Contact Information: Contacts: Company Contact: Gregory A. McGrath Chief Financial Officer Omega Navigation Enterprises, Inc. PO Box 272 Convent Station, NJ 07961 Tel. (551) 580-0532 E-mail: gmcgrath@omeganavigation.com www.omeganavigation.com Investor Relations / Financial Media: Nicolas Bornozis President Capital Link, Inc. 230 Park Avenue, Suite 1536 New York, NY 10169 Tel. (212) 661-7566 E-mail: nbornozis@capitallink.com www.capitallink.com
Omega Navigation Enterprises, Inc. Announces Agreement to Acquire Two Ice Class Panamax Product Tankers Expanding Its Fleet to Eight Vessels
| Source: Omega Navigation
PIRAEUS, GREECE -- (MARKET WIRE) -- February 12, 2007 --Omega Navigation Enterprises, Inc. (NASDAQ : ONAV ) (SGX: ONAV50), a provider of global marine transportation services
focusing on product tankers, announced today that it has agreed to acquire
two newbuilding Ice Class 1A Panamax product tankers. The vessels, which
will be named the "Omega Emmanuel" and the "Omega Theodore" upon their
delivery to the Company, each have a capacity of approximately 73,000 dwt.
and are both currently under construction at STX Shipbuilding Co., South
Korea.
The "Omega Emmanuel" is expected to be delivered on March 23, 2007 and the
"Omega Theodore" is expected to be delivered on April 26, 2007. Following
the delivery of these vessels, Omega Navigation will have a fleet of eight
product carriers with a combined cargo carrying capacity of approximately
512,358 dwt. The Company also has options to acquire two additional double
hull Ice Class 1A product carriers currently under construction which are
expected to be available for delivery between August and September 2007.
The agreed purchase price of the "Omega Emmanuel" and the "Omega Theodore"
is $64.5 million per vessel. The acquisitions will be funded with
internally generated cash and commercial bank debt totaling $60 million per
vessel. The balance will be funded by a $4.5 million, zero coupon warrant
issued to the seller for each vessel, which will convert into Omega Class A
common shares, no earlier than March 31, 2009.
The warrants will convert at a minimum price of $18 per share or at a price
equal to the average market trading price during the 15 business days prior
to the conversion date, less 8%, whichever is higher. The $18 per share
conversion price represents a 16% premium to the closing price of the
Company's Class A common shares, as of the market close Friday, February
09, 2007, and also a premium to the Company's IPO price of $17 per share.
The maximum number of shares to be issued to the warrant holders will be
250,000 Class A common shares per vessel. To the extent that the average
market price during the 15 days preceding the conversion is below $18 per
share, the Company has capped its downside exposure to a maximum amount of
$500,000 per vessel, payable in cash, while maintaining an unlimited upside
should the average trading price of the shares be above $18 per share. The
warrants are non interest bearing, will not be entitled to dividends and
have no voting rights. The Company's strategy will be to employ these
vessels via fixed period charters, as is the case with the existing fleet,
at a time when management believes the vessels' characteristics are fairly
reflected in the time charter rates offered by the charterers.
George Kassiotis, President and CEO of Omega, commented: "The acquisition
of these vessels is a continuation of the Company's commitment to the
product tanker sector. The acquisition of this new type of vessel offers
the Company access to the niche Panamax ice class market, which we believe
has significant upside potential, while still offering maximum commercial
flexibility. It solidifies our position in this market and our status as
the only pure play product tanker company listed on a U.S. exchange. We
also continue to implement our strategy of investing in modern, high
quality assets, while at the same time increasing shareholder value."
About Omega Navigation Enterprises, Inc.
Omega Navigation Enterprises, Inc. is an international provider of global
marine transportation services through the ownership and operation of six
product tankers. The current fleet includes 6 double hull product tankers
with a total cargo-carrying capacity of 366,358 dwt. All six product
tankers are chartered out on 3 year period time charters. Furthermore, with
the delivery of the Omega Emmanuel and Omega Theodore mentioned above, the
Company will have eight product carriers with a combined cargo carrying
capacity of 508,758 dwt. The Company also has options to acquire two
additional double hull Ice Class 1A product carriers currently under
construction which are expected to be available for delivery between August
and September 2007.
The Company was incorporated in the Marshall Islands in February 2005. Its
principal executive offices are located in Piraeus, Greece and it also
maintains an office in the United States.
Omega Navigation's Class A common shares are traded on the NASDAQ National
Market under the symbol "ONAV" and are also listed on the Singapore
Exchange Securities Trading Limited under the symbol "ONAV 50."
Cautionary Statement Regarding 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," "except," "anticipate," "intends," "estimate," "forecast,"
"project," "plan," "potential," "will," "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, the Company's management's examination of
historical operating trends, data contained in the Company's records and
other data available from third parties. Although the Company believes 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 the Company's control,
the Company cannot assure you that the Company will achieve or accomplish
these expectations, beliefs or projections.
In addition to these important factors other important factors that, in the
Company's view, could cause actual results to differ materially from those
discussed in the forward-looking statements include the strength of world
economies and currencies, general market conditions, including fluctuations
in charter rates and vessel values, changes in demand for product tanker
and dry bulk shipping capacity, changes in the Company's operating
expenses, including bunker prices, drydocking and insurance costs, the
market for the Company's vessels, availability of financing and
refinancing, changes in governmental rules and regulations or actions taken
by regulatory authorities, potential liability from pending or future
litigation, general domestic and international political conditions,
potential disruption of shipping routes due to accidents or political
events, vessels breakdowns and instances of off-hires and other factors.
Please see the Company's filings with the Securities and Exchange
Commission for a more complete discussion of these and other risks and
uncertainties.