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Danaos Corp. – ‘SC 13D’ on 7/6/23 re: Eagle Bulk Shipping Inc.

On:  Thursday, 7/6/23, at 4:45pm ET   ·   Accession #:  1104659-23-78775   ·   File #:  5-81574

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 7/06/23  Danaos Corp.                      SC 13D                 3:3.4M Eagle Bulk Shipping Inc.          Toppan Merrill/FA

Document/Exhibit                   Description                      Pages   Size 

 1: SC 13D      Statement of Acquisition of Beneficial Ownership    HTML   3.39M 
                by an "Active" Investor                                          
 2: EX-1        Underwriting Agreement or Conflict Minerals Report  HTML     23K 
 3: EX-2        Plan of Acquisition, Reorganization, Arrangement,   HTML     24K 
                Liquidation or Succession                                        

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934 

(Amendment No. )^*

EAGLE BULK SHIPPING INC.

(Name of Issuer)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

Y2187A150

(CUSIP Number)

Danaos Corporation

Attn: Dr. John Coustas
14 Akti Kondyli

185 45 Piraeus, Greece
011 30 210 419 6480

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

June 26, 2023

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

^*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

(Continued on following pages)

This Schedule 13D relates to the common stock, par value $0.01 per share (“Common Stock”), of Eagle Bulk Shipping Inc., a Marshall Islands corporation (the “Issuer”). The principal executive office of the Issuer is located at 300 First Stamford Place, Stamford, Connecticut 06902. Information given in response to each item below shall be deemed incorporated by reference in all other items below.

(a). This statement on Schedule 13D is being filed by Danaos Corporation, a Marshall Islands corporation (“Danaos” or the “Reporting Person”)

(b), (c) and (f). The address of the principal business and principal office of Danaos is c/o Danaos Shipping Company Limited, 14 Akti Kondyli, 185 45 Piraeus, Greece. The principal business and occupation of Danaos is marine transportation. Current information concerning the identity and background of each of the executive officers and directors of Danaos is set forth on Annex A (collectively, the “Covered Persons”), attached hereto and incorporated herein by reference.

(d), (e). During the last five years, none of Danaos, nor to the best of its knowledge, any Covered Person, has (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

The aggregate purchase price (inclusive of commissions) of the 1,552,865 shares of Common Stock beneficially owned by Danaos as of the date hereof is $68,162,046.45, which was funded from the working capital of Danaos.

Between May 31, 2023 and June 22, 2023, Danaos acquired 993,529 shares of Common Stock in open market purchases through brokers for an aggregate amount (inclusive of commissions) of $43,719,063.25.

Pursuant to a Share Purchase Agreement, dated as of June 8, 2023 (the “Share Purchase Agreement”), Danaos acquired 559,336 shares of Common Stock for $24,442,983.20, or $43.70 per share, from Virage International Ltd. (“Virage”), a wholly-owned subsidiary of Danaos Investment Limited (“DIL”) as Trustee of the 883 Trust. DIL is the largest stockholder of the Danaos and a trust for the benefit of the family of Danaos’s Chairman, Chief Executive and President, Dr. John Coustas, in a privately negotiated transaction. Iraklis Prokopakis, the Chief Operating Officer of Danaos, and Evangelos Chatzis, the Chief Financial Officer of Danaos, are two of the four members of the board of directors of DIL. Virage acquired these shares of Common Stock for $24,483,008.37 (including commissions) in open market purchases through brokers between April 18, 2023 and May 30, 2023 using its working capital.

Danaos is one of the largest independent owners of modern, large-size containerships, chartering its fleet to many of the world’s largest liner companies, and has been operating in the maritime sector for over 50 years. Danaos initially invested in the securities of the Issuer due to its belief that (i) the Issuer is undervalued, (ii) the Board of Directors of the Issuer (the “Board”) had a strong track record in corporate governance and (iii) Danaos would be able to work collaboratively and constructively with the Board to identify balanced, well-considered, and effective methods to enhance shareholder value on behalf of all shareholders.  Danaos was therefore surprised and deeply disappointed by the Board’s dubious decision to repurchase Oaktree Capital’s (“Oaktree”) entire 28% stake in the Issuer at nearly a 35% premium to the Company’s 45-day average share price and its decision to adopt a poison pill without seeking prior shareholder approval. Danaos was also disappointed by the Board’s response to the severe concerns publicly stated by Danaos regarding the Oaktree repurchase, specifically the Board’s attempt to justify the significant premium paid to Oaktree on the basis that it represented a lower offer than a prior one that the Board alleges was made by Danaos for Oaktree’s shares. Danaos strongly refutes the Board’s claim that Danaos made an actual offer to Oaktree at any specific price, and accordingly Danaos also refutes that it communicated to the Issuer that it had done so at a price at or around the Issuer’s net asset value (NAV) or otherwise. 

