping in exchange for $200,000 in cash and 22,598 shares in Star Bulk. Interchart serves as our chartering broker, so we simultaneously entered the service agreement whereby chartering services will be provided for a fixed scalable fee initially set at 685,000 per annum versus the previous variable compensation model of 1.25% on our gross rate revenues. This acquisition provides us with operational control as well as significant cost savings in the future. On the operational side we have taken delivery of our two last vessels acquired, Star Vega and Star Sirius in February and March respectively. Upon their delivery both vessels assume their long-term charter with the Glocal Maritime at $15,000 per day until mid-2016. One of our Supermax vessels Star Epsilon underwent its periodic drydocking from the middle of March until early April. On the financing side, during the first quarter of 2014 we have drawn a total of 74 million related to two previously announced facilities with HSH and Deutsche Bank so as to finance the four second-hand vessels acquired. Finally we have entered into a swap arrangement so as to mitigate our floating interest rate exposure in the future. Specifically we have hedged forward 50% of the new debt facility of HSH starting September 30, 2014 for a period of four years at a fixed rate of 1.765% per annum, with few days as the necessary, given the anticipated U.S. interest rate tightening. Currently, approximately 30% of our interest rate exposure in 2015 is hedged at an average fixed rate of 1.7%. Overall, as you can see we have been continuing the implementation of our stated strategy with 28 vessel fleet on a fully deployed basis and by consolidating our resources and optimizing our capital structure and financing costs we are clearly well positioned to benefit from the attracting fundamentals of the dry bulk market. And now I’ll ask Mr. Simos Spyrou, our CFO, to give you an update on the financial results. Please go ahead Simos.

Thank you, Spyros. Let us now turn to Slide Number 7 of the presentation for a preview of our first quarter of 2014 financial highlights in comparison to last year’s respective quarter. In the three months ended March 31, 2014, net revenues amounted to 90.3 million, 11% increase versus respective figures during the first quarter of 2013. Net revenues represent our total revenues adjusted for non-cash items less voyage expenses. The reason we refer to our net revenues is because this figure nets out any difference in the number of voyage charters we performed in each period and therefore it’s directly comparable to other periods. The increase in our net revenues is attributed mainly to the addition of the Post-Panamax vessels in our fleet as well as the increase in the management fee income earned. Adjusted EBITDA for the first quarter of 2014 was 7.8 million, decreased by 10.7% versus last year’s respective figure. The decrease is attributed to the higher drydocking expenses which amounted to $700,000 this quarter versus $200,000 during the first quarter of 2013 whereby no vessel was drydocked. Furthermore prior year’s quarterly figure also incorporated an amount of 700,000 of net operational gain which was related to claim settlement payments which is not recurring this quarter. Overall, during the first quarter of 2014, the Company had a net loss of $900,000 compared to a net profit of 1.2 million in the first quarter of 2013. Excluding non-cash items, our adjusted net income for the first quarter amounted to 1.7 million gain, compared to an adjusted net income of 2.8 million in the first quarter of 2013. Our time charter equivalent rate during this quarter was $14,343 per day per vessel essentially in line with the $14,316 per day per vessel related to the pre-delivery expenses for the four second-hand vessels acquired the average daily operating expenses in the first quarter of 2014 were $5,342 per vessel versus $5,531 per vessel during the same quarter last year representing an 3.4 decrease year-on-year. The adjusted net income of 1.7 million represents an adjusted EPS of $0.06 per share versus an adjusted net income of $0.51 per share during the respective period in 2013. However, I would like to note that this substantial decrease in the earnings per share is mostly attributed to the increase in the weighted average number of shares outstanding from 5.4 million to 28.8 million during the first quarter of 2014 so as to account for the two equity offerings conducted in the second half of 2013. Please turn now to Slide 8 to discuss our balance sheet profile. Currently, our total debt stands at 255.1 million, our total cash position at 57.8 million and our net debt at 197.3 million. Furthermore the market value for our fleet in the water stands currently at 420.5 million. In addition our 11 newbuildings currently work 562.8 million, 80 million or 16% above their contracted price, bringing our fully delivered fleet value close to 1 billion. We have paid 79.8 million in the form of advanced payments for the 11 vessels on order so far. Taking all the above into account we calculate our NAV per share on a charter free basis at $13 per share, a level at which our current stock price implies a 16% discount. Going forward as you can see from the bottom left graph our principle repayment so far this year stands at 9.2 million while our remaining scheduled principle repayments for 2014 and 2015 stand at 13.2 million and 34 million respectively. As it is evident from the graph in the right bottom assuming 60% debt financing we essentially have no remaining equity CapEx payment for 2014 while for 2015 and 2016 the respective obligation stands at 77.2 million and 15.7 million respectively. So overall we have a smooth debt repayment profile over the next two years while our remaining CapEx obligation are tail heavy providing us substantial flexibility in managing our cash flows. I would like now to pass the floor back to Spyros so as to provide you with an update with our fleet strategic operational and commercial developments.

