TOP Ships Inc. Announces Agreement to Acquire Nine ECO MR Product Tanker Newbuildings with Time Charter Employment and Potential Gross Revenue Backlog of about $679 million
TOP Ships Inc. (the “Company”), an international owner and operator of modern, fuel efficient “ECO” tanker vessels, announced that it has entered into an agreement with an entity affiliated with the Company’s Chief Executive Officer, (“the Seller”), to acquire 100% of the issued and outstanding shares of nine Marshall Islands companies (the “SPVs”), counterparties to ship building contracts for nine very-high specification 47,499 dwt Medium Range (“MR”) product/chemical oil tankers with Guangzhou Shipyard International Company Limited, scheduled for delivery during 2028 and 2029.
The ship building contracts’ effectiveness is subject to the issuance of customary refund guarantees and the acquisition of the SPVs is subject to conclusion of financing arrangements. Specifically, the SPVs are currently finalizing lease financing agreements (the “Financings”) with two major Chinese leasing companies, one being ABC Financial Leasing Co., Ltd. or its controlled entities, covering the majority of the ship building contracts’ price for all nine vessels. The Financings were arranged by the Seller and their conclusion is subject to customary closing conditions, including the provision of the Company’s corporate guarantee to the leasing companies.
The Seller has also secured time charter employment with a major oil trader, for all vessels, starting from their delivery and for a firm duration of seven years, with charterer’s option to extend for four additional years.
The total potential gross revenue backlog from these contracts, including optional years, is about $679 million.
The Company has agreed to acquire the shares of all SPVs for an aggregate purchase price of about $41 million and due to the related party nature of the acquisition, the transaction was 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 relating to the consideration of this transaction from an independent financial advisor.
TOP Ships Announces Amendment of Time Charter at a Higher Daily Rate
TOP Ships Inc. (the “Company” or “TOP Ships”) (NYSE American:TOPS), an international owner and operator of modern, fuel efficient “ECO” tanker vessels, announced that it has amended the time charter agreement for its Suezmax tanker vessel M/T Eco Oceano with Central Tankers Chartering Inc. (the “Charterer”), a company affiliated with the Company’s CEO, Director and major shareholder, Evangelos J. Pistiolis.
The duration of the amended time charter is 5 years starting from January 1, 2026 and the time charter rate has been increased to $30,000 per day. Prior to the amendment, the duration of the time charter was until March 2037 and the time charter rate was $24,500 per day. As part of the amendment the Charterer has a purchase option exercisable only during February 2027 for $70 million.
The amendment was approved by an independent committee of the board of directors which obtained a fairness opinion from an independent financial advisor.
Top Ships Announces Termination of ATM Program of $19.7 Million
TOP Ships Inc. (the “Company”), an international owner and operator of modern, fuel efficient “ECO” tanker vessels, announced that it has given notice to terminate the equity distribution agreement for the sale of the Company’s common shares up to an aggregate amount of $19.7 million (the “Agreement”) with Maxim Group LLC in an “at-the-market” equity offering program (the “ATM”). The Company will make no further sales under the ATM. Net proceeds from sales under the ATM amounted to approximately $2.0 million.
TOP Ships Announces a 412% Increase in Net Income for the Six Months Ended June 30
TOP Ships Inc., an international owner and operator of modern, fuel efficient “ECO” tanker vessels, announced its unaudited financial results for six months ended June 30, 2022.
For the six months ended June 30, 2022, the Company reported:
– Total revenues of $38.8 million (53% increase from 1st half 2021)- Net Income of $8.6 million (412% increase from 1st half 2021)- Adjusted EBITDA of $26.9 million* (88% increase from 1st half 2021)- Total Assets of $475.4 million (44% increase from December 31, 2021)
Evangelos Pistiolis, the President, Chief Executive Officer and Director of the Company, said:
“We are very happy to report a dramatic year-on-year increase in net income for the six months ended June 30, 2022, which represents our highest reported net income for a six month period since 2005″.
TOP Ships Inc. Announces Corporate Developments
TOP Ships Inc., an international owner and operator of modern, fuel efficient “ECO” tanker vessels, announced today that it has concluded its previously announced sale of the MR2 product tanker Eco City of Angels to unaffiliated third parties. The related secured financing has been prepaid in full and the cash proceeds of the sale amount to about $9.4 million, before fees and expenses relating to the sale.
Finally, as of the date of this release 7,200,000 Series F Preferred Shares have been issued.
TOP Ships Inc. is an international ship-owning company.
Top Ships Inc. Announces Delivery of 1st VLCC, Sale of 2 Product Tankers and Fully-Funded Status of Current Newbuilding Program with New Sources of Capital
TOP Ships Inc. (the “Company”), an international owner and operator of modern, fuel efficient “ECO” tanker vessels, announced 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 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.
