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• Specifically, we have received waivers from HSH Nordbank and Alpha Bank on certain covenant breaches until 31 March 2010, representing approximately 54.6% of our total indebtedness. • We have agreed to receive waivers, subject to completion of legal documentation, from DVB and Emporiki Bank on covenant breaches until 31 March 2010, representing 30.6% of our total indebtedness. • We are currently in discussions with RBS regarding waivers until 31 March 2010. • We took delivery of five out of six of our newbuilding product tankers. Our final newbuilding is scheduled to be delivered during the second quarter of 2009. • In April 2009, we agreed with the owners of the M/T Relentless to terminate the bareboat charter. Under this agreement, during the 3rd quarter of 2009 we will redeliver the M/T Relentless to its owners and pay a termination fee of $2.5m. The bareboat charter would have expired in 2012. • Finally we are continuing our efforts to unwind the remaining bareboat charter-in contracts in order to further reduce our leasing expenditure.” Fleet Report: As of March 31, 2009, the Company’s fleet consisted of sixteen vessels, or 0.9 million dwt (including eleven owned and five vessels sold and leased back for a period of five to seven years) as compared to twenty three vessels, or 2.1 million dwt on March 31, 2008 (including twelve owned, one under capital lease and ten vessels sold and leased back for a period of five to seven years). On February, 2009, the Company took delivery of the vessels Miss Marilena and Lichtenstein from SPP Plant & Shipbuilding Co., Ltd of the Republic of Korea. Miss Marilena and Lichtenstein are the two out of six 50,000 dwt product / chemical tankers to be delivered within the first and second quarter of 2009. Miss Marilena and Lichtenstein entered into a bareboat time-charter employment for a period of ten years at a daily rate of $14,400 and $14,550, respectively. On March 19, 2009, the Company took delivery of the vessels Ionian Wave and Tyrrhenian Wave from SPP Plant & Shipbuilding Co., Ltd of the Republic of Korea. Ionian Wave and Tyrrhenian Wave are the third and fourth out of six 50,000dwt product / chemical tankers to be delivered within the first and second quarter of 2009. Ionian Wave and Tyrrhenian Wave entered into a bareboat time-charter employment for a period of seven years at a daily rate of $14,300, with three successive one-year options at a higher daily rate. On May 22, 2009, the Company took delivery of the vessel Britto from SPP Plant & Shipbuilding Co., Ltd of the Republic of Korea. Britto is the fifth out of six 50,000dwt product / chemical tankers to be delivered within the first and second quarter of 2009. Britto entered into a bareboat time-charter employment for a period of ten years at a daily rate of $14,550. Fleet Deployment: Tanker Vessels: During the first quarter of 2009, seven of the Company’s Handymax tankers operated under long-term employment contracts that provide for a base rate and additional profit sharing earning on average $17,204 per vessel per day on a time charter equivalent (TCE) basis, including profit-sharing allocated to the Company and four under bareboat charter earning on average $13,990 per vessel per day. Drybulk Vessels: During the first quarter of 2009, four of the Company’s drybulk vessels operated under time charter contracts earning on average $40,590 per vessel per day on a time charter equivalent (TCE) basis and one under bareboat charter earning on average $49,489 per vessel including the amortization of the fair value of acquired time charter contracts of $26,077 per vessel per day. Liquidity and Capital Resources Since the Company’s formation, the sources of funds have been cash from operations, long-term borrowings and equity provided by the shareholders. The Company’s principal use of funds has been capital expenditures to establish and grow its fleet, maintain the quality of its vessels, comply with international shipping standards and environmental laws and regulations, fund working capital requirements and make principal repayments on outstanding served loan facilities. The Company expects to rely upon operating cash flows, long-term borrowings and equity financings to implement its future growth plan. As of March 31, 2009, the Company had total indebtedness under senior secured credit facilities of $398.3 million (excluding unamortized financing fees of $4.3 million) with its lenders, the Royal Bank of Scotland (“RBS”), HSH Nordbank (“HSH”), DVB Bank (“DVB”), Alpha Bank (“ALPHA”) and Emporiki Bank (“EMPORIKI”), maturing from 2013 through 2019. The Company’s non-restricted cash as of March 31, 2009 was $13.3 million. Loan Covenants and Discussions with Banks As at March 31, 2009, the Company was not in compliance with certain of its loan covenants. As of the date of this release, the Company had received certain waivers on these covenant breaches until 31 March 2010 from HSH Nordbank and Alpha Bank, representing approximately 54.6% of total indebtedness as set forth below HSH Nordbank The Company has entered into amendatory agreements with HSH Nordbank under its Bulker Financing Facility, initial amount of $95m / outstanding as of March 31, 2009 of $51.1m, and the Product Tanker Financing Facility, initial amount of $121m / outstanding as of March 31, 2009 of $92.8m. These amendatory agreements mainly provide for: (1) waiver regarding financial covenants through March 31, 2010, except for adjusted net worth for which a waiver has not been received yet (2) waiver for asset coverage covenants through March 31, 2010 (3) an increased applicable margin; (4) an amendment fee; (5) cross collateralisation of the two facilities. Alpha Bank The Company has entered into amendatory agreements with Alpha Bank under its Bulker Financing Facility, initial amount of $48m / outstanding as of March 31, 2009 of $34.8m, and the Product Tanker Financing Facility of $39m. These amendatory agreements mainly provide for: (1) a waiver regarding financial and asset coverage covenants through March 31, 2010; (2) an increased applicable margin; (3) cross collateralisation of the two facilities. In addition, the Company has agreed with DVB and Emporiki Bank to receive waivers until 31 March 2010, representing approximately 30.6% of total indebtedness. The agreements are preliminary and are subject to execution of definitive documents whereby certain terms of the existing financing agreements, will be amended. Finally, the Company is currently in discussions with RBS in order to receive waivers until 31 March 2010. The outcome of these discussions remains unknown. Due to the fact that the Company has not yet reached definitive agreements with all its banks with regards to covenant breaches, it has in this release an unclassified balance sheet which does not show a breakdown of its debt and swap facilities into current and long term. If the Company receives waivers from all its lenders then the debt and swap facilities would be classified as current and long term portions based on when the installments fall due. If the Company cannot obtain covenant waivers from all of its lenders, all outstanding loan balances will be classified as current as a result of cross default covenants attached to all loan agreements. In addition, the Company may be in non-compliance with these or other covenants, such as minimum liquidity, in future quarters to the extent it has not received waivers for such non-compliance. If the Company is not able to obtain covenant waivers or modifications, for current covenant breaches or for covenant breaches that may occur in future reporting periods, its lenders may require the Company to post additional collateral, enhance its equity and liquidity, increase its interest payments or pay down its indebtedness to a level where it is in compliance with its loan covenants, sell vessels, or they may accelerate its indebtedness, which would impair its ability to continue to conduct its business. In order to further enhance its liquidity, the Company may find it necessary to sell vessels at a time when vessel prices are low, in which case it will recognize losses and a reduction in its earnings, which could affect its ability to raise additional capital necessary for the Company to comply with its loan covenants and/or the additional lender requirements described above. About TOP Ships Inc. TOP Ships Inc., formerly known as TOP Tankers Inc., is an international provider of worldwide seaborne crude oil and petroleum products and drybulk transportation services. The Company operates a combined tanker and drybulk fleet as follows: • A fleet of twelve double-hull handymax tankers, with a total carrying capacity of approximately 0.6 million dwt, of which 76% are sister ships. Seven of the Company's handymaxes are on time charter contracts with an average term of ten months with all of the time charters including profit sharing agreements above their base rates. Five of the Company’s handymax tankers are fixed on a bareboat charter basis with an average term of eight and a half years. • One newbuilding product tanker, which is expected to be delivered in 2009. The expected newbuilding has fixed rate bareboat employment agreement for a period of ten years. • A fleet of five drybulk vessels with a total carrying capacity of approximately 0.3 million dwt, of which 47% are sister ships. All of the Company's drybulk vessels have fixed rate employment contracts for an average period of 23 months. Top Ships Press Release |
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TOP SHIPS REPORTS FIRST QUARTER 2009 FINANCIAL RESULTS