Thank you, Simos. Slide 10, gives you a brief review of our fleet profile. We currently own 17 drybulk vessels, five of them are Capesizes, two Post-Panamaxes, two Ultramaxes and eight Supramaxes with a total deadweight capacity of 1.6 million deadweight tonnes and an average age of about 9 years. We have in addition a newbuilding program consisting of 11 fuel-efficient eco-friendly vessels under order in first class shipyards consisting of five Newcastlemaxes, two Capesizes and four Ultramaxes, with delivery spanning between 2015 and early 2016. Upon full delivery of our newbuildings we will own a total of 28 vessels from 17 vessels a day. The fleet is managed internally, which provides full efficiency and transparency to our shareholders. Aside from the management of our own fleet we also provide ship management services today to 14 third-party vessels for a daily fee of $750 per day. On the bottom left graph you can see that upon completion of our newbuilding program we’ll have grown our total fleet under management to more than 8 million deadweight tonnes representing a 35% compounded annual rate of growth on deadweight basis from 2009. Please turn to Slide 11, to discuss commercial performance. Since 2009 both Capesize and Supramax vessels have outperformed the market. Specifically our Capesize fleet has outperformed the Baltic Capesize index by 61% on average during this period. During Q1 2014 our Capesize vessels earned an average daily TCE of $23,108, 41% higher than the $16,370 per day that the BCI had averaged over the same period. The performance was positively affected due to a decision we took at the beginning of the year to reposition, Star Polaris and Star Borealis to Brazil. For the latter I would like to note that we have arranged a voyage charter at gross rate, rate of $27.75 per tonne right before the market reversed to today’s levels of about $18 to $19 per tonne. As you can appreciate this difference implies a 1.7 million in additional revenues for this voyage. Our Supramax fleet has also been outperforming the BSI index by 25% on average since 2009. During Q1 2014 Supramax vessels earned an average daily TCE of $10,597, 4% higher than the 10,207 per day that the BSI had average over the same period. This performance includes the results of the two Ultramax vessels that joined our fleet in late 2013. Please turn to Slide 12, for an overview of our fleet employment and our charter counterparties. Currently we have secured 57% of our available days in 2014, 18% in 2015 and 6% in 2016. Specifically our time charter coverage in the Capesizes is 59% for 2014 and 19% for 2015 at an average gross daily rate of $24,019 while our Supramax -- I would have liked it to be a 100 more. While our Supramax coverage stands at 48,000 -- 48% for 2014 at a gross daily rate of $12,736. On Panamaxes we are fully covered for the next two years while we have secured 52% of our available days in 2016 at the previously announced gross charter rate of 15,000 per day. Overall as of today our total contracted revenue amounts approximately 42.3 million equal to an average gross daily fixed rate of $17,143 over an average remaining charter duration of approximately 0.4 years on a fleet-wide basis. As we have stated before our adapted flexible commercial strategy mostly focuses on short-term time charter employment, maintaining increased exposure to a long-term recovering freight rates. This allows us to relatively insulate our fleet for adverse market movements in the short-term while maintaining our upside potential on the firming freight market. Let’s now turn to Slide 13 so as to briefly explain how the increased spot exposure of our fleet is translated into an upside earnings and cash flow potential for our investors. First of all, the current spot exposure of our fleet is considerably expected to increase over the next three years as our 11 fuel-efficient newbuildings are delivered. In particular the 2,549 spot days in 2014, we searched to over 10,000 days upon full delivery of our new buildings. Furthermore our exposure to the larger higher margin vessels will increase as well. We currently have 26% of our spot exposure attributed to Capesize vessels which will increase to 43% on a fully delivered basis, with the addition of our two Capesize and five Newcastlemax newbuildings. So currently for every 10,000 increase in Capesize TCE rates and correlated increases in Panamax and Supramax TCE rates, our EBITDA, free cash flow and earnings for 2014 are increased by 14.3 million. On a per share basis this is equal to $0.49 change in EPS or 4.5% of our stock price. However, the delivery of our 11 newbuildings will result in a respective upside of essentially four times larger than the current one, as the same increase of $10,000 in TCE Capesize rates, will result in an improvement of EBITDA, free cash and earnings of 66.4 million on a fully delivered basis. On a per share basis it’s equal to $2.28 earnings per share or 20% of our stock price. Slide 14, in Slide 14 we’ll try to evaluate our operational performance over the last five years. As a general comment, our cost cutting efforts in our operating and G&A expenses have played an important role in our financial and operating performance in the challenging market environment of the past five years. This of course has been achieved without compromising our high quality and operational standards. On the left graph you can see the evolution of our average daily operating expenses. Since 2009 our daily operating expenses have been reduced from 6,903 to 5,629 the first quarter of 2014, an 18.5% cumulative decrease, furthermore if we adjust the 400,000 of previous years expenses incurred in connection with the four vessels, second-hand vessels acquired, average daily OpEx for the first quarter of 2014 were $5,342 per vessel, 4% reduction versus Q1 2013 respective figures. Our continuous cost efforts are verified if you compare our performance against industry benchmarks, such as the indexes published by Moore Stephens. In particular for 2012 our average daily OpEx per vessel was safely below the respective benchmark OpEx of the industry. While the same applies to our 2013 average daily OpEx per vessel figures, if the guidance provided by Moore Stephens of 3% expected cost increase, is applied to the 2012 OpEx benchmark. On the bottom right graph, you can see the total carrying capacity of our managed fleet versus our G&A expenses which exclude one-off severance payments and stock-based compensation. The G&A expenses are of course reflective of the in-house vessel management capabilities we’ve developed since our inception. As you can see the annualized G&A expenses excluding non-cash items for the first quarter of 2014 are approximately 11.5 million. 38% higher than 2013 while at the same time our total fleet under management for 2014 will be increased by 52% on a deadweight tonnage basis. Moving forward we expect the expanded size of our operating fleet to provide us with further economies of scale and cost synergies to the benefit of both our owned and our managed fleet and clearly to our shareholders. And now I’ll ask again Simos to give you an update of the market developments. Floor is yours again, Simos.

