Omega Navigation Enterprises, Inc. (NASDAQ: ONAV, SGX: ONAV50), a provider of global marine transportation services focusing on product tankers, announced that it agreed to a capital infusion of $5.25m through a loan by its founder, CEO and largest shareholder, George Kassiotis.
The capital infusion will be made through a company owned and controlled by George Kassiotis in the form of a secured convertible promissory note which, under certain circumstances and at the option of the holder, may be convertible into a maximum of 8.75 million common shares of the company at any time after the one year anniversary of the Note or upon an event of default under the note. Interest on the note will be 4.0% per annum. The capital infusion will be used to satisfy short term liquidity requirements and fund part of the contracted equity contributions for the Company's newbuilding program through its Joint Venture Company MegaCore Shipping Ltd, with the target of improving long-term profitability.
The capital infusion is being made at a time when the company is in discussions with its lenders to extend the term of its current loans beyond the current maturity of April, 2011. The company believes that the capital infusion should facilitate the loan extension as well as further enhancing other relationships with key business partners.
George Kassiotis, founder, CEO, said, "I have agreed to provide capital to Omega to address short term liquidity requirements and strengthen its balance sheet. This capital infusion further shows my ongoing commitment and support to and confidence in the company and its prospects, especially as it is made in a very challenging and uncertain economic environment and should allow the Company to continue with its growth plans. It further aligns my interests with those of the company and our other shareholders in light of my continuous position as Omega's largest shareholder since our IPO in 2006. I, along with the rest of the Board of Directors and our senior management team, remain fully committed to making Omega a leading participant in the product tanker sector, as well as delivering long term shareholder value."