Publicly traded Rand Logistics, Inc., New York, NY, completed the acquisition of its fifth vessel this year, a Jones Act compliant, self-unloading articulated tug/barge unit. Concurrent with the closing, Rand Logistics placed an additional $25 million of long term debt to fund the acquisition and anticipated modifications to the acquired vessel, as well as for general corporate purposes.
Besides the recently acquired vessel, the Rand fleet includes eight U.S.-flagged vessels (six self-unloading bulk carriers, one self-unloading barge and one articulated tug barge unit) and eight Canadian-flagged vessels (five self-unloading bulk carriers and three dry bulk carriers). Back in 2006, Rand acquired all of the outstanding shares of Lower Lakes Towing and its affiliates.
Scott Bravener, President of Lower Lakes, commented, "We are particularly excited about the prospects for the newly acquired tug/barge unit, as we believe that it is the only Jones Act compliant self-unloading bulk carrier not currently operating on the Great Lakes of a size and configuration suitable for operation in our market. This acquisition marks the first time in many years that new capacity has been added to the river class segment of the U.S. Great Lakes market. This investment reaffirms our commitment to meeting our customers' shipping requirements while also creating value for our shareholders."
Bravener continued, "As an indication of the healthy customer demand that we are experiencing, this vessel is already fully booked under long term contracts for the 2012 sailing season and beyond. From an investment perspective, we believe that the cost of the vessel, after anticipated modifications, reflects an approximate 60% discount to the new build cost of a similarly sized vessel."
December 6, 2011