Omega Navigation Enterprises, Inc. Announces Its Joint Venture Company Megacore Shipping Ltd Will Take Delivery of Newbuilding P
23 Décembre 2009 - 2:58PM
Marketwired
Omega Navigation Enterprises, Inc. (NASDAQ: ONAV) (SGX: ONAV50), a
provider of global marine transportation services focusing on
product tankers, announced today that it has formed an equal
partnership (50/50) joint venture company with Topley Corporation,
a wholly owned subsidiary of Glencore International AG (Glencore).
The name of the joint venture company is Megacore Shipping Ltd.
Companies owned by Omega and the Glencore group have novated their
respective original shipbuilding contracts entered into with
Hyundai Mipo, consisting in total of 10 newbuilding 37,000 dwt
product/chemical carriers (MR1s) (5 vessels each partner), to
companies wholly owned by Megacore. This order has now been
converted to two 37,000 dwt product/chemical tankers (MR1s) and
seven 75,000 dwt. product/oil tankers (LR1s) while one MR1 vessel
has been suspended and remains as an option for Megacore to
exercise in the future. The original delivery schedule of eight
vessels in 2010 and two vessels in the beginning of 2011 has been
amended to three vessels in 2010 four in 2011 and two in 2012. The
overall aggregate purchase cost based on contract price has
remained similar to the original contracts, while the amount of
equity that would need to be invested based on vessels assessed
fair market values has been reduced.
All nine vessels will be owned by companies fully owned by
Megacore, with Omega providing the technical, operating and
administrative services and ST Shipping (wholly owned subsidiary of
Glencore) providing commercial management. The first of these
vessels will be delivered during the first quarter of 2010 and has
secured a three year time charter with NYK lines which was
announced previously. Also, Omega had previously announced
financing commitments on its newbuildings and has transferred these
commitments to Megacore.
Omega President and CEO George Kassiotis commented, "We are very
pleased to have entered this joint venture with a very strong
partner and thus reinforce the already strong relationship with the
Glencore group. Megacore will allow Omega to enjoy significant
operating and commercial synergies with one of the largest
commodities trading companies in the world. The joint venture will
have access to Glencore's global trading network and system cargoes
and ST Shipping's commercial chartering experience and will enable
us to deploy collectively with our partner a fleet of vessels with
significant scale and geographic coverage. Also, the amendment of
the newbuilding order has allowed Omega to better manage its
capital exposure in this very difficult operating and credit
environment. In addition, by spreading the deliveries into 2010,
2011 and 2012, while maintaining the same pre delivery payment
terms it allows time for a market recovery and extends out our
required cash outlays for the vessels. It is apparent that our 2010
equity requirements have thus been significantly reduced. The
conversion into LR1 vessels is also beneficial as the LR1 sector
arguably has been the strongest sector in these difficult times
both in terms of asset value as well as chartering rates
demonstrating the market perception for strong fundamentals based
on the increased use of longer haul routes.
This off balance sheet structure and revised delivery dates has
enabled the Company to shore up its balance sheet and be better
able to face these challenging economic times we are in.
The LR1 vessels have been contracted at a very high
specification and we feel very happy to enjoy such a strong
relation and good cooperation with a preeminent shipyard like
Hyundai Mipo.
Megacore gives both Omega and the Glencore group a very strong
platform to build upon going forward."
About Omega Navigation Enterprises, Inc.
Omega Navigation Enterprises, Inc. is an international provider
of global marine transportation services through the ownership and
operation of double hull product tankers. The current fleet
includes nine double hull product tankers (one through a joint
venture) with a carrying capacity of 559,358 dwt all of which are
under time charter contracts with an average age of less than three
years. In addition to the above mentioned nine newbuilding vessels
the Company has also announced the purchase of an additional
product tanker with a capacity of 47,000 dwt (through a joint
venture) scheduled for delivery in the third quarter 2010. With the
addition of these ten vessels, Omega's fleet will expand to 19
product tankers with a total deadweight capacity of 1,252,358
dwt.
The Company was incorporated in the Marshall Islands in February
2005. Its principal executive offices are located in Athens, Greece
and it also maintains an office in the United States.
Omega Navigation's Class A Common Shares are traded on the
NASDAQ National Market under the symbol "ONAV" and are also listed
on the Singapore Exchange Securities Trading Limited under the
symbol "ONAV 50."
Cautionary Statement Regarding Forward-Looking Statements
Matters discussed in this press release may constitute
forward-looking statements. The Private Securities Litigation
Reform Act of 1995 provides safe harbor protections for
forward-looking statements in order to encourage companies to
provide prospective information about their business.
Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements, which are other than
statements of historical facts.
The Company desires to take advantage of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995
and is including this cautionary statement in connection with this
safe harbor legislation. The words "believe," "anticipate,"
"intends," "estimate," "forecast," "project," "plan," "potential,"
"will," "may," "should," "expect" "pending" and similar expressions
identify forward-looking statements.
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, the Company's
management's examination of historical operating trends, data
contained in the Company's records and other data available from
third parties. Although the Company 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 the Company's
control, the Company cannot assure you that the Company will
achieve or accomplish these expectations, beliefs or
projections.
In addition to these important factors other important factors
that, in the Company's 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 fluctuations in charter rates and
vessel values, changes in demand for product tanker and dry bulk
shipping capacity, changes in the Company's operating expenses,
including bunker prices, drydocking and insurance costs, the market
for the Company's vessels, availability of financing and
refinancing, changes in governmental rules and regulations or
actions taken by regulatory authorities, potential liability from
pending or future litigation, general domestic and international
political conditions, potential disruption of shipping routes due
to accidents or political events, vessels breakdowns and instances
of off-hires and other factors. Please see the Company's filings
with the Securities and Exchange Commission for a more complete
discussion of these and other risks and uncertainties.
Contacts: Company Contact: Gregory A. McGrath Chief Financial
Officer Omega Navigation Enterprises, Inc. PO Box 272 Convent
Station, NJ 07961 Tel. (551) 580-0532 E-mail:
gmcgrath@omeganavigation.com www.omeganavigation.com Investor
Relations / Financial Media: Nicolas Bornozis President Capital
Link, Inc. - New York Tel. (212) 661-7566 E-mail:
nbornozis@capitallink.com www.capitallink.com
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