Thank you, Spyros. On Slide 16 we summarize the drybulk trade demand dynamics. First of all let’s talk about iron ore, perhaps the most important commodity in the drybulk shipping space. It is apparent that the international iron ore market will see substantial additional supply coming in from producers that have the ability of predatory pricing in order to capture more international market share. This is expected to drive the international iron ore price to remain at the current low levels, high at approximately $100 per tonne, a level at which the majority of small private Chinese producers are non-competitive. Therefore, we believe that the substitution of the expensive Chinese iron ore production with imported ore can provide a significant support to iron ore trade even with zero steel production growth. Regarding now coal trade, as you can see on the left bottom graph, Chinese coal trade has evolved tremendously for the last eight years. China’s increased energy needs have turned the country from a traditional coal exporter to the single biggest coal importer in the world in half a decade. From significant coal trade surpluses up until 2005, China had a coal trade deficit of around 314 million tonnes during the last 12 months. Similar to China Indian coal imports have increased with a compound annual growth rate of 25% during the period between 2006 and 2012, reaching 157 million tonnes per annum. Going forward, according to Clarksons, India is expected to reach the $191 million tonnes per annum of coal imports in 2014, an increase of 21% versus 2012 levels. Lastly, as the rain season kicks off in the second quarter of 2014, we expect this to provide an additional uplift in Panamax and Supramax freight rates. Grain is a commodity that is carried mostly by Panamaxes and Supramaxes and according to Clarksons, grain exports are expected to increase by 3% this crop season versus 2013 levels due to higher crop yields and production in U.S. and Canada. On Slide Number 17 we’re trying to do an update on the supply side. Drybulk vessel deliveries have peaked in January and March of 2014 and currently stand at 19.4 million deadweight tonnes. This is however expected as ship owners tend to prefer and push for having their vessels delivered on January of the New Year. As you can see on the top-right hand graph, deliveries in the period between 2008 to 2012, have an average slippage rate of around 30%. These respective figures for 2013 was close to 40%, while the annualized year-to-date deliveries imply a 23% slippage rate, substantially decreased and below historical average. Overall, as you can see from the top-right graph, putting the forward scheduled deliveries in this historical context clearly demonstrates that the worst is past due for the drybulk industry. The nominal order book stands at approximately 22% of the fleet, substantially lower from the peak 80% in 2008. Furthermore, if the nominal order book is adjusted for orders originally placed before 2012, it is reduced to a 17%, a level that can be more smoothly digested by the market and in line with historical levels. On the bottom-right-hand graph, we also provide the order book for the remainder of 2014, 2015, and 2016; broken down in vessel classes. At this point in time, we can safely say that the order book for 2014 and 2015 is fixed. Finally, what is important and encouraging is the fact that bulk carrier demolition has stayed at record-high levels the last couple of years. 2013 scrapping activity of 22.2 million deadweight tonnes was very close to the second highest all-time level of 23.2 million deadweight tonnes in 2011. Going forward, and given the firming of freight market, we expect the scrapping activity to be reduced, but still present since 9% of the fleet is above 21 years freight. Please turn now on to Slide 18, to summarize the effect of the above on the future of the drybulk shipping. Overall while the first quarter was seasonally a soft quarter, it has been better than last year, with average spot rates being 56% up versus expected levels in the first quarter of 2013. The current outlook however remains compelling. As the rain season unfolds and iron ore purchasing activity continues its exponential growth, we will enter into a tightened freight rate environment expected to peak towards the end of the year, clearly a catalyst to the strength of the freight rates firming over the next quarters, will be the presence of Brazilian iron ore exports to China while we still have a multiplying effect on the growth of seaborne trade on a tonne per mile basis. Overall, the analyst consensus in the demand growth will outpace supply growth in 2014, while for 2015 this gap is expected to increase even. I would like now to pass the floor back to Spyros for his closing remarks.

