March 26, 2004
General Maritime swoops on Soponata
General Maritime Corporation says it has reached an agreement to acquire the fleet and technical operations of Portugal's Soponata SA, for cash. As part of this transaction, General Maritime will acquire five vessels, four newbuilding contracts and Soponata's technical management company. The transaction is subject to customary closing conditions and is expected to be completed by May 2004.
General Maritime will acquire Soponata SA's fleet and operations for an enterprise value of $415 million (inclusive of four newbuilding contracts). It intends to finance the acquisition through the use of cash on hand and available borrowings on its revolving credit facility. General Maritime expects the acquisition to be immediately accretive. Based on the 5-year Clarksons average for Suezmax and Aframax spot rates, General Maritime believes the acquisition could contribute $34.2 million annually and $60.4 million annually after the addition of the four newbuildings to operating cash flow on a pro-forma basis.
The Soponata acquisition will significantly improve the age profile of General Maritime's fleet. Including the newbuildings, the average age of the fleet will be reduced to approximately 10 years from its present age of approximately 12 years.
The percentage of double-hull and double-sided vessels will increase to 83% compared to 79% at the present time. Including the newbuildings, General Maritime's fleet will increase to 51 vessels, consisting of 26 Aframax and 25 Suezmax with a carrying capacity of approximately 6.2 million dwt.
Peter Georgiopoulos, Chairman, Chief Executive Officer and President, commented, "We are extremely excited to have once again utilized our strong financial position to consolidate the mid-sized tanker market in an accretive manner. The acquisition, which was completed at a compelling price, will enable General Maritime to accomplish important strategic objectives such as further increasing our earnings potential, improving the age profile of our fleet, and expanding our chartering relationships with oil majors. The newbuilding contracts that we acquired also enable General Maritime to access the newbuilding market without adding to the world orderbook capacity."