Mercator Lines (Singapore) agree early termination & settlement agreements with owners of bulkships 'Chaitali Prem' & 'Chanchal Prem'.
Briefly, the existing charter of M.V. “Chaitali Prem” ends on or about 31 August 2014. Under the terms of the relevant Early Termination Agreement, the Company will redeliver the vessel to its owner by 31 December 2012.
The existing charter of M.V. “Chanchal Prem” commenced under a charter party dated 20 July 2007 and has a duration ending on a date no later than 15 November 2015. Under the terms of the relevant Early Termination Agreement, the Company will redeliver the vessel to its owner by 31 March 2013.
The consideration for the agreement by the owners to the early termination of the charters of the vessels is summarised as:
(a) Cash Compensation: Mercator will pay to the owners an aggregate cash compensation of US$9,017,000.
(b) Compensation Shares: Mercator will issue an aggregate of 64,215,205 new ordinary shares in the capital of the Company to the owners.
Mercator Lines is also in the process of negotiating similar arrangements with the owner of another long-term chartered-in vessel in order to reduce its long term liability.