Thank you, Simos. In conclusion, we believe that investing in Star Bulk as is depicted in Slide 19, offer certain distinct benefits. First of all, to our flexible charging strategy, our fleet is poised to benefit from the drybulk market recovery, while we do have the financial power to capitalize on any distressed opportunities that might arise. Secondly, our investors get exposure to superior assets with a diverse quality modern fleet, including 11 top-spec active newbuildings ordered at first three yards in Japan and China. Furthermore we focus on what we do best that is owning and operating drybulk vessels while we have diversified our asset base to higher margin vessels such as Newcastlemaxes. Being experienced fleet managers led by Chairman Mr. Pappas we have expanded our shareholder base to our creative institutions such as Oaktree and Monarch clearly a vote of confidence in our transparent and efficient operations. Lastly we posses strong transparent in-house commercial and technical management capabilities of which we take full advantage by managing third-party vessels as well. This activity generates riskless revenue, diversifying our consolidated cash flows. Furthermore, as the size of our operating fleet increases, we enjoy substantial economies of scale and cost synergies, benefiting both, the third-party vessels under management as well as our own vessels equitably. Overall, we believe Star Bulk will be able to favorably compete and ultimately shine and prosper in tomorrow’s drybulk markets. I would like to thank our shareholders for their ongoing support and loyalty and we assure them that we will continue our efforts to ensure the Company’s long-term viability and enhanced shareholder’s value. Without taking any more of your time, I will now pass the floor over to the operator. And in case you have any questions, both Simos and myself, will be very happy to answer them.

Thank you very much sir. (Operator Instructions) And your first question today comes from the line of Ben Nolan from Stifel. Please go ahead. Ben Nolan your line is open, please go ahead.

