Energy Infrastructure Acquisition Corp. - Proxy Statement - Merger or Acquistion (preliminary) (PREM14A)

 

UNITED STATES

 

Check the appropriate box:

 

PROXY STATEMENT FOR SPECIAL MEETING OF STOCKHOLDERS

OF ENERGY INFRASTRUCTURE ACQUISITION CORP.

AND PROSPECTUS FOR SHARES OF COMMON STOCK AND WARRANTS

OF ENERGY INFRASTRUCTURE MERGER CORPORATION

 

Joint Proxy Statement/Prospectus dated         , 2008
and first mailed to stockholders on or about         , 2008

 

Dear Energy Infrastructure Stockholders:

 

You are cordially invited to attend a special meeting of stockholders, or the Special Meeting, of Energy Infrastructure Acquisition Corp., a Delaware corporation, or Energy Infrastructure, to be held at 10:00 a.m. Eastern standard time, on __, 2008, at _________________ New York, New York. At the meeting, you will be asked to consider proposals to approve the (i) redomiciliation of Energy Infrastructure as a Marshall Islands company through a merger with and into its wholly-owned Marshall Islands subsidiary, Energy Infrastructure Merger Corporation, or Energy Merger, in which Energy Merger will be the surviving corporation, which we refer to as the Redomiciliation Merger and (ii) the acquisition by Energy Merger of all the outstanding shares of nine companies from Vanship Holdings Limited, or Vanship, a global shipping company carrying on business from Hong Kong, which we refer to as the Business Combination. Each of the nine companies is a special purpose vehicle, or SPV, owning one very large crude carrier, or VLCC. VLCCs are tanker vessels used to transport crude oil.

 

On December 3, 2007, Energy Infrastructure, Energy Merger and Vanship entered into a Share Purchase Agreement, as subsequently amended and restated, which we refer to as the Share Purchase Agreement, pursuant to which Energy Merger will purchase all of the outstanding shares of each of the SPVs from Vanship in exchange for an aggregate purchase price of $778,000,000, consisting of $643,000,000 in cash (reduced by the aggregate amount of net indebtedness of the SPVs at the time of the completion of the Business Combination and subject to other closing adjustments) and 13,500,000 shares of common stock of Energy Merger. In addition to such purchase price, Energy Merger will be obligated to effect the transfer of 425,000 warrants of Energy Merger from one of Energy Infrastructure's initial stockholders to Vanship upon completion of the Business Combination and Vanship may receive an additional 3,000,000 shares of Energy Merger common stock following each of the first and second anniversaries of the Business Combination (6,000,000 shares in the aggregate), subject to certain annual earning criteria of the vessels in Energy Merger’s initial fleet, all as more particularly described in the joint proxy statement/prospectus. Energy Infrastructure and Energy Merger have entered into an Agreement and Plan of Merger, which we refer to as the Merger Agreement, pursuant to which Energy Infrastructure will merge with and into Energy Merger immediately prior to completion of the Business Combination.

 

In the event that shares of Energy Infrastructure’s common stock are redeemed in connection with the completion of the Business Combination, Energy Merger is offering for sale pursuant to this joint proxy statement/prospectus that number of shares of its common stock equal to the number of Energy Infrastructure shares that are redeemed ( up to 6,525,118 shares) at a price of $[  ] per share. If all 6,525,118 shares of Energy Merger common stock are sold pursuant to this offering, Energy Merger expects to receive gross proceeds from the offering of $[  ], less underwriting discounts and commissions of $[  ] per share, or underwriting discounts and commission of $[  ] in the aggregate, resulting in net proceeds to Energy Merger of $[  ].

 

Energy Infrastructure is a Business Combination Company ^TM , or BCC ^TM , which is a blank check company formed to acquire, through a merger, capital stock exchange, asset acquisition or similar business combination, one or more businesses that support the process of bringing energy, in the form of crude oil, natural and liquefied petroleum gas, and refined and specialized products (such as petrochemicals), from production to final consumption throughout the world. On July 21, 2006, Energy Infrastructure consummated its initial public offering of 20,250,000 units with each unit consisting of one share of its common stock and one warrant. Each warrant entitles the holder to purchase one share of Energy Infrastructure common stock at an exercise price of $8.00 per share. The units sold in Energy Infrastructure’s initial public offering were sold at an offering price of $10.00 per unit, generating gross proceeds of $202,500,000. Prior to the closing of Energy Infrastructure’s initial public offering, Energy Corp., a company formed under the laws of the Cayman Islands and controlled by Energy Infrastructure’s President and Chief Operating Officer purchased an aggregate of 825,398 units at a price of $10.00 per unit in a private placement, for aggregate gross proceeds of $8,253,980. On August 31, 2006 the underwriters of Energy Infrastructure’s initial public offering exercised their over allotment option to purchase an additional 675,000 units, generating an additional $6,750,000 in gross proceeds. This resulted in a total of $209,250,000 in net proceeds, including certain deferred offering costs and deferred placement fees being held in a trust account maintained by Continental Stock Transfer & Trust Company, which we refer to as the Trust Account. If Energy Infrastructure does not complete the Business Combination or another business combination transaction by July 21, 2008, Energy Infrastructure will be required to liquidate and, pending stockholder approval, it will distribute to all of the holders of its shares issued in its initial public offering, in proportion to their respective equity interests, an aggregate sum equal to the amount in the Trust Account, including any interest not previously released to Energy Infrastructure (net of any taxes payable and the repayment of convertible loans aggregating $2,685,000 if not earlier converted) , plus any remaining available assets. Energy Infrastructure’s officers and directors have waived their respective rights to participate in any liquidation distribution with respect to the 6,094,247 shares of common stock issued to them prior to Energy Infrastructure’s initial public offering, including the 825,398 shares of common stock acquired in the private placement, should Energy Infrastructure fail to consummate a business combination transaction. In the event of Energy Infrastructure’s liquidation, it would not distribute funds from the Trust Account with respect to the Energy Infrastructure warrants, which would expire worthless. A holder of shares of Energy Infrastructure common stock has the right to redeem such shares for cash if such stockholder votes against the Business Combination and, at the same time, elects that Energy Infrastructure redeem such shares for cash and the Business Combination is approved and completed. The actual per share redemption price will be calculated two business days prior to the consummation of the Business Combination. The redemption price would have been $10.09 per share, based on funds in the Trust Account as of September 30, 2007, though no assurance is given as to the actual redemption price, which could be lower than such amount. In order to exercise redemption rights, an eligible stockholder must vote against the Business Combination and elect to exercise redemption rights on the enclosed proxy card. If a stockholder votes against the Business Combination but fails to properly exercise redemption rights, such stockholder will not be entitled to have his/her shares redeemed for cash. Any request for redemption, once made, may be withdrawn at any time up to the date of the Special Meeting.

 

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This transaction is intended to be a qualifying "business combination" under Energy Infrastructure's certificate of incorporation, and as such, requires your approval. To that end, as described above, the Special Meeting will be held at 10:00 am; Eastern standard time, on _______ , 2008 at _______ New York, New York. At this important meeting you will be asked to consider and vote upon the following proposals:

 

a.   to approve and authorize the merger, pursuant to the Agreement and Plan of Merger entered into by and between Energy Infrastructure and its wholly−owned Marshall Islands subsidiary, Energy Merger, whereby Energy Infrastructure will merge with and into Energy Merger immediately prior to the Business Combination, with Energy Merger as the surviving corporation. We refer to this merger as the “Redomiciliation Merger” and this proposal as the “Redomiciliation Merger Proposal.” As a result of the Redomiciliation Merger: (i) the separate corporate existence of Energy Infrastructure will cease; (ii) each share of Energy Infrastructure common stock, par value $0.0001 per share, will be automatically converted into one share of Energy Merger common stock, par value $0.0001 per share; and (iii) each outstanding warrant of Energy Infrastructure will be assumed by Energy Merger with the same terms and restrictions, except that each will be exerciseable for common stock of Energy Merger, all as more particularly described in the joint proxy statement/prospectus.

