January 12, 2006
TEN adds more ships
Tsakos Energy Navigation Limited (TEN) (NYSE: TNP) has announced the acquisition of two newbuilding contracts and two second-hand vessels.
The newbuilding contracts cover construction of two 1B ice-class product carriers to be delivered in the second and third quarters of 2007.
The second-hand vessels are a double-hull product tanker and a double-hull VLCC to be delivered in the first quarter of 2006.
The product tanker is on time- charter until September 2006.
The VLCC operates in the spot market.
These vessels were acquired from entities affiliated with the Tsakos Group and will continue to be managed by Tsakos Shipping & Trading S.A.
Total consideration for the four vessels (including newbuilding instalments) is $219.0 million and will be financed by TEN's own funds and bank debt. The price to be paid for the four acquisitions is based on fair market valuations received from five independent ship brokers. A committee of independent directors reviewed management's proposal and the board of directors approved and authorized the acquisitions.
TEN also announced a newbuilding order for a 105,000 dwt Aframax tanker at Sumitomo Heavy Industries, Ltd. of Japan to be delivered in the second half of 2008.
This latest order is for a sister vessel to two other Aframaxes also being built for TEN by Sumitomo. The contract price for this newbuilding is $58.9 million and will also be financed with TEN's own funds and bank debt.
D. John Stavropoulos, Chairman of the Board of Tsakos Energy Navigation, Ltd. , said the transactions will "provide TEN with more versatility to serve its clients and will assure shareholders of management's commitment and capacity to grow the company not only through newbuildings, but also through selective acquisitions of second-hand vessels."
Stavropoulos concluded, "We project these acquisitions will be immediately accretive to net income and per share earnings which should enhance shareholder value and increase the company's dividend capacity."
The next newbuilding to join TEN's existing fleet is the 1A ice-class double-hull suezmax tanker "Alaska" expected to be delivered on February 27, 2006 from Hyundai Heavy Industries in South Korea.
Additional specifications on all five vessels are as follows:
Including the vessels announced above, TEN operates a fleet of 28 vessels (including three chartered-in vessels) of approximately 3.4 million dwt with an average age of 6.5 years compared to 11.7 years of the world average. Its newbuilding program consists of 13 vessels (3 Suezmax, 3 Aframax, 6 Handysize, and 1 LNG) of 1.1 million dwt..