Yes, thank you guys. My first question has to do with something Spyros that you mentioned you guys are calculating your NAV to be about $13 a share obviously the premium to where the shares are trading at the moment but by the same token you have about $80 million and above market newbuilding contracts. Have you given any thought to the idea of maybe selling more into those to monetize on the difference and both to reduce your CapEx commitments but then also to close the gap between where the share price is trading and net asset value? Stifel Financial: Yes, thank you guys. My first question has to do with something Spyros that you mentioned you guys are calculating your NAV to be about $13 a share obviously the premium to where the shares are trading at the moment but by the same token you have about $80 million and above market newbuilding contracts. Have you given any thought to the idea of maybe selling more into those to monetize on the difference and both to reduce your CapEx commitments but then also to close the gap between where the share price is trading and net asset value?

That’s the only question Ben I can’t replay to Nolan to Ben. Ben, right now we haven’t thought about selling of any of our vessels right now the market after the first quarter that there was a surge in prices right now prices of vessels are in the newbuildings are also in the second-hand vessels are quite softer. And therefore I don’t think that it’s the right time to sell any of the vessels that are under construction. We feel that with the upsurge in at a certain point and the recovery in the charter rates that prices of vessels will also get the benefit from that.

Okay, well that’s helpful. That leads to sort of the next question obviously you don’t many capital commitments on slotting capital commitments this year but they’re starting next year does move up to I think you said $77 million. How are you thinking about funding those commitments? Stifel Financial: Okay, well that’s helpful. That leads to sort of the next question obviously you don’t many capital commitments on slotting capital commitments this year but they’re starting next year does move up to I think you said $77 million. How are you thinking about funding those commitments?

Well, as you said correctly, for this year, there is no capital expenditure commitments now for next year starting in the middle of next year we expect and we have the possibility from now until that time at the certain point when the market is better I think that we’ll have the possibility either to find ways and finance our newbuilding program or raise equity at the certain point. But I think that the commitments that we have are not such huge that could create any difficulties in the Company in raising the money.

Okay. Well, that’s helpful. And then my last question has to do with the G&A, I know that you guys have hired a larger land based office while more employees on the land side to facilitate all of the newbuildings that are coming on and that’s completely understandable. Actually my question now is should we assume that the G&A rate you guys had in the first quarter here is a pretty good run rate for it should be in subsequent quarters? Stifel Financial: Okay. Well, that’s helpful. And then my last question has to do with the G&A, I know that you guys have hired a larger land based office while more employees on the land side to facilitate all of the newbuildings that are coming on and that’s completely understandable. Actually my question now is should we assume that the G&A rate you guys had in the first quarter here is a pretty good run rate for it should be in subsequent quarters?

Ben, I know that G&A is something important for us and we’ve shown commitment to reduce always G&A cost. With the assumption of additional vessels under management, you have to hire people in advance to make sure that those vessels will be properly managed and I think going forward I think the G&A and G&A per vessel will continue coming down, even though in this first quarter, it has come down but not as much as we would like them to come down. We have a goal to have G&A expenses at lower levels than what we currently have. On the previous question also about the raising how we’re going to finance the capital expansion program of course that depends also on the market developments and the charter rates that we’re going to achieve because the company is also generating a nice cash flow from the operation of the existing fleet that we have in the water. Therefore, the higher the charter rates especially because we are mostly spot the more cash we will be generating and then the lower the capital expenditure financing requirements will be.

Okay. Well, that makes sense. And that does it for my questions. I appreciate it guys. Stifel Financial: Okay. Well, that makes sense. And that does it for my questions. I appreciate it guys.

Then just to summarize on the G&A expenses what we do internally is actually in order to be comparable with previous quarters, we subtract from the G&A expenses the revenue that we have from management of third-party vessels because actually in order to manage third-party vessels the only additional cost that we have is wages so it’s G&A expenses basically. So to have a real comparison, we subtract from G&A expenses the management fee income. So if you apply this net G&A expenses to the owned vessels this year and last year, the year-over-year reduction is about 2% obviously it’s not too much but it’s to the right direction. And you have to keep in mind that when we’re preparing for further growth of managed vessels capabilities, we’re hiring people in advance of getting the vessels. So basically this is a cost that we have to-date now in order to be able to in next quarter or in two quarters from now to manage the additional vessels that will come to our fleet. And we still believe that the G&A expenses per vessels will go further down from the first quarter 2014 levels.

