Saga Tankers pushes the exit button

Saga Tankers pushes the exit button(Oct 21 2011)

Saga Tankers is to withdraw from shipping and sell its remaining VLCCs.
A proposal to cease shipping operations will be put to an extraordinary general meeting to be held on 10th November.

Saga Tankers has already agreed the sale of the VLCCs ‘Saga Julie’ and ‘Saga Agnes’ (built 2000) to Greek interests for $30.5 mill net each. The sale of the ‘Saga Julie’ is outright and free from any subjects, while the sale of the ‘Saga Agnes’ is subject to approval of Saga Tankers’ general meeting.

The full sales proceeds from both vessels, plus the value of bunkers and lubes, will be used to deleverage the company. The first vessel will be delivered to the buyer during November 2011, while the second will be delivered upon completion of her timecharter in July/August 2012.
The buyer will lodge a deposit of 15% of the sales price in a joint account until the vessel is delivered.

As a result, Saga Tankers will make an extraordinary repayment under its loan facility of $13 mill. Following the sale of the vessels and repayments of the loan, total outstanding debt under the company's loan facility will be $21 mill attributable to the company's remaining VLCC, ‘Saga Agnes’.

The loan will be amortised by $1.2 mill per quarter until delivery in July/August 2012.
In the third quarter 2011 financial report, the company said that it will make a write down on the book value of ‘Saga Julie’ of $27.5 mill following the sale, and the same amount following the forward sale of ‘Saga Agnes’.

The sale of ‘Saga Unity’, reported in Tanker Operator news of 17th October, will result in a write down of $28.6 mill.

Saga Tankers said that the steps taken following the decline in ship values saved the company from breaching financial covenants under its loan agreement. As a result, the company is no longer in discussions with its lenders over its debts.

The board said that it unanimously recommended the general meeting to approve the sale of ‘Saga Agnes’. Following the sale, the company will no longer be involved in shipping.
The sale will only be completed if two thirds of the votes cast are in favour of the proposal, the company pointed out.

Following the completion of a potential sale of the vessel ‘Saga Agnes’, the board said that it will make proposals regarding the company's future business and operations.
This may relate to the development of a new strategy, a change of the description of the business in the articles of association since it will no longer be engaged in the shipping business, or possibly dissolve the company and consequently pay out shareholder values as a dividend.