Omega Signs Contracts for Five New Tankers
Omega Navigation Enterprises, (ONE) Inc. has signed shipbuilding contracts with Hyundai Mipo Dockyard in South Korea, to construct and acquire five newbuilding double hull handymax product tankers each with a capacity of 37,000 dwt.
Four of these product tankers are scheduled for delivery in 2010 starting in the first quarter of 2010, with the fifth scheduled for delivery for February 2011.
The agreed purchase price of the five new buildings is $44.2m per vessel. Predelivery payment terms provide for 10% in early July 2007 and 10% in mid December 2007. No further progress payments will be due until mid 2009.
These first two installments will be funded either fully with debt or with a combination of debt and internally generated cash flow and the company does not expect this financing structure to affect its ability to fund its current quarterly dividend policy. With the addition of these five vessels, the Omega fleet will consist of 13 product tankers with a total deadweight capacity of 697,358 tons.
Management Commentary:
George Kassiotis, President and Chief Executive Officer of Omega Navigation, commented: We are pleased to announce the continued implementation of our growth strategy with the ordering of these five newbuilding handymax product tankers. These are high specification IMO II/III product/chemical tankers and are being built in one of the most specialized and reputable yards in the world for building this type of vessels.
Omega’s current fleet already includes two vessels of similar characteristics built in this yard. We expect to take delivery of these vessels between March of 2010 and early in the year 2011 at a time when newbuilding berths for product tankers around the world are becoming increasingly hard to find.
Given the design and quality of the vessels, we expect to employ them on long term charters to high quality charterers, consistent with the employment of our current vessels. We believe that this transaction ensures that we will be able to grow the fleet in a disciplined manner as we have contracted these high quality vessels at prices well below those that could be currently achieved in the second hand market.
At the same time, the Company continues to actively monitor potential accretive opportunities in the second hand sales and purchase market.
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