Okay. Well, that’s helpful. Thank you. Stifel Financial: Okay. Well, that’s helpful. Thank you.

Thank you. And your next question comes from the line of Harsha Gowda from BlueShore. Please go ahead.

So I have three questions for you. Number one, let me just thank you for the great detail you went through in the presentation. It was very helpful and it really shows how much you’ve achieved in the past few years. So thanks for that. My first question is in regards to one of your competitors announced that they’re working on a settlement with STX Pan Ocean for a charter hire termination and they were going to receive cash and stock and roughly they could sell the stock and they’ll get about 20% minimum compensation on the entire claim, have you been proceeding with that also on the broken charter? I think it was on the Borealis from last year. BlueShore: So I have three questions for you. Number one, let me just thank you for the great detail you went through in the presentation. It was very helpful and it really shows how much you’ve achieved in the past few years. So thanks for that. My first question is in regards to one of your competitors announced that they’re working on a settlement with STX Pan Ocean for a charter hire termination and they were going to receive cash and stock and roughly they could sell the stock and they’ll get about 20% minimum compensation on the entire claim, have you been proceeding with that also on the broken charter? I think it was on the Borealis from last year.

Harsha yes. We have -- as you can understand, we have a quite substantial plane for STX Pan Ocean from Star Borealis. This has gone into court because we have not managed to find dynamic-able solution with STX Pan Ocean. The case was discussed actually yesterday in the court in Korea. There was no amount that has been adjudicated because the court has requested STX to provide more evidence on their numbers. I suspect that we’ll going to have a number adjudicated to us but I cannot say more about what this number is going to be.

Okay, another reason is I saw in Western Bulks recent presentation that they -- I guess they came to a settlement with a breakdown in shares and cash and -- there was a decent accounting effect and considering how much the claim is that could be a nice chunk of cash that will help with the capital raising for the next year. So I hope that goes well. BlueShore: Okay, another reason is I saw in Western Bulks recent presentation that they -- I guess they came to a settlement with a breakdown in shares and cash and -- there was a decent accounting effect and considering how much the claim is that could be a nice chunk of cash that will help with the capital raising for the next year. So I hope that goes well.

Harsha, they are not all the claims, they are not adjudicated by the court at the same time. And some of the owners have decided to settle with STX outside of the courts. In our case, it was supposed our claim to be discussed yesterday but there wasn’t not a decision, still you have to keep in mind that if and when this is going to be adjudicated it’s going to be a settlement over of not immediate, actually it’s going to be a settlement over the next 10 years. And it’s going to be 30 so percent in cost and the remaining in equity this is what we’ve been advised actually by the Korean lawyers. And most of the cost is going to be tail heavy. But still we are expecting from the court to get the final decision.

Okay. And just to be sure, the total claim is roughly about 70 million, correct? BlueShore: Okay. And just to be sure, the total claim is roughly about 70 million, correct?

Yes, this is what we are claiming but of course it’s not, we’re not talking about -- we cannot say more about and discuss more about this claim, while this whole claim is in court.

Okay, okay, great. That I just want to see if that was preceding it looks like it is. My next two questions are more industry focus, one of your competitors in the call they were talking today recently about, the slowdown in the Atlantic basin in the second quarter which was, just for the first time and I guess they said in 30 years, they had seen a relative weakness versus the pacific and most of it came down to South American grain season not panning out like everyone expected. However, they said that because this will eventually come on the market and most likely in next few months, that there could be a more positive impact due to the fact that it will coincide with other seasonal aspects such as the U.S. grain season. Do you think that is that your view, how do you look at that in the near-term? BlueShore: Okay, okay, great. That I just want to see if that was preceding it looks like it is. My next two questions are more industry focus, one of your competitors in the call they were talking today recently about, the slowdown in the Atlantic basin in the second quarter which was, just for the first time and I guess they said in 30 years, they had seen a relative weakness versus the pacific and most of it came down to South American grain season not panning out like everyone expected. However, they said that because this will eventually come on the market and most likely in next few months, that there could be a more positive impact due to the fact that it will coincide with other seasonal aspects such as the U.S. grain season. Do you think that is that your view, how do you look at that in the near-term?

