Arlington Tankers Acquires Product Tankers

Arlington Tankers Ltd. has completed the acquisition of two modern 47,000 deadweight tonne double-hulled Product tankers from the Stena Group for an aggregate purchase price of $92 million. The new vessels, Stena Contest and Stena Concept, were built in 2005. With the delivery of the two new vessels, Arlington's eight-vessel fleet now consists of four Product tankers, two Panamax tankers and two V-MAX tankers. In conjunction with the purchase, Arlington has entered into fixed rate charter hire agreements with Stena Bulk AB for both vessels. The charters provide for an initial period of three years, at a rate commencing at $19,765 per day for the first year, $20,043 per day for the second year, and $20,335 per day for the third year. At the end of the three-year period, both Arlington and Stena Bulk have the option to extend the charters for an additional 30 months. Arlington has also entered into vessel management agreements with Northern Marine Management Ltd. under which Northern Marine will provide technical management for both vessels for the term of the charters, at fixed rates commencing at $5,565 per day and increasing at 5% per year. Northern Marine is a wholly-owned subsidiary of Stena Group. In addition, as a result of the completion of the acquisition of the new vessels, Arlington's previously announced amendments to its existing vessel charter hire and management agreements have become effective. Arlington financed the purchase price for the vessels, plus transaction costs of approximately $2.5 million, with a drawdown under the Company's Loan Agreement with The Royal Bank of Scotland plc. As a result of this drawdown, Arlington's outstanding borrowings under the Loan Agreement are now approximately $229.5 million. The effective interest rate is approximately 5.38% per year.