October 18, 2005
General Maritime sells ten tankers
General Maritime Corporation (NYSE: GMR) has agreed to sell ten single-hull and double-sided Suezmax vessels en bloc to Singapore-based Tanker Pacific for $294.5 million.
The company expects to realize a net gain of $109 million from the sale of these ten vessels. The company intends to utilize the proceeds to pay down debt and therefore the proceeds will be excluded in the calculation of the dividend for the applicable quarters.The delivery of the vessels is expected to take place between November 2005 and January 2006.
Peter C. Georgiopoulos, Chairman, Chief Executive Officer and President, stated, "Consistent with General Maritime's strategy of modernizing its fleet, we have entered into this opportunistic transaction that will enable the company to further unlock shareholder value. In addition to selling the vessels at an extremely favorable price and earning an approximately 80% annualized return on our initial investment, the transaction improves the fleet's age profile, increases the percentage of double-hull vessels and further strengthens our balance sheet. With significant financial strength and flexibility, General Maritime is well positioned to build upon its past success and continue to seek opportunities to create enduring value for shareholders."
The vessel sales include four single-hull and six double-sided vessels with an average age of approximately 15.5 years. Following the completion of the sale and including the four Suezmax newbuildings to be delivered between 2006 and 2008, the average age of General Maritime's fleet will be reduced to ten years and its percentage of double-hull vessels will be increased to 81%.