We are happy if something like that happens, we do not base our calculations on that, we have also suffered the weakness in the Atlantic because also like many other people we had repositioned some of our Supramaxes from the Pacific to the Atlantic, so that we are fully balanced, but both markets were very weak and we suffered and I think we suffered those in the second quarter of this year, because of the continued pressure in the Capesize rates, mainly because despite the fact that China imported much more iron ore this year than the last year, still most of those imports came from Australia while Brazil was down in volume of iron ore exported to China. And therefore the tonne miles were reduced. And that’s why we think that the weakness of the market on the Capesize that’s what’s resulted in the weakness. But we expect that Brazil will pick up in the second half of this year. And that’s why we are quite optimistic about Brazil’s iron ore exports to China.

Okay. Great, great. And my final question is a little bit more general but considering the recent election of very business-friendly politician and party in India and, the plurality that they have to get things done, are you starting to hear about or seeing any increased import demand or shipping demand, because they specifically said the first thing they’re going to do is increase infrastructure spending. And considering how weak India has been in the last few years. That could be hitting if I assume, I just want to, if you heard anything about that, increase coal or iron ore or anything like that? BlueShore: Okay. Great, great. And my final question is a little bit more general but considering the recent election of very business-friendly politician and party in India and, the plurality that they have to get things done, are you starting to hear about or seeing any increased import demand or shipping demand, because they specifically said the first thing they’re going to do is increase infrastructure spending. And considering how weak India has been in the last few years. That could be hitting if I assume, I just want to, if you heard anything about that, increase coal or iron ore or anything like that?

I think that’s an very important point that you make, we have all been very happy with the changes and listening to what’s happening with India, we haven’t felt it yet in the market, but we think it’s a matter of time that India will start importing more and on the coal side, but also that I think with the declarations that infrastructure projects will start. I think that will give another boost in our market, because up to now we had China, and India was lagging but India will also be an additional source of increased trade.

Great. Thank you. That’s all of my questions. Thank you gentlemen. BlueShore: Great. Thank you. That’s all of my questions. Thank you gentlemen.

Thank you.

Thank you. (Operator Instructions) And your next question comes from the line of Jonas Kraft from Pareto. Please go ahead.

Good evening gentlemen.

Good evening gentlemen.

Hello.

Hello. I will be very-very quick most of my questions have actually already been answered. And returning to the market and your expectation now for the latter half of the year is the market moves higher as you expect, will you consider fixing some of your vessels on longer time charters or will you continue riding the spot market and complying them in their shorter term duce market?

Hello. I will be very-very quick most of my questions have actually already been answered. And returning to the market and your expectation now for the latter half of the year is the market moves higher as you expect, will you consider fixing some of your vessels on longer time charters or will you continue riding the spot market and complying them in their shorter term duce market?

That’s also a good question because we discussed this on our weekly meeting weekly management meeting about what level would be a level that would start considering chartering vessels longer term. But for the time being we don’t have this problem because charter rates remain quite low, remain quite low compared also to the 10 year average, if you exclude also two years of the super cycle still we’re a much below these levels on the Capes. But of course if the market picks up and we see market rates to be at a level where we feel confident that it’s worth start hedging our position than as we’re doing for the interest rates we'll be doing also for the charter rates and probably we’ll start chartering vessels longer term, but not at this point but not at this point.

Will you share what levels you are then thinking about?

Will you share what levels you are then thinking about?

Well I think we don’t take but at this point when you have one and two year rates for Capes at a little bit below 25,000, we don’t feel that’s an appropriate level to charter.

Fair enough, thank you very much gentlemen.

Fair enough, thank you very much gentlemen.

Thank you.

Thank you. (Operator Instructions) There seems to be no further questions at this time gentlemen. I would now like to pass the floor back to the speaker today for any closing remarks. Thank you.

Thank you very much for attending the call on our Q1 results, next week is Posidonia week in Greece where many people are coming from all around the world, I think it’s going to be an important meeting over the shipping world. And that many positive news will come out from Posidonia and for the market going forward. Thank you very much for attending the call.

Thank you. Ladies and gentlemen, that does conclude your conference for today. Thank you all for participating and you may now disconnect.