Greek Shipping News Cuts
Week 11 - 2010


Greek tranker owners raise a number of operational concerns

---Greek members of Intertanko have expressed concern over the "complete lack of information" from China regarding the country's new regulations on the prevention and control of pollution, which became effective March 1. Though a number of ships controlled by Greeks have called at Chinese ports and had no problems, owners are concerned that under the new regulations they face fines of up to $45,000.
"This is a major concern for owners especially as there is no real information about the application of the new requirements," said one person who attended the March 18 meeting in Athens of the Intertanko Hellenic Mediterranean Panel.
Intertanko's Communications and PR manager, Bill Box, said the requirement is for 'operators' of any ship carrying polluting or hazardous cargoes in bulk, or any other vessel above 10,000gt, to conclude a pollution clean-up contract with a PRC Maritime Safety Agency approved pollution response company before entering a PRC port.
Box, who is also secretary of the Hellenic Med panel, said the Greeks want the issue raised at Imo's Marine Environment Protection Committee meeting in London next week. Indeed, there is some doubt over whether China's MSA has completed the approval of contractors who are to act as spill response organisations, and whether agreed standard contractual terms are in place.
Ballast water treatment systems were also discussed at some length, with the panel being brought up-to-date on the progress made by Intertanko's environmental committee which is working on a decision-making tool for shipowners looking at the various ballast water treatment systems available. The environmental committee has decided to circulate a decision matrix which should assist owners in narrowing down the options available in terms of ballast water treatment systems for tankers.
The evolvement of Bridge Resource Management was discussed with consultant Tim Crowch telling the panel that BRM is "not achieving the results it was originally intented to achieve". "The BRM concept has failed to evolve to meet the human challenges," according to Crowch. Indeed, he goes so far as to say the BRM certificate many crew hold "is doing nothing to aid their company's operational safety".
-- Filed: 2010-03-19

HHI confirms Molaris order cancellations
---South Korean yard loses $425m deal for five suezmaxes
Nigel Lowry and Rajesh Joshi - Thursday 18 March 2010
In its filings, Stamatis Molaris-led Alma does not name the South Korean builder but said that the initial shipbuilding contracts for nine tankers of 158,000 dwt were inked in June 2008. Five of these were cancelled in the next year, the company stated.
But without the charters, the valuation price per unit was deemed to have sunk to $69.5m.

