Stelmar Shipping Ltd. has agreed to purchase six high specification double-hull Handymax newbuildings being
constructed for privately owned Greek shipping interests. These new vessels will be delivered between December 2003 and September 2004 and will reduce the average age of Stelmar's Handymax fleet to 8.2 years from 10.8 years, and the average age of Stelmar's total fleet to 6 years from 7 years.
The expected cost at delivery, which includes specifications enhancements, supervision and pre-delivery financing costs, is approximately $177 million. Stelmar will pay a one-time deposit for all six vessels of $23.7 million in cash. A further $6.4 million will be paid in Stelmar stock after registration of the shares with the SEC and no later than March 14, 2003. Stelmar currently anticipates that the remaining balance of the purchase price will be generated from future cash flows and additional bank debt.
, Chief Financial Officer of Stelmar Shipping, added, "This transaction is structured in a manner that best preserves Stelmar's financial strength. Based on the 10 year average time charter rates for Handymaxes of $13,750 per day the acquisition could contribute to EPS, on a pro-forma basis, $0.29 in 2004 and $0.49 in 2005. The delivery of the six new vessels, combined with Stelmar's strategy of signing profitable time charters, should enable Stelmar to achieve high utilization rates and growth. Stelmar will continue to actively manage the implementation of this time charter strategy in order to provide our shareholders with both significant earnings visibility and upside potential."
The new Handymax tankers will add 280,000 dwt of capacity, bringing Stelmar's total cargo-carrying capacity to 2,042,000 dwt. Upon delivery of the six Handymax tankers, as well as the five Panamax newbuildings, Stelmar's total fleet will increase to 42 vessels comprised of 25 Handymaxes, 13 Panamaxes and four Aframaxes. 60% of Stelmar's Handymax fleet will be made up of double-hull vessels and the balance will be double-sided. 100% of Stelmar's Panamax fleet will be comprised of double-hull vessels.