March 14, 2006
TOP tankers in $550 million sale and leaseback
TOP Tankers Inc (Nasdaq: TOPT) yesterday announced the sale and immediate leaseback of thirteen vessels.
The lease is a bareboat charter, with TOP Tankers continuing to operate and commercially manage the vessels.
The aggregate sale price of the thirteen vessels is approximately $550 million, and the net cash proceeds from the deal (after repayment of corresponding vessel loans and other expenses) are expected to be approximately $240 million.
TOP Tankers expects to generate a book gain of approximately $90 million, which will be amortized over the respective lease period. The leases of the vessels following their sale are expected to qualify as operating leases under U.S. GAAP.
The table below shows the vessels involved and the length of the relevant leases:
Evangelos J. Pistiolis, President and CEO of TOP Tankers Inc., commented: "Since our IPO in July 2004, we have committed to grow our company and create significant value for our shareholders. By entering into this transaction, we capitalize on prevailing high second hand tanker values, while maintaining full commercial and operational control of all our vessels.
"In addition, by distributing the majority of the net cash generated by this transaction in the form of a special dividend, we are generating a substantial return for our shareholders. We intend to continue to pursue similar transactions, whether involving acquisitions, redeployments of existing assets or dispositions, that increase shareholder value.
"After completion of the sale, TOP tankers will remain one of the largest double-hull Suezmax and Handymax operators in the world, with 27 vessels under management. Nine vessels will be fully owned, with an additional 18 tankers chartered-in and fully controlled."
Distribution of Special Dividend
The company has declared a special dividend of $5.00 per share, payable on March 27, 2006 to shareholders of record as of March 22, 2006. The company expects to declare an additional special dividend in the amount of $2.50. The declaration of that dividend is expected to be announced towards the end of March 2006.