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Star Bulk Carriers CEO Discusses Q3 2010 Results - Earnings Call Transcript

Please turn to slide number 3 of the presentation to discuss some important financial data. On this slide, we present certain key data to illustrate why we continue to believe that while Star Bulk continues to enjoy a very comfortable financial position, it remains substantially undervalued. As of November 17, 2010, our minimum total contracted revenue is $200 million, and our market capitalization stands at $184 million. We estimate the charter free value of our fleet to be about $390 million, and the charter adjusted value to be about $420 million.

These estimates include the downpayments for the two new building Capes, [House Numbers] 63 and 64. Our senior debt currently stands at about $210 million, and our current cash position is approximately $41 million. According to the above, the company's net asset value, or NAV as we call it, amounts to $251 million or $4.03 per share based on our charter adjusted fleet valuation. Based on a share price of $2.96 at yesterday's close, our price to NAV ratio stands at 73%, indicating plenty of room for price appreciation from the current, heavily discounted levels.

I would like to reiterate that we have resisted exposure to interest rate swaps and have therefore taken the full benefit of the prevailing low interest rates. I should point out that after having paid $43 million of the first two installments of the two new building Capesize vessels, and $63 million to our banks in principal repayment, Star Bulk has managed to grow organically while significantly reducing its leverage.

The company currently maintains a net debt to total asset ratio of 24%, which is considered conservative. Going forward, the remaining principal repayment for 2010 is $5 million, out of a total of $68 million for the year. Principal repayment for 2011 goes down to $35 million.

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