Megacore Shipping Gets Tankers, Adds Partner

Omega Navigation Enterprises, Inc. (NASDAQ:ONAV), a provider of Marine Transportation services specializing in product tankers, announced that Megacore Shipping Ltd., its previously announced joint venture with a wholly owned subsidiary of Glencore International AG, has taken delivery from Hyundai Mipo Dockyard in S. Korea of the Megacore Philomena during the fourth quarter of 2010 and of the Megacore Pacifica and the Megacore Philothea during January 2011, each a 74,000 dwt. coated Panamax product carrier. 

Megacore Shipping Ltd. has contracted to acquire two Handysize double hull chemical / product tankers and seven Panamax double hull product tankers to be constructed at Hyundai Mipo Dockyard in South Korea. The two handysize vessels, the 37,000 dwt. Megacore Honami and Megacore Hibiscus, were delivered in February and May 2010. 

The construction and acquisition of these vessels has been funded with bank debt and equity contributions from the joint venture shareholders. 

The Megacore Philomena, Megacore Pacifica and Megacore Philothea represent the third, fourth and fifth in a series of nine newbuildings for Megacore. In addition to these vessels, Megacore is scheduled to take delivery of an additional 4 newbuilding Panamanx product carriers, including 2 vessels in 2011 and 2 vessels to be delivered in 2012. The addition of the Megacore Philomena, Megacore Pacifica and Megacore Philothea brings the Omega fleet to 15 vessels in total. 

Omega Navigation also announces that an unaffiliated third party has purchased at Omega's original book cost a 20% minority equity interest in the Omega subsidiary that owns a 50% interest in Megacore Shipping Ltd. Omega retains full control of this subsidiary, 80% of the shares of which remain under the ownership of Omega. The proceeds from the sale are used by Omega to fund newbuilding payments on the Panamax product tankers for the joint venture. 

The sale of the minority stake has limited the equity requirements by Omega for the purchase of the newbuildings.