March 7, 2008
Aries Maritime "evaluates strategic alternatives"
Athens-based Aries Maritime Transport Limited (NASDAQ: RAMS) says its Board of Directors has initiated a review to evaluate strategic alternatives to enhance shareholder value. These may include, but are not limited to the sale or merger of the company, other strategic transactions, potential capital raises, and the continued execution of the company's operating plan.
It also announced that the Board of Directors is considering temporarily suspending payment of its quarterly dividend for the period ended December 31, 2007 in connection with ongoing discussions with its banks regarding the interest cover financial covenant in its fully revolving credit facility and announced that CFO Richard J.H. Coxall has resigned from the company to pursue other interests.
The company has retained Merrill Lynch & Co. as an advisor.
Mons S. Bolin, President and Chief Executive Officer, said the decision "is consistent with its goal to maximize value for shareholders. During this evaluation process, we will be focused on taking further steps to strengthen our ship operations while further implementing our long-term period charter approach. All of Aries Maritime's products tankers and container vessels other than the Arius, which is pending a $21.825 million sale, and the Ostria currently have period charter coverage. Charters for 30% of the company's products tanker fleet currently have profit sharing components."
Mr. Bolin added, "While we believe our time charter coverage supports the company's long-term dividend objectives, the Board of Directors is considering temporarily suspending payment of its quarterly dividend for the period ended December 31, 2007 in connection with ongoing discussions with its banks regarding the interest cover financial covenant in our fully revolving credit facility. At this time, the company is comfortably meeting the other four financial covenants of its facility."
The company also announced that Richard J.H. Coxall, Chief Financial Officer and Director, has resigned from the company to pursue other interests. For transition purposes, the company expects that Mr. Coxall will function as chief financial officer through May 2008. Effective immediately, Mr. Coxall will no longer serve on Aries' Board of Directors. The company has initiated a search for a new chief financial officer.
Mr. Bolin concluded, "We appreciate Richard's dedicated service and valuable contributions throughout his tenure with Aries Maritime and wish him well in future endeavors. We are pleased that Richard will remain with the company through this transition period as we actively seek a new CFO."
Following the departure of Mr. Coxall, Aries Maritime will have a total of four Directors, the majority of which are independent.
The company also announced that the Energy 1, a 1989-built container vessel, is currently out-of-service to undergo repairs. The company is currently evaluating the extent of the repairs. All other vessels in the fleet are operational.
On March 3, 2008, Aries announced it agreed to sell the Arius, the oldest vessel in the company's fleet, to an unrelated third party for a net price of $21.825 million. The company expects to realize a book profit of approximately $10.7 million upon delivery of the vessel, which is expected in the second quarter of 2008, and will use the proceeds to pay down debt under its fully revolving credit facility.
Aries Maritime Transport Limited owns and operates products tankers and container vessels. All of the company's products tanker vessels are double-hulled with an average age of 7.2 years, which excludes the Arius. Upon completing the sale of the Arius, the company's products tanker fleet will consist of five MR tankers and four Panamax tankers. The company also owns a fleet of five container vessels that have an average age of 18.3 years and range in capacity from 1,799 to 2,917 TEU. All of Aries Maritime's products tankers and container vessels, other than the Ostria and the Arius, currently have period charter coverage. Charters for 30% of the company's products tanker fleet currently have profit sharing components.