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EX-99.1 - EX-99.1 - Euronav MI II Inc. | y03616exv99w1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 3, 2010
GENERAL MARITIME CORPORATION
(Exact Name of Registrant as Specified in Charter)
Republic of the Marshall Islands | 001-34228 | 66-071-6485 | ||
(State or Other Jurisdiction | (Commission File Number) | (I.R.S. Employer | ||
of incorporation) | Identification No.) |
299 Park Avenue New York, NY (Address of Principal Executive Offices) |
10171 (Zip Code) |
Registrants telephone number, including area code: (212) 763-5600
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement
Vessel Acquisition Agreements
On June 3, 2010, General Maritime Corporation (the Company) entered into agreements to purchase
seven tankers, consisting of five VLCCs built between 2002 and 2010 and two Suezmax newbuildings
from subsidiaries of Metrostar Management Corporation (Metrostar) for an aggregate purchase price
of approximately $620 million. The purchases are subject to additional documentation and customary
closing conditions and the vessels are expected to be delivered between July 2010 and April 2011.
One of the VLCCs under these agreements is currently employed under a time charter with an
expiration date of January 2011 at a gross rate of $32,500 per day. Another VLCC is currently
employed under a time charter with an expiration date of February 2011 with a six month renewal
option at a gross rate of $33,500 per day and $41,000 per day for the option period. The Company
expects to take delivery of these two VLCCs with the associated time charter contracts. In this
connection, the Company expects to obtain the approval of the charterers to novate the associated
time charter contracts prior to their delivery. Two other VLCCs are currently employed under time
charters with expiration dates of September 2010. The Company expects to take delivery of these two
other VLCCs in October 2010 after expiration of the time charters.
The obligations of the parties under the acquisition agreements are subject to the completion of an
equity issuance by the Company as well as the Company obtaining necessary financing, in each case
on or prior to June 24, 2010. The purchase agreements provided that, in the event the Company is
unable to raise the full amount of the purchase price, it is obligated to purchase vessels in an
amount equal to the financing raised. The Company understands that the condition that it obtain
necessary financing has been satisfied by its entry into a Commitment Letter for a Proposed New
Credit Facility with a maximum borrowing amount of $372 million, which is discussed further below.
The Company is seeking an amendment to its existing 2005 Credit Facility in order to incur
indebtedness in connection with the proposed vessel acquisitions. The Company has been in
discussions with its lenders and anticipates that such an amendment will be entered into during the
second quarter of 2010. In the event that the Company is unable to complete an equity issuance or
enter into or borrow under the Proposed New Credit Facility, the Companys ability to complete the
proposed vessel acquisitions will be materially adversely affected. There can be no assurance that
the Company will enter into the Proposed New Credit Facility, or that if the Company does so, that
it will be able to borrow all or any of the amounts committed thereunder. The Company may be
liable for damages if the proposed vessel acquisitions fail to close as a result of the Companys
unwillingness, inability or other failure to pay the purchase price under the acquisition
agreements.
Item 7.01. Regulation FD Disclosure.
Attached and incorporated herein by reference as Exhibit 99.1 is a copy of a press release of the
Company reporting entry into the Acquisition Agreements and the Commitment Letter described below.
The information set forth under Item 7.01, including Exhibit 99.1 attached hereto, shall not be
deemed filed for purposes of Section 18 of the Securities Act of 1934, as amended, nor shall such
information be deemed incorporated by reference in any filing under the Securities Act of 1933, as
amended, except as shall be expressly set forth by specific reference in such filing.
Item 8.01. Other Events.
Proposed New Credit Facility
In connection with proposed vessel acquisitions, on June 8, 2010, the Company entered into a
commitment letter (the Commitment Letter) with Nordea Bank Finland plc, New York Branch
(Nordea) and DnB NOR Bank ASA to serve as joint lead arrangers and joint bookrunners of a new
$372 million senior secured credit facility (the Proposed New Credit Facility) primarily to fund
a portion of the purchase price for the vessels to be acquired. Nordea will serve as sole
administrative agent and collateral agent for the Proposed New Credit Facility. The Commitment
Letter contemplates a five-year $372 million senior secured credit facility, which would be
comprised of a senior secured delayed-draw term loan facility in the aggregate principal amount of
up to $372 million, $50 million of which would convert to a revolving credit facility. The Company
plans to borrow the full amount under the Proposed New Credit Facility for the proposed vessel
acquisitions.
A newly formed subsidiary of the Company would be the borrower under the Proposed New Credit
Facility and the Company and certain of its subsidiaries would guarantee the borrowers obligations
thereunder. The Proposed New Credit Facility would have a maturity date of five years after the
date on which definitive documentation for the facility is executed, and borrowings under the
facility would bear interest at LIBOR plus an applicable margin of 3.0%. The Commitment Letter
contemplates that the Proposed New Credit Facility will limit the amount of dividends that the
Company is permitted to declare or pay in respect of any fiscal year to an aggregate of $30
million. The Proposed New Credit Facility is also expected to require the Company to comply with a
number of customary covenants, including financial covenants related to liquidity, consolidated net
worth, and collateral maintenance; delivery of quarterly and annual financial statements and annual
projections; maintaining adequate insurances; compliance with laws (including environmental);
compliance with ERISA; maintenance of flag and class of the initial vessels; restrictions on
consolidations, mergers or sales of assets; limitations on liens; limitations on additional
indebtedness; restrictions on paying dividends; prohibitions on transactions with affiliates; and
other customary covenants.
The Proposed New Credit Facility is subject to definitive documentation and customary closing
conditions; accordingly, no assurance can be given that the Proposed New Credit Facility will be
procured on the terms, including the amount available to be borrowed, described above, or at all.
Proposed Change in Dividend Policy
In connection with the potential financing transactions for the proposed vessel acquisitions and
the restrictions on dividends contemplated by the Commitment Letter, the Company expects its board
of directors to approve a change in the Companys quarterly dividend policy for the Companys
common stock to reduce the Companys current fixed quarterly target dividend of $0.125 per share to
a fixed target amount such that the aggregate amount the Company shall pay or declare during any
fiscal year shall not exceed $30 million.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. | Description | |
99.1
|
Press Release dated June 9, 2010. |
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
This Current Report on Form 8-K contains forward-looking statements made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking
statements are based on managements current expectations and observations. Included among the
factors that, in the
Companys view, could cause actual results to differ materially from the forward looking statements
contained in this Current Report on Form 8-K are the following: the fulfillment of the closing
conditions under, or the execution of customary additional documentation for, the Companys
agreements to acquire vessels; completion and funding of financing on acceptable terms; and other
factors listed from time to time in the Companys filings with the Securities and Exchange
Commission, including, without limitation, its Annual Report on Form 10-K for the year ended
December 31, 2009 and its subsequent reports on Form 10-Q and Form 8-K. The Companys ability to
pay dividends in any period will depend upon factors including applicable provisions of Marshall
Islands law, restrictions under the Companys existing Credit Facility and indenture governing the
Companys Senior Notes and the final determination by the Board of Directors each quarter after its
review of the Companys financial performance. The timing and amount of dividends, if any, could
also be affected by factors affecting cash flows, results of operations, required capital
expenditures, or reserves. As a result, the amount of dividends actually paid may vary. The
Companys dividend policy may be changed at any time by its Board of Directors.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, General Maritime
Corporation has duly caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
GENERAL MARITIME CORPORATION DATE: June 9, 2010 |
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By: | /s/ Jeffrey D. Pribor | |||
Jeffrey D. Pribor | ||||
Executive Vice President, Chief Financial Officer |
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