TOP Ships Inc. (the “Company”), an international owner and operator
of modern, fuel efficient "ECO" tanker vessels, announced today the
delivery of the very high-specification, scrubber-fitted, 300,000
dwt newbuilding Very Large Crude Carrier (VLCC) vessel M/T Julius
Caesar constructed at the Hyundai Heavy Industries shipyard in
South Korea. The vessel has commenced its previously announced time
charter employment with a major oil trader for three years with two
yearly extensions at the charterer’s option. The revenue backlog
expected to be generated by this fixture, assuming all options are
exercised, is about $68.8 million. For 2022 alone, this charter is
expected to contribute $12.5 million in revenue.
Sale of 2 Product Tankers
The company also announced today that it has
entered into an agreement to sell to unaffiliated third parties its
2 MR product tankers M/T Eco Los Angeles and M/T Eco City of
Angels. The vessel sales are subject to customary closing
conditions and are anticipated to be concluded during the first
quarter of 2022.
Depending on when the closing of the sales take
place, the Company estimates net proceeds after debt repayment of
about $17.5 million and intends to use these funds towards its
current newbuilding program, including repayment of the Unsecured
Financing described below.
Secured Financing of Newbuilding Vessels
In relation to the delivery of M/T Julius
Caesar, the Company drew down $54.0 million from its secured credit
facility (in the form of a sale and leaseback transaction) with a
major international financier entered into in November 2021, and
has bareboat chartered back the vessel for a period of eight years
at a bareboat hire rate consisting of 32 consecutive quarterly
installments of $0.7 million and a balloon payment of $32.4 million
payable together with the last installment, plus interest based on
the 3 months USD LIBOR (or the applicable LIBOR replacement rate),
plus 2.60% per annum. As part of this transaction, the Company has
continuous options to buy back the vessels at purchase prices
stipulated in the bareboat agreements. The facility contains
customary financial and other covenants including with respect to a
change in voting control of the Company.
The Company has in place a facility with the
same financier with substantially similar terms for the M/T Legio X
Equestris (Hull No. 3214) which is expected to be delivered during
the 1st quarter of 2022.
The Company also announced that it has entered
into a non-binding term sheet with a major international financier
for up to $48.4 million for the financing, in the form of sale and
leaseback, of the newbuilding vessel M/T Eco Oceano CA (Hull No.
871), subject to credit committee approval. According to the terms,
the credit facility will be repayable in 40 consecutive quarterly
installments of $0.7 million commencing from the date of delivery
of the vessel, plus a balloon installment equal to $20.4m. The
credit facility will bear interest based on the 3 months USD LIBOR
(or the applicable LIBOR replacement rate), plus a margin of 3.50%
per annum.
Subject to the approval of the termsheet
relating to the financing of the M/T Eco Oceano CA, in combination
with the Unsecured Financing and the sale of Series F Preferred
Shares described below, the Company’s remaining newbuilding
program, consisting of the VLCC vessel M/T Legio X Equestris (Hull
No. 3214) and the Suezmax vessel M/T Eco Oceano CA (Hull No. 871),
will be fully funded.
Unsecured Financing
The Company also announced that it has entered
into an unsecured credit facility for up to $20 million with an
affiliate of its CEO in order to finance part of the shipbuilding
cost of the 2 VLCCs. To date, $9 million has been drawn down.
The company shall repay the principal amount of
this facility in cash via one or multiple installments at its
discretion by December 31, 2022. The principal terms of the loan
include an arrangement fee of 2%, interest of 12% per annum and a
commitment fee of 1.00% on the undrawn part of the facility.
Series F Non-Convertible Perpetual Preferred
Shares
In January 2022, the Company entered into a
stock purchase agreement with an affiliate of its CEO (the “Buyer”)
for the sale of up to 7,560,759 newly-issued Series F
Non-Convertible Perpetual Preferred Shares, par value $0.01, to the
Buyer, in exchange for (i) the assumption by the Buyer of an amount
of $48.0 million of shipbuilding costs for its newbuilding vessels
M/T Eco Oceano CA (Hull No. 871), M/T Julius Caesar and M/T Legio X
Equestris (Hull No. 3214), and (ii) settlement of the Company’s
remaining payment obligations relating to the acquisition in
September 8, 2021 of an additional 65% ownership interest in the
newbuilding contracts for its 2 VLCCs, in an amount of up to $27.6
million. As of the date of this release 1,800,160 Series F
Preferred Shares have been issued.
The Series F Preferred Shares have the following
characteristics:
Voting. The holders of
Series F Preferred Shares are entitled to the voting power of ten
(10) of our common shares per Series F Preferred Share. The
holders of Series F Preferred Shares and the holders of common
shares shall vote together as one class on all matters submitted to
a vote of shareholders. Except as required by law, the holders of
Series F Preferred Shares have no special voting rights and their
consent shall not be required for taking any corporate action.
Distributions. Upon any
liquidation, dissolution or winding up of our Company, the holders
of Series F Preferred Shares shall be entitled to receive the net
assets of the Company pari passu with the Common Shares.
Redemption. The
Company at its option shall have the right to redeem a portion or
all of the outstanding Series F Preferred Shares. Upon an optional
redemption, the Company shall pay an amount equal to $10 per Series
F Preferred Share redeemed (the “Liquidation Amount”), plus a
redemption premium of 20% of the Liquidation Amount. The Series F
Preferred Shares include a mandatory redemption provision tied to
minimum ownership requirements for the Company’s major
shareholders, including affiliates of the CEO, including payment of
a redemption premium, as detailed in the Certificate of Designation
for the Series F Preferred Shares.
Dividends. The holders of
outstanding Series F Preferred Shares shall be entitled to receive
semi-annual dividends payable in cash at a rate of 13.5% per year
of the Liquidation Amount of the then outstanding Series F
Preferred Shares. In addition, a one-time cash dividend equal to
4.0% of the Liquidation Amount is payable to the Buyer 30 days
following the issuance of Series F Preferred Shares.
Ranking. All shares of Series F
Preferred Shares shall rank pari passu with the Company’s common
shares.
The terms of the entry into the unsecured
financing and the sale of Series F Preferred Shares were approved
by a special committee composed of independent members of the
Company's board of directors (the “Transaction Committee”). The
Transaction Committee obtained a fairness opinion from an
independent financial advisor for each transaction.
About TOP Ships Inc.
TOP Ships Inc. is an international ship-owning
company.
For more information about TOP Ships Inc., visit
its website: www.topships.org.
Forward-Looking Statements
Matters discussed in this press release may
constitute forward-looking statements. The Private Securities
Litigation Reform Act of 1995 provides safe harbor protections for
forward-looking statements in order to encourage companies to
provide prospective information about their business.
Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements, which are other than
statements of historical facts.
The Company desires to take advantage of the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995 and is including this cautionary statement in
connection with this safe harbor legislation. The words “believe,”
“anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,”
“potential,” “may,” “should,” “expect” “pending” and similar
expressions identify forward-looking statements. The
forward-looking statements in this press release are based upon
various assumptions, many of which are based, in turn, upon further
assumptions, including without limitation, our management's
examination of historical operating trends, data contained in our
records and other data available from third parties. Although we
believe that these assumptions were reasonable when made, because
these assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible
to predict and are beyond our control, we cannot assure you that we
will achieve or accomplish these expectations, beliefs or
projections.
Contact:
Alexandros TsirikosChief Financial OfficerTOP Ships Inc.Tel: +30
210 812 8107Email: atsirikos@topships.org
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