General Maritime sells tankers to S'pore company February 12 2006 NEW YORK, Sun: General Maritime Corp, the second-largest US tanker owner, agreed to sell nine ships to Singapore's Tanker Pacific for US$247.5 million (US$1 = RM3.74) in an effort to reduce the age of its fleet and modernise it. A net gain of US$16.6 million is expected from the sale, New York-based General Maritime said last Friday in a statement. Proceeds from the sale will be used to pay down debt, a possible share buyback or to fund acquisitions, the company said. The sale of the Aframax tankers, which are all a type that can carry either oil, ore or dry bulk cargo, will reduce General Maritime's fleet to 17 vessels, according to a list of ships on the company's website. Last year General Maritime sold 17 older ships. The average age of the nine tankers sold to Tanker Pacific is about 14 years. Aframax OBO tankers can carry about 600,000 barrels of oil. "We remain committed to actively looking for acquisition opportunities and once again grow our fleet," General Maritime chief executive officer Peter Georgiopoulos said in the statement. The nine tankers sold were "non-core assets" that would help cut the age of the company's fleet, he said. JPMorgan Chase & Co shipping analyst Jon Chappell in a note to clients last Friday said the sale will further modernise the company's fleet, although it will negatively affect earnings in the near term. He cut his 2006 earnings per-share estimate to US$2.65 from US$3.35 and his 2007 estimate to US$1.70 from US$2.35. "We see the asset sales as a positive strategic move for General Maritime as it now operates a more modern fleet," Chappell said in the note. "However, it also places General Maritime in a state of limbo. Unless the company can expand its fleet, speculation over General Maritime being an acquisitioncandidate is bound to start circulating," Chappell said. The company also announced the closing of its office in Piraeus, Greece, leaving it with offices in London, Lisbon, Spain and its headquarters in New York. "With the sale of the nine vessels, we decided to streamline our operations based on our current fleet size," president John Tavlarios said in the statement. - Bloomberg