March 4, 2008
StealthGas expands LPG fleet
Athens-based LPG specialist StealthGas Inc. (NasdaqGS:GASS) has announced a $204 million, ten ship fleet expansion.
StealthGas has ordered five new fully pressurized (FP') handy size LPG carriers from a shipyard in Japan, three of 5,000 cu.m capacity and two of 7,500 cu.m. Deliveries of the 5,000 cu.m vessels are expected at the end of September and November 2010 and the end of March 2011. Deliveries of the 7,500 cu.m vessels are expected at the end of July and December 2011.
The company has also agreed to acquire from an affiliate four new FP' handy size LPG carriers. These are the 5,000 cu.m Gas Defiance and Gas Shuriken, and two as yet unnamed 3,500 cu.m vessels. All are currently under construction in Japan. The Gas Defiance is expected to be delivered by the end of July 2008, when she will start a one-year time charter to a major international gas trader. The Gas Shuriken is expected at the end of October 2008 and will start a two year time charter to the same charterer. The 3,500 cu.m vessels are expected to be delivered at the end of April and June 2009, respectively.
StealthGas has also entered into an agreement with an affiliate to acquire the Gas Natalie, a 3,213 cu.m, 1997 Japanese-built, FP LPG carrier to be delivered by the end of September 2008. She is deployed on a bareboat charter to a major international LPG operatorthat runs until September 2011. The charterer has an option in September 2009 and 2010 to cancel the existing charter on payment of a cancellation fee in the amount of $336,000 if exercised in 2009 or $180,000 if exercised in 2010.
The aggregate charter rate for the Gas Defiance, the Gas Shuriken and the Gas Natalie is $667,500 per calendar month.
StealthGas reports that it has completed the previously announced purchases of two new resale 47,000 deadweight M.R. type product carriers. The Navig8 Fidelity was delivered on January 9, 2008 and the Navig8 Faith was delivered on February 27, 2008. Both, as previously announced, are employed on seven-year bareboat charters.
The company also announced that it has completed two of the three previously announced agreed upon sales of Handy Size LPG carriers. The Gas Oracle was delivered to her new owners on January 28, 2008, the Gas Nemesis was delivered to her new owners on January 29, 2008 and the Gas Renovatio is expected to be delivered to her new owners on or around March 10, 2008.
CEO Harry Vafias commented that since the summer of 2007 the company has found it increasingly difficult to acquire second-hand handy size LPG vessels at attractive prices.
"Therefore," said Vafias, "to continue increasing our presence in the handy size LPG carrier sector we have for the first time since we went public in October 2005 taken the decision to order five modern state of the art fully pressurized vessels from a shipyard in Japan."
Vafias said that with the acquisitions announced today, plus a vessel being delivered this month, "we will, as a minimum, increase the company's LPG fleet on a net basis to 39 ships by the end of 2008. Additionally, we now have two new Product Carriers delivered to us that are deployed on long-term bareboat charters."
"We believe these acquisitions of more modern and efficient tonnage is the beginning of the second phase of expansion for StealthGas Inc., following the very rapid initial phase that ran from the IPO in October 2005 until the end of 2007. All of the vessels to be delivered in 2008 have employment fixed upon them from the day they are delivered to us so they will further contribute to the company's growth in profitability during 2008 and beyond, while at the same time enhancing our secure and transparent earnings profile," Vafias said.