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Four Capesize vessels ordered
from new Korea Shipyard Co
Quintana Maritime purchases four Capesize newbuilds
Quintana Maritime Limited (NASDAQ: QMAR) announced today that it
has agreed to purchase four 180,000 deadweight-ton (dwt) Capesize
vessels, through a joint venture with AMCI Cape Holdings LLC ("AMCIC"),
an affiliate of Hans Mende, who is a member of Quintana's Board of
Directors. The vessels are being built at Korea Shipyard Co., Ltd., a
new South Korean shipyard, with delivery expected from May to August
of 2010. The contract cost of the four vessels is $310.8 million.
Quintana expects to nominate shipowning companies in which it will own
a 50% interest to purchase the vessels, and the remaining 50% will be
owned by AMCIC. The Company will pay approximately $31.1 million,
$46.7 million and $77.7 million in 2007, 2009, and 2010, respectively,
and will control 50% of the shipowning companies. Stamatis Molaris,
President and Chief Executive Officer of Quintana Maritime, commented,
"Through the joint-venture structure, the Company will minimize cash
flow dilution during the vessels' construction period without
stretching its balance sheet's ability to deliver profitable growth.
We are very pleased to have concluded this joint venture with AMCIC."
The Company will collect, from April 27, 2007 until the delivery of
the vessel, $60,000 per annum per ship from AMCIC as management fees
for supervising the construction of the vessels. Upon delivery, the
Company will manage the ships on behalf of the joint venture, and the
shipowning companies will pay QMAR a management fee based on the
Company's budgeted management costs, subject to adjustment in certain
circumstances.
The Company's Conflicts Committee, which comprises three of the
Company's independent, non-executive directors, has approved the
transaction.
The Company has secured five-year charters for two of the vessels from
their delivery at a net daily average floor rate of approximately
$27,720, with 50% profit sharing above the floor rate (based on the
monthly AV4 BCI average, as published by the Baltic Exchange) with EDF
Trading, a wholly owned subsidiary of EDF, one of the largest utility
companies in Europe. EDF trades on Euronext under the ticker "EDF."
Stamatis Molaris, President and Chief Executive Officer of Quintana
Maritime, commented, "We are very pleased to have concluded our
current expansion in the Capesize sector through the new building
market by signing the last four contracts at attractive prices. We
have increased the Company's presence in the Capesize sector to 12
ships, including the four ships currently trading. Upon delivery of
all new buildings we will operate one of the most modern cape fleets
in the dry bulk industry. He further commented "We are also welcoming
the growing relationship with one of the major users of commodities in
Europe, EDF. Our charters with EDF will generate in excess of $240
million over the life of the charters, assuming only the average net
floor rate. We believe that we have further enhanced the earnings and
return for our shareholders by ensuring that 2010 will be another year
of strong returns and profitability. We are looking forward to
developing our relationship with this particular investment grade
customer. The particular structure of the time charter contract
insulates our shareholders from downside market risk but provides
significant cash flow upside potential in the active Capesize sector."
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