Auditors flag issue with Molaris IPO
---A Greek shipowner's planned listing for Alma Maritime is under a cloud as auditors cite a "going concern" problem.
The new initial public offering (IPO) vehicle for Greek shipowner Stamatis Molaris has been red-flagged with its auditors casting doubt on its ability to survive as a business.
While a successful IPO by Alma Maritime apparently would erase that blemish, the note is extremely unusual for companies pursuing shipping IPOs in recent years and reflects Molaris's desperation to raise cash, finance experts said this week.
"It's pretty evident that if he doesn't get the deal done, he's in deep shit," said one finance man. "It's the type of weakness that investors have lasered in on in the past - either in the sense that they won't touch it, or they'll demand a steep discount to get involved."
One person with long involvement in shipping IPOs says he could not recall another instance in which an IPO aspirant declared a "going concern" problem in its filing.
The note from independent auditors Grant Thornton SA cites "substantial doubt about our ability to continue as a going concern", according to Alma's disclosure to US securities regulators.
The reservation stems from Alma's inability to meet its obligations related to the purchase of three secondhand vessels along with remaining payments on four suezmax newbuildings under construction at South Korea's Hyundai Heavy Industries. Alma has exhausted a $111.6m credit facility with BNP Paribas Fortis and HypoVereinsbank that comes due no later than 31 December.
However, a successful flotation on the New York Stock Exchange (NYSE) would appear to cure that problem. Alma indicates it is negotiating a new eight-year senior term loan with BNP Paribas Fortis for $301m at 325 basis points (bps) over the London interbank offered rate (Libor). Alma expects the loan, contingent upon a successful IPO, to be signed prior to completion of the offering, the filing indicates.
Alma would also receive a junior secured term loan of $74m from the same bank at 500 bps over Libor.
In connection with these loans, Alma would be required to keep $66.5m on hand in a collateral account, to be reduced over time as each suezmax is delivered in 2011. Most of the collateral fund would be funded by IPO proceeds from shares sales to the IPO sponsors, who include Molaris, commodities executive Hans Mende and Fortis private-equity arm Maas Capital.
With new equity and new loans, Alma's auditors are prepared to issue a new opinion free of going-concern wording, the company said in its filing.
Alma proposes to use $155.6m in offering proceeds to pay for acquisitions of the three secondhand vessels identified in the prospectus - two suezmax tankers and one capesize bulker. A further $14.4m would go toward the remaining $238.8m purchase price of the four suezmax newbuildings.
With Molaris clearly in need of cash, what is the selling point for investors to play? Some close to the deal say it is Molaris's track record with other public companies. Promoters will sell his 309% return for initial investors on the former Stelmar Shipping - acquired by Overseas Shipholding Group (OSG) in 2004 - and a 157% return on Quintana Maritime (acquired in 2008 by Excel Maritime).
Secondarily, they will tout Mende's more than 40 years of experience in the commodities business, including leadership of mining and coal company AMCI and a board seat at Quintana. And they will pitch improving fundamentals in the tanker market and the momentum of two successful shipping IPOs in the past month by owners Peter Georgiopoulos and Evangelos Marinakis.
Will that be enough? One finance man fretted this week that IPO sponsors are overestimating the depth of investor interest in shipping issues - especially those of marginal quality.
"Things have gotten a little bit stupid," he said. "I'm afraid shipping is ready to kill the golden goose as it so often does. You could make the argument that Peter Georgiopoulos was a special case. You could even in a lesser way make an argument for Marinakis. But even those issues have traded down since.
"There may be other quality names like a Robert Bugbee connected with Scorpio. But I worry about some of the others, including those we don't know about yet. You have owners desperate to do deals and underwriters looking to make money. They're trying to push an awful lot through what may be a very small window and I'm not sure investors are going to benefit."
By Joe Brady Stamford
Published: 00:00 GMT, 19 Mar 10 | updated: 15:25 GMT, 18 Mar 10

Eagle eyes more market upside
---A long-time timecharter advocate embraces spot exposure
First, it has three vessels on shorter 3-6 month timecharters as of 1Q10.
Second, it has become increasingly attracted to index-listed timecharters. Eagle began fixing ships on one-year contracts linked to the Baltic Supramax Index (BSI) last summer and has since accelerated this strategy. As of 1Q10, it had eight Supramaxes dedicated to BSI-linked charters.
The BSI is a spot-driven gauge, so it allows owners to place a linked timecharter that captures the prevailing spot rate while averting the ballast leg costs of a spot voyage.
He noted that if Eagle ships placed on BSI-linked charters had instead been on straight one-year contracts, rates would have been $18,000-20,000/day, whereas the BSI is hovering around $24,500/day.
Yet Zoullas believes orderbook slippage is accelerating. His numbers show Supramax deliveries slipping 47.6% in 2009 (in relation to predicted deliveries), compared to 41.1% for Panamaxes and 33.7% for Capesizes.
Focus on Eagle
Full company name: Eagle Bulk Shipping Inc
Listing: NASDAQ (EGLE)
Share price: $5.67 (opening 4 March) vs 52-week range of $3.17-9.42
Management: Sophocles Zoullas, CEO Alan Ginsberg, CFO
Based: New York City
Financial results: 4Q09 net income $2.2M vs $9.2M (4Q08); 2009 net income $33.3M vs $61.6M (2008)
Fleet: 33 bulkers totalling 1.7M dwt, 14 newbuildings for 2010-2011 delivery totalling 812,000dwt, plus eight options totalling 464,000dwt
Source: Fairplay - Trade 18 Mar 2010