 

b.   to approve and authorize the acquisition of nine SPVs, each owning one VLCC, by Energy Merger from Vanship pursuant to the Share Purchase Agreement among Energy Infrastructure, Energy Merger and Vanship. We refer to this acquisition as the “Business Combination” and this proposal as the “Business Combination Proposal.”

 

c.   to adjourn the Special Meeting to solicit additional proxies in the event Energy Infrastructure has not received the requisite stockholder vote to approve the Business Combination and the Redomiciliation Merger.

 

Pursuant to Energy Infrastructure's certificate of incorporation, Energy Infrastructure is required to obtain stockholder approval of the proposed Business Combination. The proposed Redomiciliation Merger, which would occur immediately prior to the Business Combination, would result in holders of Energy Infrastructure common stock and warrants automatically holding equivalent securities in Energy Merger. Energy Merger will continue as a reporting company under U.S. securities laws.

 

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If these proposals are approved:

 

·

Energy Infrastructure will merge into Energy Merger, effectively changing its corporate domicile from the State of Delaware to the Marshall Islands, which means it will be governed by the laws of the Marshall Islands;

 

·

Energy Merger will change its name to Van Asia Tankers Corporation;

 

·

Energy Merger will acquire nine SPVs, which together constitute an operating business;

 

·

the majority of Energy Merger’s directors following the closing of the Business Combination will be persons affiliated with or nominated by Vanship;

 

·

your rights as a stockholder will be subject to Energy Merger's articles of incorporation and bylaws;

 

·

each share of common stock of Energy Infrastructure will automatically convert into one share of common stock of Energy Merger; and

 

·

each outstanding warrant of Energy Infrastructure will be assumed by Energy Merger with the same terms, but exercisable for shares of common stock of Energy Merger.

 

Energy Infrastructure will not consummate the Redomiciliation Merger unless the Business Combination is also approved. Similarly, the Business Combination will not take place if the Redomiciliation Merger is not approved. Each of the Redomiciliation Merger Proposal and Business Combination Proposal will be voted on separately, but both must be approved for the Business Combination to be completed.

 

Your vote is important. Energy Infrastructure cannot complete the Redomiciliation Merger unless the holders of at least a majority of the issued and outstanding shares of common stock of Energy Infrastructure entitled to vote at the Special Meeting vote in favor of the Redomiciliation Merger. The affirmative vote of holders of at least a majority of Energy Infrastructure's common stock voted at the Special Meeting, provided that there is a quorum, will be required to approve the Business Combination Proposal. Energy Infrastructure's initial stockholders, who owned 5,268,849 shares of common stock prior to the initial public offering and private placement have agreed to vote all of their outstanding shares of common stock in accordance with the holders of a majority of the public shares voting on the Business Combination Proposal in person or by proxy at the meeting. If holders of a majority of the public shares vote for or against, or abstain with respect to, the Business Combination Proposal, the initial stockholders will cast all their shares in the same manner as such majority votes on such proposal. Holders of the common stock contained in the units purchased in the private placement and shares of common stock issued upon conversion of the convertible loans (to the extent converted) have agreed to vote such shares in favor of the Business Combination Proposal. Energy Infrastructure’s initial stockholders have agreed not to demand redemption of any shares acquired by them prior to the initial public offering.

 

In addition, each stockholder (other than Energy Infrastructure's initial stockholders, holders of the common stock contained in the units purchased in the private placement and holders of shares of common stock issuable upon conversion of the convertible loans (to the extent previously converted)) who votes against the Business Combination has the right to concurrently demand that Energy Infrastructure redeem his or her shares for cash equal to $10.00 per share, plus a portion of the interest earned not previously released to Energy Infrastructure (net of taxes payable). Energy Infrastructure will not be permitted to consummate the Business Combination if holders of 6,525,119 or more of the shares purchased in Energy Infrastructure's initial public offering (which number represents 30% of the shares sold in Energy Infrastructure's initial public offering and the private placement) vote against the Business Combination and demand redemption of their shares. In the event that the Business Combination is not consummated, Energy Infrastructure may continue to seek an alternative target business.

 

Energy Infrastructure’s certificate of incorporation requires that it be dissolved if it does not consummate an eligible business combination by the later of (i) January 21, 2008 or (ii) July 21, 2008 in the event that either a letter of intent, an agreement in principle or a definitive agreement to complete an eligible business combination was executed but was not consummated by January 21, 2008. Energy Infrastructure entered into a letter of intent relating to a business combination on August 31, 2007 with Vanship, and the parties entered into a definitive purchase agreement on December 3, 2007, and, as a result, if Energy Infrastructure does not consummate a business combination by July 21, 2008, Energy Infrastructure will be required to dissolve and distribute to its public stockholders the amount in the Trust Account plus any remaining available assets.

 

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After completion of the Business Combination, assuming the issuance of 1,000,000 units to Energy Infrastructure's President and Chief Operating Officer (or any assignee thereof), the issuance of 5,000,000 units to Vanship in connection with the Business Combination Private Placement and the issuance of 268,500 units upon the conversion of convertible loans aggregating $2,685,000, if no stockholder exercises his or her redemption rights, and assuming no Energy Infrastructure warrants are exercised, Energy Infrastructure public stockholders alone will own approximately 44.5% of Energy Merger, its pre-Business Combination holders of common stock, including its public stockholders and its current officers and directors, will own approximately 60.6% of Energy Merger and Vanship will own approximately 39.4% of Energy Merger.

 

Energy Infrastructure's common stock and warrants are listed on the American Stock Exchange under the symbols EII and EII.WS. Energy Infrastructure expects the Energy Merger securities to be listed on the American Stock Exchange after the Business Combination.

 

After careful consideration of all relevant factors, Energy Infrastructure's board of directors has determined that these proposals are fair to and in the best interests of Energy Infrastructure and its stockholders, and has recommended that you vote or give instruction to vote " FOR " adoption of each of them.

 

Enclosed is a notice of Special Meeting and joint proxy statement/prospectus containing detailed information concerning the Business Combination, the other proposals and the Special Meeting. Whether or not you plan to attend the Special Meeting, we urge you to read this material carefully and vote your shares.

 

HOW TO OBTAIN ADDITIONAL INFORMATION

 

If you would like to receive additional information or if you want additional copies of this document, agreements contained in the appendices or any other documents filed by Energy Infrastructure with the Securities and Exchange Commission, such information is available without charge upon written or oral request. Please contact the following:

 

Energy Infrastructure Acquisition Corp.

Suite 1300, 1105 North Market Street

Wilmington, Delaware 19899

Attention: Mrs. Susan Dubb

Tel: (302) 656-1771

 

If you would like to request documents, please do so no later than              , 2008, to receive them before Energy Infrastructure’s Special Meeting. Please be sure to include your complete name and address in your request. Please see “Where You Can Find Additional Information” to find out where you can find more information about Energy Infrastructure and Energy Merger. You should only rely on the information contained in this joint proxy statement/prospectus in deciding how to vote on the Business Combination and Redomiciliation Merger. Neither Energy Infrastructure nor Energy Merger has authorized anyone to give any information or to make any representations other than those contained in this joint proxy statement/prospectus. Do not rely upon any information or representations made outside of this joint proxy statement/prospectus. The information contained in this joint proxy statement/prospectus may change after the date of this joint proxy statement/prospectus. Do not assume after the date of this joint proxy statement/prospectus that the information contained in this joint proxy statement/prospectus is still correct.

 

The place, date and time of the Energy Infrastructure Special Meeting is as follows:            , New York, New York, on                  , 2008 at 10:00 a.m.

 

We encourage you to read this joint proxy statement/prospectus carefully. In particular, you should review the matters discussed under the caption “RISK FACTORS” beginning on page 30 .

 

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Energy Infrastructure’s board of directors unanimously recommends that Energy Infrastructure stockholders vote “FOR” approval of the Redomiciliation Merger and the Business Combination and in the event Energy Infrastructure has not received the requisite stockholder vote to approve the Business Combination and the Redomiciliation Merger, approval of the proposal to adjourn the Special Meeting to solicit additional proxies.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued in the merger or otherwise, or passed upon the adequacy or accuracy of this joint proxy statement/prospectus. Any representation to the contrary is a criminal offense.

