NewLead Holdings Ltd. Announces $148 Million Acquisition of Five Vessels
- Continues fleet expansion and extends newbuilding program
- Secures right of first refusal for three newbuildings
PIRAEUS, Greece, June 25 /PRNewswire-FirstCall/ -- NewLead Holdings Ltd. (Nasdaq: NEWL) ("NewLead" or the "Company") today announced it has signed a Letter of Intent for the dropdown of five dry bulk vessels, including two newbuildings, and the right of first refusal for three newbuildings from Grandunion Inc. ("Grandunion"). The transaction is expected to be concluded in the third quarter of 2010.
Total consideration for the dropdown of the five vessels is approximately $148 million, which includes assumed debt and shipyard financing. NewLead also secured the right of first refusal for three 81,000 dwt Kamsarmaxes, being constructed at a first-class shipyard in Korea, scheduled for delivery in 2013 with long-term charters attached. As a result of this transaction, NewLead's fleet, including newbuildings, will consist of 24 vessels-nine product tankers and 15 dry bulk carriers.
Michael Zolotas, President and Chief Executive Officer stated, "NewLead continues to expand its fleet in line with its growth strategy. Since NewLead's recapitalization during the fourth quarter of 2009, the Company acquired 17 vessels, including five newbuildings, while divesting inefficient non-core vessels and exiting the container sector. By expanding and diversifying the fleet, NewLead has positioned itself to capture opportunities in the two segments in which it operates. We will continue to pursue our fleet growth strategy as we build the Company's competitive position."
Dropdown Vessels: |
||||||
Vessel |
Size (dwt) |
Type |
Built /Delivery |
Charter Rate (daily, net) |
Term/Expiration |
|
Grand Spartounta |
135,070 |
Capesize |
1989 |
$20,625 |
min: July 2010 max: Oct. 2010 |
|
Grand Esmeralda |
69,458 |
Panamax |
1990 |
$10,200 (net) + profit sharing 50/50(1) |
min: Dec. 2011 max: Apr. 2012 |
|
Grand Markela |
71,733 |
Panamax |
1990 |
$21,972 |
min: Feb 2013 max: Jun 2013 |
|
SPP Hull H-4023 |
35,000 |
Handysize |
NB 2/2011 |
$12,000 base rate, $12,000-14,000 100% for charterers acc – profit sharing 60% charterers, 40% owners above $14,000(2) |
12 years +/- 4 months |
|
SPP Hull H-4029 |
35,000 |
Handysize |
NB 7/2012 |
$12,000 base rate, $12,000-14,000 100% for charterers acc – profit sharing 60% charterers, 40% owners above $14,000(2) |
12 years +/- 4 months |
|
Total Dwt: |
346,261 |
|||||
NewLead's Fleet: |
||||||
Name |
Size (dwt) |
Vessel Type |
Year Built |
Charter Rate (daily, net) |
Charter Expiration |
|
Product Tanker Vessels |
||||||
Stena Compass |
72,736 |
Panamax |
2006 |
$18,233 + 30% profit share above $26,000(3) |
December 2010 |
|
Newlead Compassion |
72,782 |
Panamax |
2006 |
Spot |
||
Newlead Avra |
73,495 |
Panamax |
2004 |
Spot |
||
Newlead Fortune |
73,495 |
Panamax |
2004 |
Spot |
||
Hiotissa |
37,329 |
Handymax |
2004 |
$19,013 + profit sharing above $19,500 |
min: April 2011 max: June 2011 |
|
Hiona |
37,337 |
Handymax |
2003 |
$19,013 + profit sharing above $19,500 |
min: March 2011 max: May 2011 |
|
Nordanvind(4) |
38,615 |
Handymax |
2001 |
Spot |
||
Ostria(4) |
38,615 |
Handymax |
2000 |
Spot |
||
High Land |
41,450 |
Handymax |
1992 |
$8,181 |
July 2010 |
|
Dry bulk Vessels |
||||||
Newlead Victoria |
75,966 |
Panamax |
2002 |
$16,875 |
min: October 2010 max: January 2011 |
|
The net daily hire to be the average of the 4 Baltic Panamax Timecharter routes published by the Baltic Exchange over the previous 14 days plus 5%(5) |
Abt 20 to abt 22 months (abt means +/- 15 days in chopt) |
|||||
Brazil |
151,738 |
Capesize |
1995 |
$28,985(6) |
min: October 2014 max: February 2015 |
|
Australia |
172,972 |
Capesize |
1993 |
$20,391 |