Top Ships Inc. Announces Delivery of Suezmax M/T Eco Malibu
TOP Ships Inc., an international owner and operator of modern, fuel efficient “ECO” tanker vessels, announced that it took delivery of the very high specification, scrubber fitted, 157,000 dwt newbuilding Suezmax vessel M/T Eco Malibu constructed at the Hyundai Heavy Industries shipyard in South Korea. The vessel is scheduled to commence by the end of the week 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 $63.3 million. For 2021 alone, this charter is expected to contribute $7.8 million in revenue.
TOP Ships Inc. Announces Delivery of Suezmax M/T Eco West Coast
TOP Ships Inc., an international owner and operator of modern, fuel efficient “ECO” tanker vessels, announced today that it took delivery of the very high specification, scrubber fitted, 157,000 dwt newbuilding Suezmax vessel M/T Eco West Coast constructed at the Hyundai Heavy Industries shipyard in South Korea. The vessel 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 $63.3 million. For 2021 alone, this charter is expected to contribute $9.3 million in revenue.
Evangelos Pistiolis, the President and Chief Executive Officer of the Company, said:
“The M/T Eco West Coast, is the first of 5 crude oil vessel carriers of our newbuilding program. One more Suezmax is expected to be delivered during May 2021 and 2 VLCCs and 1 Suezmax are expected to be delivered during the first quarter of 2022. In line with our strategy, all vessels are of very high specification, fitted with scrubbers, constructed at Hyundai Shipyards in South Korea and are contracted to commence profitable time charter employment contracts, mainly to major oil traders, upon their delivery from the shipyard.
The two suezmax vessels delivered in 2021 alone have an expected revenue backlog, assuming all options are exercised, of about $126.6 million and are expected to contribute $17.1 million in 2021 revenue.
As of April 1, 2021, the expected revenue backlog of our fleet for the fixed period of our time charters, stands at about $255 million, including partially owned vessels at their respective percentages. As of the same date, the Company’s projected charter coverage is as follows:
Source: TOP Ships Inc.
Top Ships Inc. Announces Pricing of $15.9 Million Common Shares Registered Direct Offering
TOP Ships Inc. announced yesterday that it has entered into a placement agency agreement with Maxim Group LLC relating to the sale of the Company’s common shares (the “Placement Agency Agreement”). Pursuant to the Placement Agency Agreement, the Company entered into a securities purchase agreement with certain institutional investors in connection with a registered direct offering of an aggregate of 158,640,000 common shares at a public offering price of $0.10 per share (the “Registered Offering”). The aggregate gross proceeds of the Registered Offering is $15.9 million. The Registered Offering is expected to close on or about July 9, 2020, subject to the satisfaction of customary closing conditions.
Maxim Group LLC is the sole placement agent in connection with the offering.
The common shares are being offered pursuant to a shelf registration statement on Form F-3 (File No. 333-234281) previously filed and declared effective by the United States Securities and Exchange Commission (“SEC”). A prospectus supplement relating to the offering will be filed by the Company with the SEC. When filed, copies of the prospectus supplement, together with the accompanying base prospectus, can be obtained at the SEC’s website at http://www.sec.gov or from the offices of Maxim Group LLC, 405 Lexington Avenue, New York, New York 10174, Attn: Prospectus Department, or by telephone at (212) 895-3745.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. Any offers of securities will be made only by means of a prospectus supplement and accompanying base prospectus.
TOP Ships Inc. Announces Purchase of 50% Interests in Two 2020-Built Scrubber-Fitted Eco MR Product Tankers and Joint Venture With Gunvor Group
TOP Ships Inc., an international owner and operator of modern, fuel efficient “ECO” tanker vessels, announced that it has acquired from a company affiliated with the Company’s Chief Executive Officer (the “Seller”) a 50% interest in two vessel owning companies (the “SPCs”) that own two ultra-high specification scrubber-fitted 50,000 dwt eco MR product tankers, M/T Eco Yosemite Park and M/T Eco Joshua Park for $27 million. Both vessels were delivered in March 2020 from Hyundai Mipo shipyard of South Korea.
The acquisitions 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 relating to the consideration paid in this transaction from an independent financial advisor.The Company also announced that the Seller had already entered into two joint venture agreements, for the two vessels, each with an equal ownership interest of 50%, with Just-C Limited, a wholly owned subsidiary of Gunvor Group Ltd (the other 50% owner), one of the world’s largest independent commodities trading houses by turnover.
Each of the two product tankers have time charters with Clearlake Shipping Pte Ltd, a subsidiary of Gunvor Group Ltd and one of the largest charterers of tanker vessels in the world, for a firm term of five years plus two additional optional years. The total potential gross revenue backlog from these contracts is about $91.7 million.
Finally the vessels have a five year non-amortizing senior financing agreement in place from a major Greek bank for approximately 45% of their charter-free value.