	Andreas Theotokis
	Chairman of the board of directors of Energy Infrastructure
	Acquisition Corp.

 

Wilmington, Delaware ,

             2008

 

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ENERGY INFRASTRUCTURE ACQUISITION CORP.

 

Suite 1300, 1105 North Market Street

Wilmington, Delaware 19899

Notice of Special Meeting of Energy Infrastructure Acquisition Corp. Stockholders

To Be Held on       , 2008

 

To Energy Infrastructure Stockholders:

 

A Special Meeting of stockholders of Energy Infrastructure Acquisition Corp., a Delaware corporation, or Energy Infrastructure, will be held at ___________, New York, New York on _________, 2008, at 10:00 a.m., for the following purposes:

 

a.   to consider and vote upon a proposal to adopt the Agreement and Plan of Merger, as such may be amended from time to time, by and between Energy Infrastructure and its wholly−owned Marshall Islands subsidiary, Energy Infrastructure Merger Corporation, or Energy Merger, whereby Energy Infrastructure will merge with and into Energy Merger, with Energy Merger as the surviving corporation. We refer to this merger as the “Redomiciliation Merger” and this proposal as the “Redomiciliation Merger Proposal.” As a result of the Redomiciliation Merger: (i) the separate corporate existence of Energy Infrastructure will cease; (ii) each share of Energy Infrastructure common stock, par value $0.0001 per share, will automatically be converted into one share of Energy Merger common stock, par value $0.0001 per share; and (iii) each outstanding warrant of Energy Infrastructure will be automatically assumed by Energy Merger with the same terms and restrictions, except that each will be exerciseable for common stock of Energy Merger, all as more particularly described in the joint proxy statement/prospectus;

 

b.   to consider and vote upon a proposal to approve and authorize the acquisition of nine SPVs, each owning one very large crude carrier, or VLCC, by Energy Merger from Vanship Holdings Limited, or Vanship, pursuant to the Share Purchase Agreement, as such may be amended from time to time, for an aggregate purchase price of $778,000,000, consisting of $643,000,000 in cash (reduced by the aggregate amount of net indebtedness of the SPVs at the time of the completion of the Business Combination and subject to other closing adjustments) and 13,500,000 shares of common stock of Energy Merger. In addition to such purchase price, Energy Merger will be obligated to effect the transfer of 425,000 warrants of Energy Merger from one of Energy Infrastructure's initial stockholders to Vanship upon completion of the Business Combination and Vanship may receive an additional 3,000,000 shares of Energy Merger common stock following each of the first and second anniversaries of the Business Combination (6,000,000 shares in the aggregate), subject to certain annual earning criteria of the vessels in Energy Merger’s initial fleet, all as more particularly described in the joint proxy statement/prospectus. We refer to this acquisition as the “Business Combination” and this proposal as the “Business Combination Proposal.” The approval of the Business Combination is conditioned upon the approval of the Redomiciliation Merger. Energy Merger cannot complete the Business Combination unless the Redomiciliation Merger is approved and completed; and

 

c.   to adjourn the Special Meeting to solicit additional proxies in the event Energy Infrastructure has not received the requisite stockholder vote to approve the Business Combination and the Redomiciliation Merger.

 

Pursuant to Energy Infrastructure's certificate of incorporation, Energy Infrastructure is required to obtain stockholder approval of the proposed Business Combination. The proposed Redomiciliation Merger, which would occur immediately prior to the Business Combination, would result in holders of Energy Infrastructure common stock and warrants automatically holding equivalent securities in Energy Merger. Energy Merger will continue as a reporting company under U.S. securities laws.

 

Pursuant to Energy Infrastructure's amended and restated certificate of incorporation, Energy Infrastructure is required to obtain stockholder approval of the Business Combination. Energy Infrastructure will not consummate the Redomiciliation Merger unless the Business Combination is also approved. Similarly, the Business Combination will not take place if the Redomiciliation Merger is not approved. Each of the Redomiciliation Merger Proposal and Business Combination Proposal will be voted on separately, but both must be approved for the Business Combination to be completed.

 

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The board of directors has fixed the record date as the close of business on ____, 2008, as the date for determining stockholders entitled to receive notice of and to vote at the Special Meeting and any adjournment or postponement thereof. Only holders of record of Energy Infrastructure common stock on that date are entitled to have their votes counted at the Special Meeting or any adjournment or postponement.

 

Your vote is important. Please sign, date and return your proxy card as soon as possible to make sure that your shares are represented at the Special Meeting. You may also submit a proxy by telephone or the internet, as described on the proxy card. If you are a stockholder of record, you may also cast your vote in person at the Special Meeting. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank how to vote your shares, or you may cast your vote in person at the Special Meeting by obtaining a proxy from your brokerage firm or bank. With respect to your vote on the Redomiciliation Merger Proposal, your failure to vote or instruct your broker or bank how to vote will have the same effect as voting against the proposal.

 

After careful consideration of all relevant factors, Energy Infrastructure's board of directors has determined that these proposals are fair to and in the best interest of Energy Infrastructure and its stockholders, and has recommended that you vote or give instruction to vote " FOR " adoption of each of them.

	By order of the Board of Directors,
	Andrea Theotokis
	Chairman of the Board of Directors of Energy Infrastructure Acquisition Corp.

 

Wilmington, Delaware ,

           , 2008

 

UNTIL [         ], 2008, ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS’ OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

 

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TABLE OF CONTENTS

QUESTIONS AND ANSWERS ABOUT THE ENERGY INFRASTRUCTURE SPECIAL MEETING			1
SUMMARY			9
ENERGY INFRASTRUCTURE SUMMARY FINANCIAL INFORMATION			16
SELECTED FINANCIAL INFORMATION FOR THE SPVS			17
MARKET PRICE AND DIVIDEND INFORMATION			29
RISK FACTORS			30
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			54
THE ENERGY INFRASTRUCTURE SPECIAL MEETING			56
BACKGROUND AND REASONS FOR THE BUSINESS COMBINATION AND THE REDOMICILIATION MERGER			61
THE SHARE PURCHASE AGREEMENT			75
ACQUISITION FINANCING			79
THE MERGER AGREEMENT			79
INFORMATION CONCERNING THE SPVS			82
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS OF THE SPVS			86
INFORMATION CONCERNING ENERGY INFRASTRUCTURE			120
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION OF ENERGY INFRASTRUCTURE			125
INFORMATION CONCERNING ENERGY MERGER			127
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION OF ENERGY MERGER			142
THE OIL TANKER INDUSTRY			148
DIVIDEND POLICY OF ENERGY MERGER			162
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION			163
STATEMENT OF FORECASTED RESULTS OF OPERATIONS AND CASH AVAILABLE FOR DIVIDENDS, RESERVES AND EXTRAORDINARY EXPENSES			168
CAPITALIZATION OF ENERGY INFRASTRUCTURE			174
RELATED PARTY TRANSACTIONS			175
DESCRIPTION OF ENERGY INFRASTRUCTURE SECURITIES			178
DESCRIPTION OF ENERGY MERGER SECURITIES			181
COMPARISON OF ENERGY INFRASTRUCTURE AND ENERGY MERGER STOCKHOLDER RIGHTS			183
COMPARISON OF MARSHALL ISLANDS CORPORATE LAW TO DELAWARE CORPORATE LAW			189
TAXATION			193
SHARES ELIGIBLE FOR FUTURE SALE			201
SELLING STOCKHOLDER			203
PLAN OF DISTRIBUTION			205
EXPERTS			206
LEGAL MATTERS			207
STOCKHOLDER PROPOSALS AND OTHER MATTERS			207
INDUSTRY AND MARKET DATA			207
WHERE YOU CAN FIND ADDITIONAL INFORMATION			207
ENFORCEABILITY OF CIVIL LIABILITIES			208
GLOSSARY OF SHIPPING TERMS			208
INDEX TO FINANCIAL STATEMENTS

 

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Appendix A		Amended and Restated Share Purchase Agreement, dated as of February 6, 2008, by and among Vanship Holdings Limited, Energy Infrastructure Merger Corporation and Energy Infrastructure Acquisition Corp.
Appendix B		Form of Agreement and Plan of Merger by and between Energy Infrastructure Merger Corporation and Energy Infrastructure Acquisition Corp.