The Little Company That Could!
---Small companies also do interesting deals and, despite a rumored illiquid credit market, the deal we highlight below was done with bank financing together with an interesting twist. The company renewed their fleet both through the simultaneous acquisition of assets and the sale of an older inefficient vessel. And, it is clearly evident from the press release that for this company transparency is the order of the day.
To partially finance the vessels, the company has arranged an $80 million five-year structured financing consisting of two tranches. The senior secured term loan is in the principal amount of $66.7 million, which amortizes quarterly in equal payments to a balloon of $18.2 million. Pricing is on a grid based upon LTV with the midpoint being LIBOR + 300 bps. The second tranche is a junior secured term loan in the principal amount of $13.7 million.
Similarly, this loan also amortizes in equal quarterly installments to a balloon of $5.3 million. Pricing is also on a grid with the midpoint, in this instance, being LIBOR + 450 bps. The balance of the purchase price is to be paid from its cash ($24.2 million) and the sale of the Chinook for consideration of $8.5 million to be delivered against the purchase price. The Chinook, a 38,700 DWT MR tanker built in Romania in 2001, has been operating on the spot market and generating operating losses. With the vessel no longer a fit, it was an easy decision to dispose of this inefficient vessel and enjoy the estimated operational savings of approximately $2 million annually. Averaging down through both addition and subtraction is highly effective.
Source:, Freshly Minted weekly, 18 March 2010

Oceanfreight Inc. Announces the Termination of the Standby Equity Distribution Agreement
March 18, 2010 - Athens, Greece - OceanFreight Inc., (NASDAQ:OCNF) a global provider of seaborne transportation services announced today that it has terminated its Standby Equity Distribution Agreement (SEDA) with YA Global Master SPV Ltd., an affiliate of Yorkville Advisors LLC, pursuant to which the Company had the option to issue and sell shares worth up to $450 million. The program has been inactive since January 2010 and as of today, the Company raised approximately $99.7 million of gross proceeds and the total number of shares outstanding is 181,800,001.

