The joint venture, called LauriTen Limited, will be owned 50:50 by TEN and Lauritzen Kosan A/S. TEN's equity contribution of approximately $10 million will be funded by cash reserves and approximately 220,000 newly issued TEN common shares.
The newly formed venture will acquire from Lauritzen Kosan A/S four modern medium-sized LPG tankers totalling 23,000 cbm with an average age of 5.7 years. Concurrent with the formation of LauriTen Limited, the joint venture will bare-boat charter its four ships back to Lauritzen Kosan A/S for twelve months, at an average of $18,750 per day in total.
"J. Lauritzen of Denmark, is one of the largest and most established names in the shipping industry," commented Nikolas Tsakos, President and CEO of TEN. "The gas market is expected to grow rapidly over the next several years. Entering into this market with a proven leader will help to ensure a successful endeavour as TEN invests its resources to expand its reach and evolve with the marketplace."
Following the initial period of twelve months, during which the joint-venture parties may further evaluate the medium size gas market, the agreement then provides the opportunity for the joint venture to participate in a substantial strategic expansion involving consolidation of the market.
"TEN remains dedicated to having a young and diversified fleet," Mr. Tsakos added. "The formation of this venture is further proof that our management team is focused on growing the business and providing value for our shareholders, by identifying accretive transactions in today's uncertain market environment."
TEN is also pleased to announce that Mr. Torben Janholt, President and Chief Executive Officer of the J. Lauritzen group, will be joining the board of directors of TEN as of October 1st, 2002. Mr. Janholt brings to the board of TEN the vast experience of operating more than 150 ocean going vessels.
Separately, TEN provided update on its newbuilding program, scheduled to conclude by the end of 2003. As of September 16, 2002, TEN has received three of its eleven expected newbuildings. Two of those vessels, the Opal Queen and Silia T, were fixed immediately on delivery on long-term time charters. A third, the Decathlon, was also fixed immediately on a repositioning voyage in the Atlantic and is generating income while negotiations continue to secure a favourable time charter fixture. Of the eleven newbuildings, financing has been arranged for eight at competitive rates, and initial discussions are in progress with banks relating to the remaining vessels to be delivered in the second half of 2003. The Company will provide further guidance on the fleet as deliveries are received and new charters are secured.