 

Appendix C

Fairness Opinion

 

Appendix D		Clarkson Research Services Limited "Desk appraisal" vessel valuations
Appendix E		Simpson, Spence & Young, Ltd. "Desk appraisal" valuations
Appendix F		Form of Proxy

 

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QUESTIONS AND ANSWERS ABOUT THE ENERGY INFRASTRUCTURE SPECIAL MEETING

 

Q.	What is the purpose of this document?		A. This document serves as Energy Infrastructure’s proxy statement and as the prospectus of Energy Merger.
			·	As a proxy statement, this document is being provided to Energy Infrastructure stockholders because the Energy Infrastructure board of directors is soliciting their proxies to vote to approve, at a special meeting of stockholders, or the Special Meeting, (i) the acquisition of nine SPVs, each owning one VLCC, by Energy Merger, a wholly−owned Marshall Islands subsidiary of Energy Infrastructure, from Vanship pursuant to a definitive agreement, for an aggregate purchase price of $778,000,000, consisting of $643,000,000 in cash (reduced by the aggregate amount of net indebtedness of the SPVs at the time of the completion of the Business Combination and subject to other closing adjustments) and 13,500,000 shares of common stock of Energy Merger (as well as an additional 3,000,000 shares of common stock of Energy Merger following each of the first and second anniversaries of the completion of the Business Combination, subject to annual certain earning criteria of the vessels in Energy Merger’s initial fleet); and (ii) the merger of Energy Infrastructure with and into Energy Merger, with Energy Merger as the surviving corporation. As a prospectus, Energy Merger is providing this document to Energy Infrastructure stockholders because Energy Merger is offering its shares of common stock in exchange for shares of Energy Infrastructure common stock and Energy Merger is assuming the outstanding warrants of Energy Infrastructure in the Redomiciliation Merger. The registration statement on Form F−1/F−4 of which this joint proxy statement/prospectus is a part is being filed by Energy Merger to register (i) the shares being offered in exchange for shares of Energy Infrastructure, (ii) the outstanding warrants of Energy Infrastructure that will be assumed by Energy Merger, (iii) the sale of up to 6,525,118 shares of Energy Merger’s common stock to provide funds to Energy Merger to fund redemptions of common stock by Energy Infrastructure’s stockholders in the event that stockholders of Energy Infrastructure exercise their redemption rights in connection with the completion of the Business Combination, (iv) the resale of 13,500,000 shares of common stock that Energy Merger will issue to Vanship in respect of the stock consideration portion of the aggregate purchase price of the SPVs, (v) the resale of 425,000 warrants and the shares of common stock underlying such warrants that will be transferred to Vanship upon completion of the Business Combination, and (vi) the resale of an additional 1,000,000 units to be issued to George Sagredos, Energy Infrastructure’s Chief Operating Officer, President and director (or any assignee) upon consummation of the Business Combination.
Q.	What is being voted on?		A. You are being asked to vote on three proposals:
			·	the merger of Energy Infrastructure with and into Energy Merger, its wholly-owned Marshall Islands subsidiary, for the purpose of redomiciling Energy Infrastructure to the Marshall Islands as part of the acquisition of the SPVs, and as an effect of such merger, adopt the articles of incorporation of Energy Merger and bylaws, respectively – we call this merger the “Redomiciliation Merger” and this proposal the “Redomiciliation Merger Proposal”;

 

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			·	The acquisition by Energy Merger of all the outstanding shares of nine SPVs owned by Vanship, pursuant to the terms of the Share Purchase Agreement, resulting in each SPV becoming wholly owned by Energy Merger – we call this acquisition the “Business Combination” and this proposal the "Business Combination Proposal; and
			·	Any adjournment or postponement of the Special Meeting to solicit additional proxies in the event Energy Merger has not received the requisite stockholder vote to approve the Business Combination and the Redomiciliation Merger – we call this proposal the "Adjournment and Postponement Proposal".

 

Q.	Why is Energy Infrastructure proposing the transactions?		A. Energy Infrastructure was formed to acquire, through merger, capital stock exchange, asset acquisition or other similar business combination, a business in the energy or energy-related industries.
			Energy Infrastructure’s proposed transaction pursuant to which it is to acquire all of the issued and outstanding shares of nine SPVs, each owning a VLCC, is intended to be a ‘‘business combination’’ under Energy Infrastructure’s certificate of incorporation. Energy Infrastructure must submit the transaction to its stockholders for approval prior to completing a business combination. Energy Infrastructure has negotiated the terms of the Business Combination with Vanship and is now submitting the transaction to its stockholders for their approval.
Q.	Why is Energy Infrastructure proposing to redomicile to the Marshall Islands?		A.   Vanship, a non-U.S. company with no substantial connection to the United States, has agreed to accept a substantial portion of the consideration for the sale of the SPVs in the form of stock of the acquiring corporation, provided that such corporation is incorporated outside of the United States. The SPVs have operated almost exclusively outside of the United States throughout their entire history. None of the ships owned by the SPVs are operated under U.S. flag, and these ships operate predominantly outside of U.S. territorial waters. It is expected that the ships will continue to be operated predominantly outside of the United States after the Business Combination. As a result, given the minimal contacts with the United States, Vanship is more comfortable acquiring a controlling interest in a Marshall Islands corporation than in a U.S. corporation, which would be subject to the jurisdiction of U.S. federal, state or local courts.   In addition, Vanship is incorporated outside of the United States, and is aware that most of its competitors are incorporated in jurisdictions outside of the United States, such as the Republic of the Marshall Islands, operate outside of the United States, and therefore are subject to little or no U.S. income tax.  Prior to the proposed transaction, neither Vanship nor any of the SPVs was subject to the U.S. corporate net income tax (although a portion of the charter hire may have been subject, from time to time, to the U.S. tax on gross U.S. source transportation income). If Vanship received stock in Energy Infrastructure and Energy Infrastructure remained a U.S. corporation, the income from operation of the ships, when distributed to Energy Infrastructure (following the Business Combination), would be subject to U.S. federal income tax at a top marginal rate of 35% at the Energy Infrastructure level, and any dividends from Energy Infrastructure to its non-U.S. stockholders, including Vanship, would additionally be subject to U.S. withholding tax of up to 30%. Vanship indicated that such taxation would be unacceptable to it.

 

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Other factors also point in favor of redomiciling Energy Infrastructure. After the Business Combination, Energy Merger is expected to continue to be a foreign private issuer under the Securities Exchange Act of 1934, or the Exchange Act, which will reduce the reporting requirements under the Exchange Act and is expected to result in significantly lower costs associated with ongoing financial and reporting compliance than if Energy Merger were a U.S. corporation.

 

The relevant considerations are more fully described in “Reasons for the Redomiciliation Merger” under “Background and Reasons for the Business Combination and the Redomiciliation Merger.”

