December 6, 2007
Stealthgas buys two product tanker newbuilds
Athens-headquartered LPG transportation specialist Stealthgas Inc. (NasdaqGS:GASS) has entered into contracts to acquire, from an unaffiliated party, two new 47,000 deadweight M.R. type product tankers ex-yard for delivery in February and April 2008 respectively. On delivery, they will be deployed on seven year bare boat charters to an international oil trader.
The total purchase price of $115 million will be funded by a combination of equity from the company's successful follow on offering completed in July 2007 and bank debt. The aggregate monthly income for the two vessels is $932,672 per calendar month.
"Since our successful follow on offering in July of this year we have been very active in trying to acquire further tonnage in our core sector, Handy Size LPG carriers," commented CEO Harry Vafias. But, he noted, with continued improved market conditions in the LPG sector asset prices are rising and existing owners have become reluctant to sell. So Stealthgas looked for "a secure opportunistic investment" to be able to deploy some of the funds that it raised in the summer
"We believe that the investment in two brand new high tech product tankers fixed on long term bare boat charters to a first class name gives us that opportunity," said Vafias. The LPG sector will continue to be the core of our ongoing strategy as we believe the outlook for the transportation of these gases is very positive over the coming years given, as I have discussed before, the likely increase of supply of product at a time of declining fleet growth in the Handy Size sector."