September 20, 2006
Aries Maritime in newbuilding purchasedeal with Stena
Aries Maritime Transport Limited (NasdaqNM:RAMS) announced today that it has entered into an agreement to purchase two 72,750 dwt double-hulled Panamax products tankers from the Stena Group.
The vessels are currently under construction at Dalian Shipyard in China and are expected to be delivered in November 2005 and March 2006.
On delivery, each vessel will enter into a 2 1/2 year bareboat charter agreement with Stena Bulk at a rate of $18,700 per day, which is equal to a time charter equivalent rate of approximately $24,500. In addition to the secured income from the fixed bareboat rate, Aries has entered into an index linked profit sharing agreement with Stena Bulk, with a 30 percent share for Aries.
The aggregate purchase price for the two vessels is approximately $112 million. Aries Maritime plans to draw upon its $150 million revolving senior credit facility to fund the transaction, with 10% of the purchase price due at the time of signing and the balance due at time of delivery of each vessel. Aries management expects this transaction to provide a minimum of $0.07 accretion to the company's 2006 dividend, prior to any profit sharing contribution.
Mons S. Bolin, President and Chief Executive Officer, commented, "We are pleased to grow the company with this accretive acquisition of two high specification double-hulled Panamax products tankers that further enhances our position to take advantage of the highly favorable long-term fundamentals for the products sector. We are also pleased to commence a relationship with Stena, a leading Swedish shipping group of the highest international reputation for quality and reliability. Consistent with our focus on making strategic decisions that drive shareholder value, the bareboat charter and profit-sharing agreement allows Aries to provide further earnings stability while positioning the company to increase its dividend. We look forward to paying our first dividend after our third quarter earnings announcement. As we move forward, we will continue to seek growth opportunities that are accretive to our dividend and best serve the Company and its shareholders."
Aries Maritime says it currently intends to pay a quarterly dividend in February, May, August and November of each year. Aries expects to declare the initial quarterly dividend in the amount of $0.52 per share, following the announcement of its third quarter 2005 results in October, 2005. The first dividend will cover the four-month period between June 1, 2005 and September 30, 2005.
Athens-headquartered Aries Maritime Transport Limited owns a products tanker fleet, which has an average age of 7.8 years and is 100% double-hulled. It consists of four MR tankers, two Panamax tankers and one Aframax tanker. The company also owns a fleet of five container vessels. The Company's container vessels have an average age of 15.6 years and range in capacity from 1,799 to 2,917 TEU.
All of the company's product tankers and container vessels currently operate under long-term time charters