 

Q.	Why is Energy Infrastructure proposing the Adjournment and Postponement Proposal?		A. This proposal allows Energy Infrastructure’s board of directors to submit a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation of proxies in the event there are not sufficient votes at the time of the Special Meeting to approve the Business Combination Proposal and the Redomiciliation Merger Proposal. If this proposal is not approved by Energy Infrastructure’s stockholders, Energy Infrastructure’s board of directors may not be able to adjourn the Special Meeting to a later date in the event there are not sufficient votes at the time of the Special Meeting to approve the Business Combination Proposal and the Redomiciliation Merger Proposal.
Q.	What vote is required to approve the Business Combination Proposal?		A. Under Energy Infrastructure’s certificate of incorporation, approval of the Business Combination requires the affirmative vote of the holders of a majority of the shares of common stock voted at the Special Meeting, provided that there is a quorum. As noted above, Energy Infrastructure’s initial stockholders have agreed to vote 5,268,849 of their shares in accordance with the holders of a majority of the public shares voting in person or by proxy at the meeting. In addition, the holders of the 825,398 shares acquired in the private placement consummated immediately prior to Energy Infrastructure’s initial public offering and any shares of common stock issued upon conversion of Energy Infrastructure’s convertible loans (if converted) have agreed to vote in favor of the Business Combination. If the stockholders approve the Business Combination, the Business Combination will only proceed if holders of shares purchased in Energy Infrastructure’s initial public offering, representing less than 30% of the shares sold in the initial public offering and the private placement, exercise their redemption rights at the time of casting a vote against the Business Combination. If the holders of 6,525,119 or more shares purchased in Energy Infrastructure’s initial public offering (which number represents 30% of the shares of common stock sold in Energy Infrastructure’s initial public offering and private placement) vote against the Business Combination and demand that Energy Infrastructure redeem their shares for their pro rata portion of the Trust Account established at the time of the initial public offering (as described below), Energy Infrastructure will not be permitted to consummate the Business Combination pursuant to its certificate of incorporation.
Q.	What constitutes a quorum?		The presence at the Special Meeting, in person or by proxy, of the holders of a majority of the shares of Energy Infrastructure’s common stock outstanding on the record date shall constitute a quorum. A quorum is required for business to be conducted at the Special Meeting.

 

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Q.

What vote is required to approve the Redomiciliation Merger Proposal?

A. Approval of the Redomiciliation Merger Proposal will require the affirmative vote of holders of a majority of the outstanding shares of Energy Infrastructure’s common stock.

 

Q.	What vote is required to adopt the proposal to adjourn or postpone the Special Meeting for the purpose of soliciting additional proxies?		A. Approval of the Adjournment and Postponement Proposal will require the affirmative vote of holders of a majority of the shares of Energy Infrastructure’s common stock represented in person or by proxy and entitled to vote at the Special Meeting.
Q.	How do the Energy Infrastructure insiders intend to vote their shares?		A. Energy Infrastructure’s initial stockholders have agreed to vote 5,268,849 of their shares in accordance with the holders of a majority of the public shares voting on the Business Combination Proposal in person or by proxy at the meeting. If holders of a majority of the public shares cast at the meeting vote for or against, or abstain with respect to, a proposal, the initial stockholders will cast the 5,268,849 shares in the same manner as such majority votes on such proposal. In addition, the holder of the 825,398 shares acquired in the private placement and any shares of common stock issued upon conversion of the convertible loans have agreed to vote in favor of the Business Combination. The initial stockholders, holder of the 825,398 shares of common stock acquired in the private placement, and holder of the convertible loans (if converted) have agreed not to demand redemption of any shares owned by them.
			The initial holders intend to vote all of their shares in favor of the Redomiciliation Merger Proposal.
			The 5,268,849 shares that Energy Infrastructure’s initial stockholders will vote in favor of the Redomiciliation Merger Proposal presented in this joint proxy statement/prospectus and the 825,398 shares of common stock acquired in the private placement represent 22.4% of Energy Infrastructure’s outstanding shares of common stock. By voting these shares for the Redomiciliation Merger Proposal, Energy Infrastructure’s initial stockholders will increase the number of shares held by Energy Infrastructure’s public stockholders that must be voted against the Redomiciliation Merger Proposal to reject the Redomiciliation Merger Proposal.
Q.	Do Energy Infrastructure stockholders have appraisal rights under Delaware law?		A. Under the General Corporation Law of the State of Delaware, you do not have appraisal rights with respect to your shares.
Q.	What happens post- Business Combination to the funds deposited in the Trust Account?		A. The net proceeds of Energy Infrastructure’s initial public offering, plus certain deferred offering costs and deferred placement fees have been deposited into a trust account maintained by Continental Stock Transfer & Trust Company, which we refer to as the Trust Account. Energy Infrastructure stockholders exercising redemption rights will receive $10.00 per share, plus a portion of the interest earned not previously released to Energy Infrastructure (net of taxes payable) out of the Trust Account. The balance of the funds in the Trust Account will be utilized to fund the cash consideration in respect of the acquisition of the nine SPVs.

 

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Q.	What happens if the Business Combination is not consummated?		A. If Energy Infrastructure does not acquire the nine SPVs in the Business Combination, Energy Infrastructure will seek an alternative business combination. Energy Infrastructure’s certificate of incorporation requires that it be dissolved if it does not consummate an eligible business combination by the later of (i) January 21, 2008 or (ii) July 21, 2008 in the event that either a letter of intent, an agreement in principle or a definitive agreement to complete an eligible business combination was executed but was not consummated by January 21, 2008. Energy Infrastructure entered into a letter of intent relating to a business combination with Vanship on August 31, 2007 and the parties entered into a definitive purchase agreement on December 3, 2007; as a result Energy Infrastructure is allowed an additional six months to complete the Business Combination to avoid liquidation. Under its certificate of incorporation as currently in effect, if Energy Infrastructure does not acquire at least majority control of a target business by July 21, 2008, Energy Infrastructure will be required to dissolve.
			In any liquidation, the funds held in the Trust Account, plus a portion of the interest earned not previously released to us (net of taxes payable and the repayment of convertible loans aggregating $2,685,000, if not earlier converted), together with any remaining out-of-trust net assets, will be distributed pro rata to Energy Infrastructure’s common stockholders who hold shares issued in Energy Infrastructure’s initial public offering. The funds held in the Trust Account may not be distributed except upon our dissolution and, unless and until such approval is obtained from Energy Infrastructure’s stockholders, the funds held in the Trust Account will not be released. Consequently, holders of a majority of Energy Infrastructure’s outstanding stock must approve dissolution in order to receive the funds held in the Trust Account and the funds will not be available for any other corporate purpose. The procedures required for us to liquidate under the General Corporation Law of the State of Delaware, or a vote to reject any plan of dissolution and distribution by its stockholders, may result in substantial delays in the liquidation of the Trust Account to Energy Infrastructure’s public stockholders as part of our plan of dissolution and distribution. See “Risk Factors - Risks Relating to Energy Infrastructure Acquisition Corp.” for risks associated with the dissolution of Energy Infrastructure.
Q.	When do you expect the Business Combination to be completed?		A. If the Redomiciliation Merger and the Business Combination are approved at the Special Meeting, Energy Infrastructure expects to consummate both transactions promptly thereafter.
Q.	What will I receive in the Redomiciliation Merger?		A. Energy Infrastructure stockholders will receive an equal number of shares of common stock of Energy Merger in exchange for their shares of Energy Infrastructure common stock, and Energy Merger will assume the outstanding Energy Infrastructure warrants, the terms and conditions of which will not change, except that they will become exercisable for shares of Energy Merger common stock.
Q.	How will the Redomiciliation Merger be accomplished?		A. Energy Infrastructure will merge into Energy Merger, Energy Infrastructure’s wholly owned subsidiary that is incorporated as a Marshall Islands company. As a result of the Redomiciliation Merger, each currently issued outstanding share of common stock of Energy Infrastructure will automatically convert into one ordinary share of Energy Merger. This procedure will result in your becoming a stockholder in Energy Merger instead of Energy Infrastructure.

 

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Q.	Will the Energy Infrastructure stockholders be taxed as a result of the Redomiciliation Merger?		A. Holders of Energy Infrastructure common stock and warrants generally should not recognize any gain or loss as a result of the Redomiciliation Merger for U.S. federal income tax purposes. We urge you to consult your own tax advisors with regard to your particular tax consequences of the Redomiciliation Merger.
Q.	Will Energy Infrastructure be taxed on the Redomiciliation Merger?		A. Energy Infrastructure will generally recognize gain, but not loss, for U.S. federal income tax purposes as a result of the Redomiciliation Merger equal to the excess, if any, of the fair market value of each Energy Infrastructure asset at the effective time of the Redomiciliation Merger over the adjusted tax basis of such asset.

 

Q.

How much of Energy Infrastructure will its current public stockholders own post-Business Combination and post-Redomiciliation Merger?