Nevertheless, as the Issuer’s largest shareholder, Danaos has a strong vested interest in collaborating with the Issuer to enhance long-term shareholder value and therefore intends to engage constructively with the Board and/or management going forward about operational and strategic improvements.  In the course of its constructive dialogue with the Board, Danaos may consider, explore and/or develop plans and/or make proposals (whether preliminary or firm) with respect to, among other things, potential changes in the structure and efficiency of the Issuer’s operations, which have significant room for improvement relative to its peer group. Improvements in the operating cost structure will enhance the competitiveness of the Issuer and enhance its resilience in periods where operating margins are challenging – and we are in such a period today. Additionally, implementation of Danaos’s award-wining business intelligence (BI)-enhanced maritime software -- which has placed Danaos at the vanguard of digitization in the shipping industry by integrating real-time vessel performance, technical, operational, chartering and accounting data – could alone meaningfully enhance the Issuer’s operational efficiency and create significant value for all shareholders. Additionally, Danaos may consider and/or make proposals (whether preliminary or firm) regarding the Issuer’s Board composition, ownership, capital or corporate structure, sale transactions, and/or strategy and plans.  Such discussions could include proposed transactions in which Danaos may seek to participate and potentially engage in, as a purchaser or investor.

Danaos intends to communicate with the Board about, and may enter into negotiations with the Board regarding, the foregoing and a broad range of operational and strategic matters and to communicate with other shareholders or third parties regarding the Issuer.  Danaos may change its intentions with respect to any and all matters referred to in this Item 4.  Danaos may also take steps to explore and prepare for various plans and actions, and propose transactions, before forming an intention to engage in such plans or actions or proceed with such transactions.

Danaos intends to review its investment in the Issuer on a continuing basis and depending upon various factors, including without limitation, the Issuer’s financial position and strategic direction, the outcome of any discussions referenced above, overall market conditions, other investment opportunities available to the Danaos, and the availability of securities of the Issuer at prices that would make the purchase or sale of such securities desirable, Danaos may endeavor to increase or decrease its position in the Issuer through, among other things, the purchase or sale of securities of the Issuer, including through transactions involving the Common Stock and/or other equity, debt, notes, other securities, or derivative or other instruments that are based upon or relate to the value of securities of the Issuer in the open market or in private transactions, on such terms and at such times as Danaos may deem advisable.  In addition, Danaos may, at any time and from time to time, (i) review or reconsider its position and/or change its purpose and/or formulate plans or proposals with respect thereto and (ii) consider or propose one or more of the actions described  in subparagraphs (a) - (j) of Item 4 of Schedule 13D.

A copy of the letter addressed to the Board issued by Danaos on June 26, 2023 is attached hereto as Exhibit 1, and is incorporated herein by reference.

(a) and (b) The responses of Danaos to Rows (7) through (11) of the cover page of this Schedule are incorporated herein by reference. 

Except as set forth herein, neither Danaos nor, to the knowledge of Danaos, the Covered Persons beneficially own any Common Stock as of the date of this filing.

(c) Annex B, attached hereto, sets forth transactions in the Common Stock that were effected during the past 60 days by Danaos and Virage, in addition to Danaos’ acquisition of shares of Common Stock from Virage pursuant to the Share Purchase Agreement described in Item 3 of this Schedule. The transactions in the Common Stock described on Annex B were effected on securities exchanges through brokers unless otherwise indicated therein. Except as set forth in this Schedule, neither Danaos nor, to the best of its knowledge, any of the Covered Persons has engaged in any transaction in any Common Stock during the past 60 days.

(d) No other person is known to Danaos to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of the Common Stock covered by this Schedule.

(e) Not applicable.

The information set forth in Items 3 and 4 are hereby incorporated herein by reference. Except as set forth in this Schedule, none of Danaos, nor, to the best of its knowledge, any Covered Person has any contracts, arrangements, understandings or relationships (legal or otherwise) with any person, with respect to any securities of the Issuer.

Exhibit 1: Press Release with Letter dated June 26, 2023 from Danaos Corporation addressed to the Board of Directors of Eagle Bulk Shipping Inc.

Exhibit 2: Share Purchase Agreement, dated as of June 8, 2023, by and between Danaos Corporation and Virage International Ltd.

[The remainder of this page intentionally left blank]

SIGNATURE

After reasonable inquiry and to the best of the knowledge and belief of the undersigned, the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: July 6, 2023

Annex A

Danaos Corporation

c/o Danaos Shipping Company Limited

14 Akti Kondyli

185 45 Piraeus

Greece

Directors and Executive Officers of Danaos Corporation:

Annex B

Transactions in Common Stock

Danaos Corporation effected trades of Common Stock in the open market during the past 60 days as follows: