Tsakos Energy Navigation Limited yesterday announced a three-year time charter with profit sharing for the 2007-built double hull suezmax tanker Arctic.
Tsakos Energy Navigation Limited yesterday announced a three-year time charter with profit sharing for the 2007-built double hull suezmax tanker Arctic. The charter is structured with a minimum rate and a 50/50 profit share up to an agreed maximum rate. Prior to this charter the vessel operated in the spot market. The Arctic charter began in early July 2009. The gross proceeds from the charter, assuming only the minimum rate, are expected to exceed $25 million over the corresponding period. Following this charter extension , TEN's fixed employment for 2009 and 2010 is 66% and 48%, respectively. Assuming profit-sharing charters generate only the minimum for the remaining operating days in 2009, TEN expects to earn at least $130 million in incremental gross revenues. For 2010, based on the same assumptions, the minimum gross revenue already secured is estimated at $180 million.
"It is encouraging to see major oil companies fixing modern vessels forward," said Mr. Nikolas P. Tsakos, President and CEO of TEN. "It's also a testament to the acceptability of our vessels by major end-users and in the freight market's improvement as the global economy is expected to start growing again in 2010. For TEN, these minimum rate time charters with profit sharing provide downside protection as well as the flexibility to participate in market rallies while continuing to support the fleet's strong cash flow generating capacity."