A. After the Business Combination and Redomiciliation Merger, if no Energy Infrastructure stockholders demand that Energy Infrastructure redeem their shares into a pro rata portion of the Trust Account, as a result of the issuance of 13,500,000 shares to Vanship in the Business Combination, the issuance of 1,000,000 units to Energy Infrastructure’s President and Chief Operating Officer (or any assignee thereof), the issuance of 5,000,000 units to Vanship in connection with the Business Combination Private Placement and the issuance of 268,500 units upon the conversion of convertible loans aggregating $2,685,000, Vanship will own 39.4% of Energy Merger and the ownership interests of Energy Infrastructure public stockholders will be diluted so that they will only own 44.5% of Energy Merger a reduction from the approximately 77% of Energy Infrastructure's outstanding common stock they currently own. Existing Energy Infrastructure public stockholders could own less than approximately 44.5% if one or more Energy Infrastructure stockholders vote against the Business Combination Proposal and demand redemption of their shares into a pro rata portion of the Trust Account. Also, following the consummation of the Business Combination, there will be outstanding warrants to purchase up to 28,018,898 additional shares of Energy Merger common stock. We have also agreed to issue to Vanship an additional 3,000,000 shares of common stock of Energy Merger following each of the first and second anniversaries of the completion of the Business Combination (6,000,000 shares in the aggregate), subject to certain annual earning criteria of the vessels in Energy Merger’s initial fleet.

 

Q.	Do Energy Infrastructure stockholders have redemption rights?		A. If you hold shares of common stock issued in Energy Infrastructure’s initial public offering, then you have the right to vote against the Business Combination Proposal and demand that Energy Infrastructure redeem these shares for $10.00 per share, plus a portion of the interest earned not previously released to Energy Infrastructure (net of taxes payable). We sometimes refer to these rights to vote against the Business Combination and demand redemption of the shares as redemption rights. Holders of warrants issued by Energy Infrastructure do not have any redemption rights.
Q.	If I am not going to attend the Special Meeting in person, should I return my proxy card instead?		A. Yes. After carefully reading and considering the information in this joint proxy statement/prospectus, please fill out and sign your proxy card. Then return it in the return envelope as soon as possible, so that your shares may be represented at the Special Meeting. You may also submit a proxy by telephone or internet, as explained on the proxy card. A properly executed proxy will be counted for the purpose of determining the existence of a quorum.

 

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Q.	If I have redemption rights, how do I exercise them?		A. If you wish to exercise your redemption rights, you must vote against the Business Combination Proposal and at the same time demand that Energy Infrastructure redeem your shares for cash. If, notwithstanding your vote, the Business Combination is completed, then you will be entitled to receive $10.00 per share, plus a portion of the interest earned not previously released to us (net of taxes payable). If you exercise your redemption rights, then you will be exchanging your shares of Energy Infrastructure common stock for cash and will no longer own these shares. You will be entitled to receive cash for these shares only if you continue to hold these shares through the closing of the Business Combination and then tender your stock certificate. If you do not make a demand to exercise your redemption rights at the time you vote against the Business Combination Proposal (or if you do not vote against the Business Combination Proposal), you will lose your redemption rights, and that loss cannot be remedied.
Q.	Who will manage Energy Merger after the Redomiciliation Merger and the Business Combination?		A. Immediately following the Business Combination, the board of directors of Energy Merger shall consist of Captain Charles Arthur Joseph Vanderperre, Mr. Fred Cheng, Mr. Christoph Widmer, Mr. Marios Pantazopoulos and five independent directors to be nominated by Vanship. Captain Vanderperre shall serve as Energy Merger’s Chairman of the board of directors and Mr. Cheng shall serve as Energy Merger’s Chief Executive Officer. Captain Vanderperre and Mr. Cheng are the directors and co-founders of Vanship. Mr. Pantazopoulos currently serves as a director, Chief Financial Officer, Treasurer and Secretary of Energy Infrastructure.
Q.	What will happen if I abstain from voting or fail to instruct my broker to vote?		A. An abstention or the failure to instruct your broker how to vote (also known as a broker non-vote) is not considered a vote cast at the meeting with respect to the Business Combination Proposal and therefore your vote will have no effect on the vote relating to the Business Combination, and you will not be able to redeem your shares. An abstention or a broker non-vote will have the effect of voting against the Redomiciliation Merger Proposal.
Q.	How do I change my vote?		A. Send a later-dated, signed proxy card to Energy Infrastructure’s secretary no later than _________, 2008, prior to the date of the Special Meeting, or attend the Special Meeting in person and vote. You also may revoke your proxy by sending a notice of revocation to Energy Infrastructure Acquisition Corp, Suite 1300, 1105 North Market Street, Wilmington, Delaware 19899, Attn: Secretary.
Q.	If my shares are held in ‘‘street name,’’ will my broker automatically vote them for me?		A. No. Your broker can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares. Your broker can tell you how to provide these instructions.
Q.	Do I need to turn in my old certificates?		A. No. If you hold your securities in Energy Infrastructure in certificated form, as opposed to holding them through your broker, you do not need to exchange them for certificates issued by Energy Merger. Your current certificates will represent your rights in Energy Merger. You may exchange them by contacting the transfer agent, Continental Stock Transfer & Trust Company, Reorganization Department, and following their requirements for reissuance. If you elect redemption, you will need to deliver your old certificate to Continental Stock Transfer & Trust Company pursuant to instructions that will be provided to you by Energy Merger after completion of the Business Combination.

 

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Q.	Who can help answer my questions?		A. If you have questions, you may write or call Energy Infrastructure Acquisition Corp, at Suite 1300, 1105 North Market Street, Wilmington, Delaware 19899, (302) 656-1771, Attention: Susan Dubb.
Q.	When and where will the Special Meeting be held?		A. The meeting will be held at 10:00 a.m. Eastern standard time on [       ] , 2008 at                       New York, New York.
Q.	What other important considerations are there?		A. You should also be aware that in pursuing the Business Combination, Energy Infrastructure has incurred substantial expenses. Energy Infrastructure currently has limited available funds outside the Trust Account. If for any reason the Business Combination is not consummated, Energy Infrastructure’s creditors may seek to satisfy their claims from funds in the Trust Account. This could result in further depletion of the Trust Account, which would reduce a stockholder’s portion of the Trust Account upon liquidation. As of the date of this joint proxy statement/prospectus, there are no creditor claims against Energy Infrastructure or Energy Merger.
Q.	What is the anticipated dividend policy of Energy Merger?		A. Under the Share Purchase Agreement and subject to its ability to do so under applicable law, Energy Merger has agreed to pay dividends of $1.54 per share to Energy Merger’s public stockholders by the end of the first year following the consummation of the Business Combination. Vanship has agreed, and it is a condition to the closing of the Business Combination that Energy Merger insiders shall have agreed, to waive any right to receive dividend payments in the one-year period immediately following the consummation of the Business Combination in order to facilitate the payment of these dividends. The payment of these dividends is subject to a number of risks and Energy Merger may not have sufficient funds in its first year of operations to pay these dividends. See “Risk Factors - Risks Related to Energy Merger’s Common Stock – Investors should not rely on an investment in Energy Merger if they require dividend income. It is not certain that Energy Merger will pay a dividend and the return on an investment in Energy Merger, if any, may come solely from the appreciation of its common stock, which is also not assured.”   The payment of dividends following the Business Combination will be in the discretion of Energy Merger’s board of directors and will depend on market conditions and Energy’s Merger’s business strategy in any given period.

 

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SUMMARY

 

This section summarizes information related to the proposals to be voted on at the Special Meeting. These items are described in greater detail elsewhere in this joint proxy statement/prospectus. You should carefully read this entire joint proxy statement/prospectus and the other documents to which it refers you .

