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StealthGas Inc. Announces sale of vessels, new charters and other developments |
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Wednesday, 27 January 2010 |
 StealthGas Inc., a ship-owning company serving primarily the liquified petroleum gas (LPG) sector of the international shipping industry announced yesterday that on December 9, 2009 it completed the sale of the Gas Fortune, a 1995 built 3,500 LPG carrier to an unaffiliated entity based in the Far East. On January 15, 2010 the Company completed the sale of the Gas Natalie a 1997 built 3,213 cbm LPG carrier to an unaffiliated entity based in the Far East.
On December 31, 2009 the Company signed a Memorandum of Agreement to
sell the Gas Eternity a 1998 built 3.500 cbm LPG carrier to an
unaffiliated entity based in the Far East. Delivery of this vessel to
it's new owner is expected at the end of April 2010 upon the expiry of
her existing bareboat charter.
The aggregate sale price for these three vessels is approximately $20.0
million and will result in a net inflow of cash to the Company of
approximately $14.3 million after the repayment of debt associated with
the Gas Eternity and commission expenses.
As a result of these sales either concluded or agreed during the fourth
quarter of 2009 the Company will incur a non-cash loss from
sales/impairment of $9.8 million, this will be reflected in the
Company's fourth quarter results to be announced in February 2010.
The Company also announced following protracted negotiations with the
seller of the Stealth Argentina in regard to various technical
deficiencies identified in the design of the vessel that it has entered
into an agreement to cancel both the purchase of the vessel and the
three year bareboat charter that was to commence upon the vessel's
delivery. In consideration of the agreement the Company will pay the
sum of $10,750,000 to the seller on top of the already paid deposit.
The Company also announced the following new charter arrangements:
Commencing from October 29, 2009 the Gas Cathar began a time charter
for between 20 to 50 days to an International Gas Trader. This was
subsequently extended for thee months from the 16th December 2009.
Commencing from 11th January 2010 the Gas Defiance extended her
existing time charter for a further 12 months to a far eastern gas
company.
Commencing from the beginning of January 2010 the Gas Shanghai began a
new one month time charter to a national oil and gas company.
The average time charter equivalent rate for the above three charters is $322,333 per calendar month or $10,635 per day.
CEO Harry Vafias commented:
"The sale of the three above mentioned ships is I believe a prudent
measure as it bolsters the liquidity resources of the Company as we
move into what I believe will be a further challenging year in 2010
plus it reduces our level of debt. It is obviously disappointing to
incur losses on these sales, but they reduce our exposure to the spot
market in which two of the vessels were already trading and the Gas
Eternity would probably have entered into in May. Moreover these are
three of our smallest and oldest pressurized gas ships and we want to
maintain a low average age especially after the deliveries of the 5 new
buildings that will join the fleet in 2011 and 2012. We will also
reduce our dry docking expenditure in 2010 through the sale of the Gas
Fortune.
"The agreement reached with the sellers of the Stealth Argentina is
again I believe a prudent move on the part of the Company's management.
I fully acknowledge that the taking of a loss is disappointing but this
must be considered in the light that after reviewing the design of the
vessel and taking third party advice we developed serious reservations
regarding the operational design of the vessel. We will also now avoid
adding some $43 million of debt to our balance sheet against a ship
with a current market value far lower than this, and due to the change
of bareboat charterer, because of adverse market factors, a bareboat
charter rate that was just break even in its initial years. This
decision was not taken lightly, but it underlines our desire to
maintain our conservative financial structure by removing a significant
amount of new debt we were projecting to incur, it will reduce future
interest expense and it removes a potentially non accretive asset, with
possible impairment issues going forward, from our fleet.
"Finally we are pleased to announce further period charters which are
similar in value to those we announced in November which further
underline the relative steadiness of our core business in its
mainstream time charter sector, and quite a significant improvement in
current market conditions in our core LPG sector in the last few weeks."
Headquartered in Athens, Greece, STEALTHGAS INC. is a ship-owning
company primarily serving the liquified petroleum gas (LPG) sector of
the international shipping industry. STEALTHGAS INC. currently has a
fleet of 38 LPG carriers with a total capacity of 170,286 cubic meters
(cbm) and three M.R. product tankers. In addition, the company has
entered into an agreement to sell the Gas Eternity at the end of April
2010 plus agreements to acquire five new building LPG carriers with
expected delivery from February 2011 through May 2012. Once this sale
and acquisitions are completed, STEALTHGAS INC.'S fleet will be
composed of 42 LPG carriers with a total capacity of 196,786 cubic
meters (cbm) and three M.R. product tankers with a total capacity of
140,000 deadweight tons (dwt). STEALTHGAS INC.'S shares are listed on
the NASDAQ Global Select Market and trade under the symbol "GASS".
Source: StealthGas Inc.
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