min: November 2011 max: January 2012 |
|
China |
135,364 |
Capesize |
1992 |
$12,753 |
min: November 2015 max: October 2016 |
|
Grand Ocean |
149,498 |
Capesize |
1990 |
$15,360 |
min: December 2010 max: April 2011 |
|
Grand Venetico |
134,982 |
Capesize |
1990 |
$17,760 |
min: June 2011 max: October 2011 |
|
Grand Rodosi |
68,788 |
Panamax |
1990 |
$24,375 |
June 29,2010 |
|
Newbuildings |
||||||
Name |
Size (dwt) |
Vessel Type |
Expected Delivery Date |
Charter Rate (daily, net) |
Charter term |
|
TBN |
92,000 |
Post-Panamax |
Q2 2011 |
$14,438 + 50/50 Profit Sharing when 110% of BPI route index exceeds $17,000 |
Seven years time charter |
|
TBN |
80,000 |
Kamsarmax |
Q4 2010 |
$28,710(7) |
Seven years time charter |
|
TBN |
80,000 |
Kamsarmax |
Q4 2011 |
$27,300 |
Seven years time charter |
|
(1) Profit sharing is based on 86% of the Baltic Panamax Average 4TC Routes. (2) Profit sharing based on open book accounting on actual earnings. (3) Vessel is under a bareboat charter party agreement. The operating expenses are for the account of the charterer. Accordingly, the vessel's Time Charter Equivalent (TCE) rate is grossed up to reflect estimated daily operating costs. As a result, the vessel's charter rate is adjusted to a TCE rate of $24,933, to include estimated operating costs of $6,700. (4) In March 2010, MOAs for the sale of these vessels were executed and the sales are expected to close during the third quarter of 2010. (5) Less 5% commissions (6) $28,985 for the first and second years, $26,180 plus 50/50 profit sharing for all years thereafter, (85% of the Cape Spot 4 TCE Avg. Minus $26,600). (7) $28,710 five years charter, plus two optional years (1+1). Owners' put option for up to two year's charter at a net charter rate between $20,000 and $28,000. This fixture is subject to first Charterer not exercising their optional years, in order to secure a total seven-year charter duration for the vessel. |
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About NewLead Holdings Ltd.
NewLead Holdings Ltd. is an international shipping company that owns and operates product tankers, and dry bulk vessels. NewLead's common stock is listed on the NASDAQ Global Select Market where it trades under the symbol "NEWL". To learn more about NewLead Holdings Ltd., please visit the new website at www.newleadholdings.com.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995
This press release includes assumptions, expectations, projections, intentions and beliefs about future events. These statements, as well as words such as "anticipate," "estimate," "project," "plan," and "expect," are intended to be ''forward-looking" statements. We caution that assumptions, expectations, projections, intentions and beliefs about future events may vary from actual results and the differences can be material. Forward-looking statements include, but are not limited to, such matters as future operating or financial results; statements about planned, pending or recent acquisitions and business strategy. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although NewLead believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, NewLead cannot assure you that it will achieve or accomplish these expectations, beliefs or projections described in the forward looking statements. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including changes in charter rates and vessel values, failure of a seller to deliver one or more vessels, and other factors discussed in NewLead's filings with the U.S. Securities and Exchange Commission from time to time. NewLead expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in NewLead's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.
SOURCE NewLead Holdings Ltd.
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