Navios Maritime Acquisition Corporation has signed a securities purchase agreement that contemplates the acquisition of a fleet of seven VLCC tankers for an aggregate purchase price of $587.0 million. Navios Acquisition intends to finance the acquisition as follows: $453 million with bank debt, $123 million with cash, and $11.0 million through the issuance of Navios Acquisition shares.
Final purchase price is subject to customary working capital adjustments, and consummation of the transaction is subject to a number of conditions, including third-party consents. The transaction is anticipated to close in September 2010.
Angeliki Frangou, chairman and chief executive officer of Navios Acquisition, said, “We are pleased to enter into this transformational transaction so shortly after having our original business combination approved. Only 90 days ago, Navios Acquisition was a concept. Upon closing this transaction, Navios Acquisition will control 20 tanker vessels plus options to acquire two additional vessels. This acquisition alone will increase our fleet by almost 296% in dwt. Most importantly, with estimated annual base EBITDA of almost $75 million plus profit sharing, we anticipate the acquisition will be immediately accretive to our results.
“This acquisition represents a strategic expansion into the crude tanker sector,” Frangou said. “These new capabilities will increase our reach within the oil transportation industry and enable multiple cross selling opportunities. We also anticipate opening an office in Asia to facilitate these new relationships and take advantage of the emerging Asian markets.”
Of the seven VLCC vessels being acquired, six are operating under long-term time charters to Asia-Pacific-based shipping and petrochemical groups, including DOSCO (a wholly owned subsidiary of COSCO), a member of the Sinochem group, Formosa and SK Shipping. The seventh vessel is being constructed with delivery scheduled for June 2011.The VLCC fleet has an average age of 8.6 years and a remaining charter-out term of 8.8 years with an average charter rate of $40,440 net per day. Five of the seven charters have a profit sharing mechanism that provides potential upside.