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TBS International Limited Announces the Acquisition of a Handymax Bulk Carrier and Reports the Disposal of One of Its Multipurpose Tweendeck Vessels
| Source: TBS International Limited
HAMILTON, BERMUDA -- (MARKET WIRE) -- May 9, 2007 -- TBS International Limited (NASDAQ : TBSI )
reported today the following:
1. The Acquisition of the Bulk Carrier M.V. Yakima
2. The Constructive Total Loss of the M.V. Huron Maiden
M.V. YAKIMA
TBS entered into an agreement to acquire the M.V. Yakima, a 42,475 dwt
handymax bulk carrier built in 1990. TBS agreed to acquire the vessel
charter free for $29.0 million. The vessel is expected to be delivered to
TBS between July 7, 2007 and October 7, 2007.
M.V. HURON MAIDEN
The M.V. Huron Maiden, a 23,300 dwt multipurpose tweendecker, built in
1983, was declared as a constructive total loss after it grounded on an
uncharted rock formation off the coast of Singapore near her loading
location on March 9, 2007. The vessel was enroute to North China, where its
time charter was scheduled to conclude. Part of her cargo was discharged to
assist in refloating the vessel, while the remainder was discharged on
site, and the entire cargo was returned to the point of loading. The
vessel then proceeded to Singapore under tug escort for further damage
inspections.
On April 4, 2007, the vessel was declared a constructive total loss.
Accordingly, TBS expects to receive a net amount of $8.0 million from its
Hull & Machinery/ Increased Value (H&M/ IV) insurances and retain the
proceeds of selling the vessel for scrap. The vessel was sold and delivered
to the buyer on May 4, 2007 for $2.5 million on an "as is, where is basis."
TBS also spent approximately $1 million to mitigate damages. The
depreciated value of the M.V. Huron Maiden was about $3.7 million, although
at the time of the loss it had a market value of about $11.0 million. TBS
expects to use the insurance and sale proceeds to reduce its outstanding
revolving credit line.
Following the acquisition of the M.V. Yakima, and the constructive total
loss of the M.V. Huron Maiden, TBS' fleet will be comprised of 34 vessels
in total, including 18 multipurpose and a combination of 16 handysize and
handymax bulk carriers, with an aggregate of 1,035,469 dwt.
Joseph E. Royce, Chairman, Chief Executive Officer and President, stated:
"The grounding of the M.V. Huron Maiden was an unfortunate accident to
which we reacted professionally by deploying internal resources as well as
outside experts. We were able to limit the impact to physical damage to the
vessel with no personal injury, pollution or other damage to the
environment. Our handling of this unfortunate incident is a testimony to
our company's ability to manage adversity in a manner that safeguards our
crews, the environment, our customer interests, and affirms our reputation
of providing optimum service to our clients.
"We are pleased to announce the acquisition of the M.V. Yakima, another
step in the expansion and renewal of our bulk carrier fleet, which upon
delivery of the M.V. Yakima will be comprised of 16 handysize and handymax
bulk carriers.
"We are confident about TBS's growth prospects and, as already announced,
we have embarked on a program to build six new multipurpose vessels thereby
ensuring our fleet renewal and expansion for the long term.
"In the meantime, we proceed on schedule with the implementation of our
intensive drydock and vessel upgrade program which ensures that our fleet
continues to adhere to the highest standards of operational efficiency and
safety. In addition, the retrofitting of two of our bulk carriers with
retractable tweendecks into multipurpose vessels is expected to improve our
ability to handle the needs of our expanding customer base and the
increasing volume of cargoes we transport."
About TBS International Limited
TBS is an ocean transportation services company that offers worldwide
shipping solutions through liner, parcel and bulk services, and vessel
chartering. TBS has developed its business around key trade routes between
Latin America and China, Japan and South Korea, as well as select ports in
North America, Africa and the Caribbean. TBS provides frequent regularly
scheduled voyages in its network, as well as cargo scheduling, loading and
discharge for its customers.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. You are hereby
cautioned that these statements may be affected by certain factors, among
others, set forth below and in TBS's filings with the Securities and
Exchange Commission, and consequently, actual operations and results may
differ materially from the results discussed in the forward-looking
statements. Among the factors that could cause actual results to differ
materially from those indicated by forward-looking statements is the
ability of the buyer and seller of the vessel to satisfy customary
conditions to our obligation to purchase the vessel. Other factors that
could affect TBS's operations and results are discussed in TBS's filings
with the Securities and Exchange Commission. TBS undertakes no obligation
to update any forward-looking statements, whether as a result of new
information, future events, or otherwise.
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