Overview
In September 1995, the Company offered and sold to the public 11,731,613 Warrants at the initial public offering price of $5.00 per Warrant. The exercise price of a Warrant was $10.21. Prior to the Exercise Date (September 30, 1997), the Company did not have any operations other than certain limited operations related to the acquisition of the Vessels, of which all three were delivered in the last half of 1997. The Company now owns three modern double hull 150,000 dwt suezmax tankers. The Vessels were built at Samsung Heavy Industries.
On September 30, 1997 all of the outstanding Warrants of the Company were exercised at an exercise price of $10.21 per Warrant. The Company received a total of $119,779,768.73 by issuing a total of 11,731,613 new Common Shares. On November 30, 1998, the Company’s shareholders approved a proposal to allow the Company to borrow money for the purpose of repurchasing its Shares. On December 28, 1998, the Company purchased 2,107,244 Shares through a “Dutch Auction” self-tender offer at a price of $12.50 per Share. In addition, the Company paid $715,000 in transaction costs. After the repurchase, a total of 9,706,606 Shares are in issue, down from 11,813,850 Shares. The Company funded the repurchase with the proceeds of a long-term loan from a syndicate of international lenders in the total amount of $30,000,000.
BP Shipping Ltd (the “Charterer”) has agreed to charter each Vessel for a period of seven years from September 30, 1997. Each Charter is subject to extension at the option of the Charterer for up to seven successive one-year periods. During the term of each Charter (including any extension thereof) the Charterer is obligated to pay (i) the Base Rate, which is charterhire at a fixed minimum daily rate of $13,500 per Vessel per day (T/C equivalent of $22,000 per day), payable quarterly in advance and (ii) Additional Hire, to the extent spot charter rates exceed certain levels, payable quarterly in arrears, from January 1998. The amount of Additional Hire for each quarter, if any, will be determined by the Brokers Panel.
On January 5, 2001 the Company received $3,645,000 in Base Hire from the Charterer for the period from January 1 to March 31, 2001. In April 2001 the Broker Panel determined that the Additional Hire for the period January 1 to March 31, 2001 was $7,994,018 i.e. $29,607 per day per Vessel. The hire rate for the 1st quarter was thus $43,107 per day per vessel.
On April 2, 2001 the Company received $3,685,500 in Base Hire from the Charterer for the period from April 1 to June 30, 2001. In July 2001 the Broker Panel determined that the Additional Hire for the period April 1 to June 30, 2001 was $3,572,587 i.e. $13,086 per day per Vessel. The hire rate for the 2nd quarter was thus $26,586 per day per vessel.
On July 2, 2001 the Company received $3,726,000 in Base Hire from the Charterer for the period from July 1 to September 30, 2001. In October 2001 the Broker Panel determined that the Additional Hire for the period June 1 to September 30, 2001 was $1,840,283 i.e. $6,668 per day per Vessel. The hire rate for the 3rd quarter was thus $20,168 per day per vessel.
On October 1, 2001 the Company received $3,726,000 in Base Hire from the Charterer for the period from October 1 to December 31, 2001.
Results of Operations
The Company’s revenues from the Charter Hire for the period January 1 to September 30, 2001 of $24,463,388 in total, derived from the Base Hire of $11,056,500($13,500 per day per Vessel) and the determined Additional Hire of $13,406,888 ($16,370 per day per Vessel).
Net costs during the Report Period were $5,530,258 of which nine months depreciation of the Vessels constitutes $5,123,280.
Net profit during the Report Period was $17,773,215.
Liquidity and Capital Resources
Total Assets of the Company at September 30, 2001 were $146,380,050 compared to $160,842,504 at December 31, 2000. Cash held at September 30, 2001 was $1,007,813.
Dividend Payment
Based on the additional hire of $10,228,286 for the 4th quarter 2000 and the minimum Base Hire for the 1st quarter of 2001, from January 1 to March 31, the Board of Directors declared in January 2001 a Dividend of $13,686,337 or $1.41 per Common Share. The dividend was paid to Shareholders in February 2001.
Based on the Additional Hire of $7,994,018 for the 1st quarter of 2001 and the minimum Base Hire for the 2nd quarter of 2001, from April 1 to June 30, the Board of Directors declared in April 2001 a Dividend of $11,550,861 or $1.19 per Common Share. The dividend was paid to Shareholders in May 2001.
Based on the Additional Hire of $3,572,587 for the 2nd quarter of 2001 and the minimum Base Hire for the 3rd quarter of 2001, from July 1 to September 30, the Board of Directors declared in July 2001 a Dividend of $6,988,756 or $0.72 per Common Share. The dividend was paid to Shareholders in August 2001.
Based on the Additional Hire of $1,840,283 for the 3rd quarter of 2001 and the minimum Base Hire for the 4th quarter of 2001, from October 1 to December 31, the Board of Directors declared in October 2001 a Dividend of $5,338,633 or $0.55 per Common Share. The dividend will be paid to Shareholders in November 2001.
The full report including tables can be downloaded from the following link: