General Maritime Corporation and Arlington Tankers Ltd. to Merge in a Stock-for-Stock Combination, to Create a $2.0 Billion Ente
06 Agosto 2008 - 7:00AM
PR Newswire (US)
Strategic Combination to Create Leading Crude and Products Tanker
Company Focused on Achieving a Sizeable Fixed Dividend and
Capitalizing on Growth Opportunities NEW YORK and HAMILTON,
Bermuda, Aug. 6 /PRNewswire-FirstCall/ -- General Maritime
Corporation (General Maritime) (NYSE:GMR) and Arlington Tankers
Ltd. (Arlington Tankers) (NYSE:ATB) jointly announced today that
they have entered into a definitive agreement whereby the two
companies will combine in a stock- for-stock combination. Under the
terms of the definitive agreement, approved unanimously by the
Boards of Directors of both General Maritime and Arlington Tankers,
shareholders of General Maritime will receive 1.340 shares of the
combined company for each share of General Maritime held, and
shareholders of Arlington Tankers will receive one share of the
combined company for each share of Arlington Tankers held. The
combination will create a leading publicly traded tanker company
and represents a highly strategic transaction for shareholders of
both General Maritime and Arlington Tankers. Some of the key
highlights of the combined company include: -- Modern, diverse
fleet of 31 vessels (approximately 4.0 million dwt) with an average
age of 8.0 years with a presence in both crude and product segments
-- Management team with significant consolidation experience --
Attractive balance between time charter and spot exposure to
provide earnings and cash flow stability while allowing for
additional upside from stronger tanker rates -- Significant
contracted revenue stream: approximately $450 million of revenues
contracted through 2013 -- Improved financial flexibility to invest
in growth, with a cash dividend target of $2.00 per share annually
-- Stronger platform for growth and well-positioned to be a leading
consolidator in the industry -- Combined market capitalization of
approximately $1.1 billion, and a combined enterprise value of
approximately $2.0 billion Peter Georgiopoulos, Chairman, President
and Chief Executive Officer of General Maritime, commented, "In
merging General Maritime and Arlington Tankers, we have entered
into a significant value creating transaction for the shareholders
of both companies. We believe the new Company's large diverse
double-hull fleet, combined with its balanced chartering strategy,
will offer shareholders stable cash flows as well as upside
potential to the products and crude tanker markets. The combined
company will further differentiate itself by having a sizeable
fixed dividend target while retaining capital for growth. This
approach, together with a strong financial position, bodes well for
management to draw upon its considerable consolidation experience
to capitalize on growth opportunities that meet strict return
requirements. We believe our focus on growth, as well as the
anticipated cash cost savings of the transaction, will position the
combined company to increase earnings and pay substantial dividends
to shareholders over the long-term." "General Maritime is the ideal
partner to increase value for Arlington Tankers' shareholders,"
said Ed Terino, Chief Executive Officer, President and Chief
Financial Officer of Arlington Tankers. "The combination of General
Maritime and Arlington Tankers provides significant opportunities
for long- term growth in shareholder value as a result of the
larger and more-diverse fleet, stronger financial position and
highly experienced team to actively manage and further expand the
fleet. Complementing the combined company's focus on fleet and
earnings growth, I am pleased that our shareholders will have the
opportunity to continue to receive attractive dividends supported
by a balanced chartering strategy and a sizeable revenue stream."
The combined company, to be named General Maritime Corporation,
will be headquartered in New York City. Shares in the combined
company will continue to be listed on the NYSE and trade under the
ticker symbol "GMR". Existing shareholders of General Maritime will
own approximately 73% of the combined company and the existing
shareholders of Arlington Tankers will own approximately 27% of the
combined company. The combined company will be led by Peter
Georgiopoulos as Chairman, John Tavlarios as President, Jeffrey
Pribor as CFO and John Georgiopoulos as Executive Vice President,
Treasurer and Secretary. General Maritime intends to discuss with
Mr. Terino a consulting arrangement for assistance in the
post-closing transition period. The Board of Directors of the
combined company will consist of the six current General Maritime
directors and one director from Arlington Tankers. Together,
General Maritime and Arlington Tankers are expected to generate
revenue of approximately $353 million and EBITDA of approximately
$235 million on a pro forma basis for 2008E. The combined company
is expected to generate cash cost savings of approximately $7.5
million, as well as cost reductions relating to the General
Maritime executive transition, in the first year of operations. The
combined company expects to establish an initial annual dividend
target, subject to determination by the combined company's Board,
of $2.00 per share, with additional upside through synergies and
continued growth. Both General Maritime and Arlington Tankers have
the support of their existing bank groups and have received
preliminary approvals to roll-over their respective debt
facilities. Peter Georgiopoulos concluded by saying, "In leading
the combined Company, we intend to be steadfast in our pursuit of
creating value for shareholders over the long-term. In seeking to
accomplish this critical objective, we will draw upon management's
past success, which includes returning over $1 billion to
shareholders and achieving total returns of 180% since going public
in 2001. We are excited about the prospects of the combined company
and will actively seek opportunities to grow the combined company's
strong portfolio of assets, while maintaining a stable dividend
return to our enlarged shareholder base." The transaction is
subject to the approval of the shareholders of both General
Maritime and Arlington Tankers. Closing of the transaction is also
subject to customary closing conditions and regulatory approvals,
including expiration of the waiting period under Hart-Scott Rodino
Act and similar approvals in other jurisdictions. The transaction
is expected to close in the fourth quarter of 2008. Both General
Maritime and Arlington Tankers are expected to pay their separate
dividends for the third quarter of 2008, with the dividend for the
fourth quarter of 2008 expected to be the first dividend paid by
the combined company. General Maritime also announced that, as
noted above, contingent upon the closing of the proposed
transaction, it expects Peter Georgiopoulos to remain as Chairman
of the company and to step down as President and CEO with John
Tavlarios becoming President of General Maritime. As Chairman, Mr.
Georgiopoulos will continue to focus on strategy and transactional
operations of the company. The company expects to achieve
substantial cash cost savings for salary and support expenses in
connection with this transition, and to make a payment to Mr.
Georgiopoulos in connection with the termination of his employment
agreement and as a bonus for 2008. Further details regarding these
matters can be found in a Current Report on Form 8-K to be filed by
General Maritime today. UBS Investment Bank acted as financial
advisor and Kramer Levin Naftalis & Frankel LLP acted as legal
advisor to General Maritime. Jefferies & Company acted as
financial advisor and Wilmer Cutler Pickering Hale and Dorr LLP
acted as legal advisor to Arlington Tankers. Conference Call
Information General Maritime and Arlington Tankers plan to host a
joint conference call at 10:30 a.m. ET on Wednesday, August 6,
2008. All interested parties are invited to call in to +1
877-852-6573 within the United States or +1 719-325-4772 for
international participants. A live webcast of the conference call
and accompanying slide presentation will be available on General
Maritime's website at http://www.generalmaritimecorp.com/ in the
Investor Relations Webcasts and Presentations section. The webcast
will be available commencing Friday August 8, 2008 for 90 days and
requires Windows Media Player. An audio replay of the conference
call will be available commencing Friday, August 8, 2008 through
Friday, August 22, 2008 by calling +1 888-203-1112 within the
United States or +1 719-457-0820 for international callers. The
password for the replay is 6820046. Press and Investor Contacts:
For General Maritime: For Arlington Tankers: Jeffrey D. Pribor
Edward Terino Executive Vice President and CFO CEO, President and
CFO General Maritime Arlington Tankers +1 (212) 763-5600 +1 (203)
221-2765 Important Additional Information About This Transaction
Will Be Filed With The SEC In connection with the proposed
transaction, General Maritime and Arlington Tankers will file with
the SEC a Registration Statement on Form S-4 and General Maritime
and Arlington Tankers will file with the SEC and mail to their
respective shareholders a Joint Proxy Statement/Prospectus in
connection with the proposed transaction. Investors and security
holders are urged to read the Joint Proxy Statement/Prospectus
regarding the proposed transaction carefully when it becomes
available because it will contain important information about
General Maritime, Arlington Tankers, the proposed transaction and
related matters. You may obtain a free copy of the Joint Proxy
Statement/Prospectus (when available) and other related documents
filed by General Maritime and Arlington Tankers with the SEC at the
SEC's website at http://www.sec.gov/. The Joint Proxy
Statement/Prospectus (when it is filed) and the other documents may
also be obtained for free by accessing General Maritime's website
at http://www.generalmaritimecorp.com/ or by accessing Arlington
Tankers' website at http://www.arlingtontankers.com/. General
Maritime and Arlington Tankers, and their respective directors and
executive officers, may be deemed to be participants in the
solicitation of proxies with respect to the transactions
contemplated by the merger agreement. Information regarding General
Maritime's directors and executive officers is contained in General
Maritime's Annual Report on Form 10-K for the fiscal year ended
December 31, 2007 and its proxy statement dated April 11, 2008,
which are filed with the SEC. Information regarding Arlington
Tankers' directors and executive officer is contained in Arlington
Tankers' Annual Report on Form 10-K for the fiscal year ended
December 31, 2007 and its proxy statement dated April 23, 2008,
which are filed with the SEC. In addition, Mr. Georgiopoulos will
receive benefits in connection with the executive transition
discussed above as further described in the Report on Form 8-K to
be filed by General Maritime today that is referenced above, and
General Maritime intends to discuss with Mr. Terino a consulting
arrangement for assistance in the post-closing transition period as
referenced above. Furthermore, the Board of Directors of Arlington
Tankers is contemplating the award of a bonus to Mr. Terino in the
amount of $750,000 pursuant to Arlington Tankers' 2008 Bonus Plan.
A more complete description of such arrangements will be available
in the Registration Statement and the Joint Proxy
Statement/Prospectus. Further information regarding expected
revenues and EBITDA of the combined company can be found in
materials to be filed with the SEC today. About General Maritime
Corporation General Maritime Corporation is a provider of
international seaborne crude oil transportation services
principally within the Atlantic basin which includes ports in the
Caribbean, South and Central America, the United States, West
Africa, the Mediterranean, Europe and the North Sea. They also
currently operate tankers in other regions including the Black Sea
and Far East. General Maritime Corporation currently owns and
operates a fleet of 21 tankers - ten Aframax, and eleven Suezmax
tankers with a carrying capacity of approximately 2.7 million dwt.
About Arlington Tankers Ltd. Arlington Tankers Ltd. is an
international, seaborne transporter of crude oil and petroleum
products. Arlington Tankers' fleet consists exclusively of eight,
modern double-hulled vessels and is one of the youngest tanker
fleets in the world, with an average vessel age of approximately
4.7 years. The fleet consists of two V-MAX tankers, which are
specially designed very large crude carriers, two Panamax tankers
and four Product tankers. All of Arlington Tankers' vessels are
employed on long-term time charters. Arlington Tankers was
incorporated in Bermuda in September 2004. Arlington Tankers
completed its initial public offering on the New York Stock
Exchange on November 10, 2004. "Safe Harbor" Statement Under the
Private Securities Litigation Reform Act of 1995 This press release
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 management's
current expectations and observations. Included among the important
factors that, in General Maritime's and Arlington Tankers' view,
could cause actual results to differ materially from the forward
looking statements contained in this press release are the
following: the ability to obtain the approval of the transaction by
Arlington Tankers' and General Maritime's shareholders; the ability
to obtain governmental approvals of the transaction or to satisfy
other conditions to the transaction on the proposed terms and
timeframe; the ability to realize the expected benefits to the
degree, in the amounts or in the timeframe anticipated; the ability
to integrate Arlington Tankers' businesses with those of General
Maritime in a timely and cost-efficient manner; changes in demand;
a material decline in rates in the tanker market; changes in
production of or demand for oil and petroleum products, generally
or in particular regions; greater than anticipated levels of tanker
newbuilding orders or lower than anticipated rates of tanker
scrapping; changes in rules and regulations applicable to the
tanker industry, including, without limitation, legislation adopted
by international organizations such as the International Maritime
Organization and the European Union or by individual countries;
actions taken by regulatory authorities; changes in trading
patterns significantly impacting overall tanker tonnage
requirements; changes in the typical seasonal variations in tanker
charter rates; changes in the cost of other modes of oil
transportation; changes in oil transportation technology; increases
in costs, including, without limitation: crew wages, insurance,
provisions, repairs and maintenance; changes in general domestic
and international political conditions; changes in the condition of
General Maritime's or Arlington Tankers' vessels or applicable
maintenance or regulatory standards (which may affect, among other
things, the combined company's anticipated drydocking or
maintenance and repair costs); changes in the itineraries of
General Maritime's or Arlington Tankers' vessels; the fulfillment
of the closing conditions under, or the execution of customary
additional documentation for, General Maritime's agreements to
acquire vessels, and other factors listed from time to time in
General Maritime's or Arlington Tankers' filings with the
Securities and Exchange Commission, including, without limitation,
their respective Annual Reports on Form 10-K for the year ended
December 31, 2007 and their respective subsequent reports on Form
10-Q and Form 8-K. The ability of General Maritime, Arlington
Tankers, or the combined company to pay dividends in any period
will depend upon factors including applicable provisions of law and
the final determination by the Board of Directors each quarter
after its review of the combined company's 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 from the amounts currently
estimated. General Maritime and Arlington Tankers disclaim any
intention or obligation to update any forward-looking statements as
a result of developments occurring after the date of this document.
DATASOURCE: General Maritime Corporation; Arlington Tankers Ltd.
CONTACT: Jeffrey D. Pribor, Executive Vice President and CFO of
General Maritime, +1-212-763-5600; Edward Terino CEO, President and
CFO of Arlington Tankers, +1-203-221-2765 Web site:
http://www.generalmaritimecorp.com/
http://www.arlingtontankers.com/
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