TOP Tankers Announces Re-Acquisition of Suezmax Tankers
TOP Tankers Inc said that it has entered into an agreement to re-acquire four suezmax tankers that it sold in 2006 in a sale and lease-back transaction, and to terminate the respective operating leases. The four suezmax tankers are Limitless (DWT 136,055 built 1993), Endless (DWT 135,915 built 1992), Noiseless (DWT 149,554 built 1992) and Stainless (DWT 149,599 built 1992). The acquisition will be financed 70% by bank debt, already secured with a leading shipping lender, 10% by the early redemption of the seller's credit associated with the 2006 sales and lease back transactions and 20% by existing cash balances. The deal is expected to close early June 2007.In addition, the Company announced today that it has entered into an agreement to terminate its bare-boat charter for the Handymax tanker Invincible (DWT 47,084 built 1992), after sale of the vessel from its Lessors to a third party. The deferred gain from the original sale of approximately $2.4 million will be recognized in the second quarter of 2007.
Subject to the accounting treatment relating to the acquisition cost, the Company expects the re-acquisition and the termination of the five bare-boat contracts to have an accretive effect on both its cash flow from operations and earnings per share.