Tsakos Energy Navigation Reports Results for Fourth Quarter and Full Year 2009
Press Release, March 17th 2010,
Reported Earnings per Share (diluted) of $0.77 for the full year ($1.28 excluding impairment charge)
- Voyage revenues of $444.9 million versus $623.0 million in 2008
- Income of $47.8 million (before vessel impairment charges of $19.1 million) versus $202.9 million (no impairment charge) in 2008
- EPS of $0.77 (diluted) ($1.28 per share excluding impairment charge) compared with $5.33 (diluted) in 2008
- Average operating expenses per vessel per day decreased by 8.2% to $8,677 from $9,450 in 2008
- Accelerated special survey of five tankers initially scheduled for 2010
- Average TCE rate per vessel per day of $22,329 compared with $34,600 in 2008
- Sale of suezmax tanker with a gain of $5.1 million vs. $34.6 million gain on sale in 2008
- Agreement to sell an additional suezmax tanker (delivered in Q1 2010) and agreement to sell two aframax tankers (one delivered in Q1, the other for delivery in Q2 2010)
- Addition of two newbuilding aframax tankers
- Voyage revenues of $98.2 million versus $156.1 million in the fourth quarter of 2008
- Income of $2.4 million (before vessel impairment charges of $19.1 million) versus $27.6 million (no impairment charge) in the fourth quarter 2008
- EPS of $(0.45) (diluted) as compared with $0.74 (diluted) in 2008
- Average operating expenses per vessel per day decreased by 9.5% to $8,743 from $9,662 in the fourth quarter of 2008
- Average TCE rate per vessel per day of $18,081 from $33,768 in the fourth quarter of 2008
- Sale of suezmax tanker with a gain of $5.1 million.
- Agreements to sell three further tankers with deliveries in the first half of 2010
- Payment of first semi-annual dividend of $0.30 per share with respect to 2009 operations
Full Year 2009 Results
Income for the year ended December 31, 2009 amounted to $47.8 million (before impairment charges of $19.1 million) compared to the record net income of $202.9 million achieved in 2008. Net income in 2009 including impairment charges was $28.7 million. The decrease is attributable primarily to the lower freight market and the higher fleet exposure to the spot market for the fleet. The commensurate decline in vessel values contributed to impairment charges totaling $19.1 million incurred on the values of the three oldest vessels in the fleet. Diluted EPS based on weighted average number of shares outstanding was $0.77 versus diluted EPS of $5.33 achieved in 2008. Voyage revenues, net of commissions and voyage expenses, were $351.6 million in 2009 compared to $517.0 million in 2008. Income before depreciation was $123.0 million in 2009 versus $288.4 million in 2008.
Interest and finance costs decreased 45% to $45.9 million in 2009 from $82.9 million in 2008, due mainly to reduced interest rates and positive movements in the valuation of non-hedging interest-rate and bunker swaps.
Fourth Quarter 2009 Results
Income in the fourth quarter of 2009 was $2.4 million before $19.1 million impairment charges versus $27.6 million in the same quarter of 2008 (no impairment charge). EPS (diluted) based on weighted average number of shares outstanding was $(0.45) in the 2009 fourth quarter versus $0.74 in the same period one year earlier.
There was one vessel sale in the fourth quarter of 2009 (the suezmax tanker Pentathlon) which produced a $5.1 million gain, while in the fourth quarter of 2008 there was no vessel sale.
Dividend Distributions
TEN intends to continue to pay cash dividends representing between one-quarter and one-half of ordinary net income. Such payments are subject to the discretion of the Board of Directors and depend on available cash, anticipated cash needs, overall financial condition, loan agreement restrictions, capital commitments, future prospects for earnings and cash flows, as well as other relevant factors. The Company pays a semi-annual dividend for a given fiscal year in October of that year and in April of the following year.
TEN will have distributed $8.175 per share in dividends to its shareholders since the Company was listed on the NYSE in March of 2002. The listing price at the time was $7.50 per share accounting for the 2-1 share split of November 14th, 2007.
During 2009, the Company suspended its share buyback program and in December initiated an at-the-market share issuance program with the objective of selling 3,000,000 shares of common stock with use of proceeds including fleet expansion and general corporate purposes. Actual sales of shares were limited in December to only 17,394 shares raising under $0.3 million, net. In January of this year until temporary suspension of the program, 660,206 shares were sold for a total of $11.4 million, net.
Strategy & Outlook
Cash preservation and accumulation was again the cornerstone of our philosophy and strategy. By the end of 2009, despite the significant fall in charter rates in that year, dividend payments and a continuing, albeit reduced, newbuilding program, our cash position remained near $300 million. This level will be further enhanced by the proceeds of the above mentioned sales. This strong buffer should enable the company to further explore acquisition opportunities that might transpire either in the secondhand or newbuilding front, and to continue adherence to the dividend policy.
In terms of vessel employment, the Company will strive to maintain a material portion of its fleet in secured employment and continue to engage vessels in pooling arrangements as a precaution to a down market. Once markets begin to normalize and provide evidence of a sustainable recovery, it is expected that, given a choice of chartering arrangement, medium to longer term charters, including those with profit sharing arrangements, will be favored. To date, TEN has 31 vessels under fixed charters and charterers with profit-sharing options and assuming only the minimum rate on the profit-sharing contracts, these vessels are expected to generate revenues of $288 million over the duration of their contracts.
Looking ahead, TEN will continue to work closely with international oil majors and end users and always look for ways to mitigate the volatility of the sector. With its strong banking relationships and continued ability to access the debt and equity markets, TEN remains committed to its policy of prudent growth and sustainable revenues going forward.
Conference Call & Webcast
As previously announced, this morning, March 17, 2010 at 11:00 a.m. Eastern Time, TEN will host a conference call to review the earnings results reported in this press release as well as management's outlook for the business. The call, which will be hosted by TEN's senior management, may contain information beyond what is included in this press release.
Tsakos Energy Navigation, Ltd., George Saroglou, COO, Tel: +30210 94 07 710,

Kindly note that only a limited number of places are available and if you wish to participate kindly send the attached registration form duly completed no later than 9th April 2010. Participation will be on a first booking basis.
This two -day course will provide to commercial and technical personnel, shipmasters and seagoing officers, a deeper understanding of oil company risk management, vetting systems and physical inspections. It is based on the requirements of the OCIMF Ship Inspection Report (SIRE) Programme to provide skills to deal effectively with tanker vetting and enhance the handling of inspection processes.
For factsheet for more detailed information for this course, please contact:
I. Iakovou
Marine Training Manager
Greece, East Mediterranean and Adriatic Area
Hellenic Lloyd's S.A.
A member of the Lloyd's Register Group