 

The Companies

 

Energy Infrastructure is a Business Combination Company ^TM , or BCC ^TM , which is a blank check company formed to acquire, through a merger, capital stock exchange, asset acquisition or similar business combination, one or more businesses that support the process of bringing energy, in the form of crude oil, natural and liquefied petroleum gas, and refined and specialized products (such as petrochemicals), from production to final consumption throughout the world. On July 21, 2006, Energy Infrastructure consummated its initial public offering of 20,250,000 units with each unit consisting of one share of its common stock and one warrant. Each warrant entitles the holder to purchase one share of Energy Infrastructure common stock at an exercise price of $8.00 per share. The units sold in Energy Infrastructure’s initial public offering were sold at an offering price of $10.00 per unit, generating gross proceeds of $202,500,000. Prior to the closing of Energy Infrastructure’s initial public offering, Energy Corp., a company formed under the laws of the Cayman Islands and controlled by Energy Infrastructure’s President and Chief Operating Officer, purchased an aggregate of 825,398 units at a price of $10.00 per unit in a private placement, for aggregate gross proceeds of $8,253,980. On August 31, 2006 the underwriters of Energy Infrastructure’s initial public offering exercised their over allotment option to purchase an additional 675,000 units, generating an additional $6,750,000 in gross proceeds. This resulted in a total of $209,250,000 in net proceeds, including certain deferred offering costs and deferred placement fees being held in the Trust Account. Energy Infrastructure’s management has broad discretion with respect to the specific application of the net proceeds of the public offering, although substantially all of the net proceeds of the offerings are intended to be generally applied toward consummating a business combination. As of September 30, 2007, $215,529,086 was held in the Trust Account, including accrued interest of $6,279,086. As of September 30, 2007, the Trust Account had earned interest of $8,779,086, and of the $3,430,111 that Energy Infrastructure is entitled to withdraw from interest earned on the Trust Account for working capital purposes, as of September 30, 2007, it had withdrawn $1,905,078. As of September 30, 2007, Energy Infrastructure had withdrawn an additional $594,922 of interest from the Trust Account to pay principal and interest on loans made by certain of Energy Infrastructure’s initial stockholders. Energy Infrastructure is permitted to withdraw an additional $1,525,033 of interest for working capital purposes, in addition to additional withdrawals to pay interest on convertible loans in the aggregate principal amount of $2,685,000 until completion of the Business Combination, at which time such loans will be converted into 268,500 units of Energy Merger.  

 

For the period from August 11, 2005 (inception) to September 30, 2007, Energy Infrastructure has incurred $882,941 for consulting and professional fees, $14,064,154 of stock-based compensation (in the form of stock options that will be cancelled upon consummation of the Business Combination), $291,000 for franchise taxes, $156,583 for insurance expense, $10,075 for rental expense pursuant to Energy Infrastructure’s lease of office space, travel expenses of $296,498 and other operating and formation costs of $127,865.

 

Energy Infrastructure anticipates that it will incur total transaction costs of approximately $8,400,000 in connection with the Business Combination and Redomiciliation Merger. These transaction costs include legal expenses, fees for New Century Capital Partners’ fairness opinion, fees to The Investment Bank of Greece and Maxim Group LLC, as financial advisors, fees to accountants and valuation consultants, roadshow expenses, printer fees and other miscellaneous expenses. Such costs do not include transaction costs of approximately $3,500,000 that Energy Infrastructure is required to reimburse to Vanship, primarily consisting of estimated attorney and accounting fees.

 

Energy Infrastructure anticipates that the costs to consummate the Business Combination will greatly exceed its available cash outside of the Trust Account. Energy Infrastructure has not sought and does not anticipate seeking any fee deferrals. Energy Infrastructure expects these costs will ultimately be borne by Energy Merger from the funds held in the Trust Account if the proposed Business Combination and Redomiciliation Merger are completed. If the Business Combination and Redomiciliation Merger are not completed, the costs will potentially be subject to the indemnification obligations of Energy Infrastructure’s initial stockholders to the Trust Account. If these indemnification obligations are not performed or are inadequate, it is likely that vendors or service providers would seek to recover these expenses from the Trust Account, which could ultimately deplete the Trust Account and reduce a stockholder’s current pro rata portion of the Trust Account upon liquidation.

 

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The mailing address of Energy Infrastructure’s principal executive office is Suite 1300, 1105 North Market Street, Wilmington, DE 19899, and its telephone number is (302) 656-1771, Attn: Susan Dubb.

 

The Redomiciliation Merger and the Business Combination

 

Pursuant to the Agreement and Plan of Merger by and between Energy Infrastructure and Energy Merger, or the Merger Agreement, Energy Infrastructure will merge with and into Energy Merger, its wholly-owned subsidiary incorporated in the Marshall Islands, to effect the redomiciliation of Energy Infrastructure from a U.S. company to a Marshall Islands company.

 

The closing of the Business Combination is subject to certain conditions, including the approval by Energy Infrastructure’s stockholders of the Redomiciliation Merger and the Business Combination described below.

 

Assuming the issuance of 1,000,000 units to Energy Infrastructure’s President and Chief Operating Officer (or any assignee thereof), the issuance of 5,000,000 units to Vanship in connection with the Business Combination Private Placement and the issuance of 268,500 units upon the conversion of convertible loans aggregating $2,685,000 and assuming none of Energy Infrastructure’s stockholders exercise redemption rights with respect to the Business Combination, upon consummation of the Business Combination, Vanship will own approximately 39.4% of Energy Merger’s issued and outstanding common stock, and Energy Infrastructure’s pre-Business Combination holders of common stock will own in the aggregate approximately 60.6% of Energy Merger’s common stock (assuming no warrants are exercised). Holders of stock purchased in Energy Infrastructure’s initial public offering will own 44.5% of Energy Merger’s outstanding common stock, a reduction from the approximately 77% of Energy Infrastructure's outstanding common stock they currently own.

 

Procedure

 

Under Delaware law, the affirmative vote of the holders of a majority of the outstanding shares of Energy Infrastructure’s common stock is required to adopt the Merger Agreement, providing for the Redomiciliation Merger, and under Energy Infrastructure’s certificate of incorporation, a majority of the votes cast at a meeting of stockholders at which a quorum is present must approve the proposed Business Combination. Promptly after obtaining approval from its stockholders to proceed with the Redomiciliation Merger and the Business Combination, Energy Infrastructure and Energy Merger will consummate the Redomiciliation Merger and immediately thereafter, Energy Merger will consummate the Business Combination. Each public stockholder has the right to vote against the Business Combination Proposal and elect to redeem his, her or its shares for $10.00 per share, plus a portion of the interest earned not previously released to Energy Infrastructure (net of taxes payable).

 

However, notwithstanding adoption of the Business Combination Proposal, the Business Combination will only proceed if public holders owning less than 30% of the total shares sold in Energy Infrastructure’s initial public offering and the private placement consummated immediately prior to the initial public offering vote against the Business Combination and exercise their redemption rights. If holders of shares purchased in Energy Infrastructure’s initial public offering owning 30% or more of the shares of common stock sold in Energy Infrastructure’s initial public offering and private placement vote against the Business Combination Proposal and elect to exercise their redemption rights, Energy Infrastructure’s board of directors will abandon the Business Combination, notwithstanding approval by a majority of its stockholders. If holders of the maximum permissible number of shares elect redemption without Energy Infrastructure being required to abandon the Business Combination, as of September 30, 2007, a total of approximately $65,190,317 of the Trust Account would have been disbursed, leaving approximately $149,690,645 available in the Trust Account, plus up to $50,000,000 from the Business Combination Private Placement, for the purchase of the SPVs and the payment of liabilities. Energy Infrastructure estimates that it will be required to pay approximately $228,000,000 to Vanship in satisfaction of the cash consideration portion of the purchase price of the SPVs and that Energy Merger will be required to maintain minimum cash reserves of $15,000,000 upon completion of the Business Combination in order to draw down funds under its credit facility to refinance the existing debt of the SPVs. Assuming that Energy Infrastructure stockholders approve the Business Combination, Energy Merger intends to sell such number of shares of its common stock equal to the number of shares of Energy Infrastructure common stock that are redeemed upon completion of the Business Combination. The proceeds of such sale would be used to fund redemptions of common stock by Energy Infrastructure’s stockholders. There can be no assurance that Energy Merger will be able to successfully complete such sale. To the extent such sale is not completed and Energy Infrastructure has insufficient funds to complete the Business Combination, the Business Combination will not occur, and it is likely that Energy Infrastructure will be required to dissolve and liquidate.

