General Maritime Corporation
today announced that a leading international trading company has exercised its option to time charter three additional Aframax OBO vessels for two years. The contracts for the these three vessels will provide net voyage revenue to General Maritime in the first year of approximately $21 million and could provide an additional $21 million in the second year through the exercising of the charterer's option. If the charterer does not exercise the option, General Maritime has the option to extend the time charter for an additional year, which would generate net voyage revenue of approximately $17 million. The time charters for these three vessels will commence upon delivery of the vessels, expected to occur between November 2003 and February 2004.
Peter C. Georgiopoulos
, Chairman, Chief Executive Officer and President, commented, "We are extremely pleased to have been able to opportunistically lock-in three additional vessels at highly profitable rates and provide significant secured revenue to our shareholders for the next two years. The recent time charter contracts we have signed demonstrates the advantages of our flexible fleet deployment strategy. By exercising discipline and only engaging vessels on time charters that meet our strict return requirements, we are able to continue to benefit from strong rate environments and achieve substantial downside protection."
The exercising of these three options is part of a previously announced decision to time charter up to nine Aframax OBO vessels. Including these three most recent contracts, the charterer has now signed seven of the nine time charters, which will guarantee net voyage revenue to General Maritime of approximately $49 million in year one. In year two, General Maritime is guaranteed a minimum of approximately $40 million and could earn as much as $49 million. The charterer also has an option to time charter two additional Aframax OBO vessels, for a total of nine vessels. The exercising of these two remaining options would provide the Company additional net voyage revenue of $14 million, in year one, for total fixed net voyage revenue of approximately $63 million in year one for all nine vessels. These two time charters may be extended for an additional year on similar terms to the seven vessels.
Including the most recent three charters, General Maritime has 14 of its 46 vessels, or 30% of its fleet, on time charter contracts.