 

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In connection with Energy Infrastructure's initial public offering, each of Energy Infrastructure’s initial stockholders has agreed to indemnify Energy Infrastructure based on their respective pro rata beneficial ownership in Energy Infrastructure immediately prior to the initial public offering for debts and obligations to vendors that are owed money by Energy Infrastructure for services rendered or products sold to Energy Infrastructure, but only to the extent necessary to ensure that certain liabilities do not reduce the initial $209,250,000 placed in the Trust Account. The obligations of Energy Infrastructure’s initial stockholders to indemnify Energy Infrastructure remain in effect and extend to transaction expenses to be incurred in connection with Energy Infrastructure’s seeking to complete the Business Combination. Since these obligations were not collateralized or guaranteed, however, Energy Infrastructure cannot assure you that its initial stockholders would be able to satisfy their obligations if material liabilities are sought to be satisfied from the Trust Account. The indemnity obligation of Energy Infrastructure’s initial stockholders includes certain accounting and legal fees of Vanship in case of a termination of the Share Purchase Agreement. If the Business Combination is consummated, Energy Infrastructure's initial stockholders will not have to perform such obligations.

 

Fairness Opinion

 

In determining to recommend that holders of Energy Infrastructure’s securities vote for the Business Combination Proposal, the board of directors of Energy Infrastructure considered the fairness opinion of its financial advisor, New Century Capital Partners, dated October 17, 2007, and based upon and subject to the assumptions, qualifications and limitations set forth in the written fairness opinion, New Century Capital Partners determined that the consideration as stipulated in the Share Purchase Agreement was fair from a financial point of view to the stockholders of Energy Infrastructure. The full text of New Century Capital Partners’ written fairness opinion, dated October 17, 2007, is attached as Annex C to this joint proxy statement/prospectus. We urge you to read the opinion and the section titled ‘‘Fairness Opinion’’ in this joint proxy statement/prospectus carefully for a description of the procedures followed, assumptions made, matters considered and limitations on the reviews undertaken. New Century Capital Partners’ opinion does not constitute a recommendation to the board of directors or to the holders of Energy Infrastructure’s securities as to how such person should vote or act on any of the proposals set forth in this joint proxy statement/prospectus. New Century Capital Partners has received a fee of $65,000 in connection with the preparation and issuance of its fairness opinion and was reimbursed for its attorney’s fees. New Century Capital Partners will receive an additional fee of $180,000 in connection with the preparation and issuance of its opinion and will be reimbursed for up to $20,000 of additional attorney’s fees, contingent upon completion of the Business Combination. The fee for the fairness opinion was negotiated by Energy Infrastructure and New Century Capital Partners. We believe the amount of this fee is consistent with industry custom and practice for the preparation of a fairness opinion. See “Risk Factors - Risks Relating to Energy Infrastructure Acquisition Corp - You should not place undue reliance on the fairness opinion” for further information relating to reliance on the fairness opinion prepared by New Century Capital Partners.

 

If the Business Combination Is Not Approved

 

Energy Infrastructure’s certificate of incorporation requires that it be dissolved if it does not consummate an eligible business combination by the later of (i) January 21, 2008 or (ii) July 21, 2008 in the event that either a letter of intent, an agreement in principle or a definitive agreement to complete an eligible business combination was executed but was not consummated by January 21, 2008. Energy Infrastructure entered into a letter of intent relating to a business combination with Vanship on August 31, 2007 and the parties entered into a definitive purchase agreement on December 3, 2007. As a result, if Energy Infrastructure does not acquire at least majority control of a target business by July 21, 2008, Energy Infrastructure will be required to dissolve and distribute to its public stockholders on a pro rata basis the funds held in the Trust Account, plus a portion of the interest earned not previously released to us (net of taxes payable and the repayment of convertible loans aggregating $2,685,000, if not earlier converted), together with any remaining out-of-trust net assets. “See Risk Factors – Risks Related to Energy Infrastructure” for further information relating to risks associated with the dissolution of Energy Infrastructure.

 

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Conditions; Termination

 

Approval of the Business Combination by stockholders of a majority of the votes cast at a meeting of stockholders at which a quorum is present is a condition to Energy Infrastructure’s consummating the Business Combination. The holders of Energy Infrastructure common stock issued prior to its initial public offering have agreed to vote 5,268,849 of their shares in accordance with the holders of a majority of the public shares voting in person or by proxy at the meeting. Holders of the common stock contained in the units purchased in the private placement, and shares of common stock issued upon conversion of the convertible loans (to the extent converted) have agreed to vote such shares in favor of the Business Combination. The 6,094,247 shares of common stock currently outstanding that may be voted in favor of the proposals presented in this joint proxy statement/prospectus represent 22.4% of Energy Infrastructure’s outstanding shares of common stock. Additionally, if holders of 6,525,119 or more of the shares purchased in Energy Infrastructure’s initial public offering (which number represents 30% or more of the shares of Energy Infrastructure common stock issued in Energy Infrastructure’s initial public offering and private placement) vote against the Business Combination and exercise their right to redeem their shares for cash, the Business Combination will not be consummated. Notwithstanding approval by Energy Infrastructure’s stockholders of the Business Combination, the Business Combination will not be consummated if holders of a majority of the outstanding shares of common stock of Energy Infrastructure do not approve the Redomiciliation Merger.

 

The Merger Agreement

 

The Merger Agreement, the Share Purchase Agreement and the fairness opinion of New Century Capital Partners are annexed to this joint proxy statement/prospectus. We encourage you to read them in their entirety, as they are the key legal documents underlying the proposals being presented. They are also described in detail elsewhere in this joint proxy statement/prospectus.

 

Management

 

Immediately following the Business Combination, the board of directors of Energy Merger shall consist of Captain Charles Arthur Joseph Vanderperre, Mr. Fred Cheng, Mr. Christoph Widmer, Mr. Marios Pantazopoulos and five independent directors to be nominated by Vanship. Captain Vanderperre shall serve as Energy Merger’s Chairman of the board of directors and Mr. Cheng shall serve as Energy Merger’s Chief Executive Officer. Captain Vanderperre and Mr. Cheng are the directors and co-founders of Vanship. Mr. Pantazopoulos currently serves as a director and Chief Financial Officer of Energy Infrastructure.

 

Energy Infrastructure Special Meeting

 

Date, Time and Place.   The Special Meeting of Energy Infrastructure’s stockholders will be held at 10:00 a.m., Eastern standard time, on      , 2008, at       , New York, New York.

 

Voting Power; Record Date.   You will be entitled to vote or direct votes to be cast at the Special Meeting, if you owned Energy Infrastructure common stock at the close of business on                            , 2008, the record date for the Special Meeting. You will have one vote for each share of Energy Infrastructure common stock you owned at that time. Warrants to purchase Energy Infrastructure common stock do not have voting rights.

 

Votes Required.   Approval of the Business Combination Proposal will require the approval of a majority of the votes cast at a meeting of stockholders at which a quorum is present, and the approval of the Redomiciliation Merger Proposal will require the affirmative vote of holders of a majority of Energy Infrastructure’s outstanding common stock.

 

Notwithstanding approval of the Business Combination, the Business Combination will only proceed if holders of shares purchased in Energy Infrastructure’s initial public offering representing less than 30% of the total shares sold in the initial public offering and the private placement (less than 6,525,119 shares), vote against the Business Combination and exercise their redemption rights.

 

Under Delaware law and Energy Infrastructure’s bylaws, no other business may be transacted at the Special Meeting.

 

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At the close of business on September 30, 2007, there were 27,221,747 shares of Energy Infrastructure common stock outstanding (including the 6,094,247 shares held by Energy Infrastructure’s officers and directors and their respective affiliates, which were not purchased in Energy Infrastructure’s initial public offering). Each share of Energy Infrastructure common stock entitles its holder to cast one vote per proposal.

 

Relation of Proposals.   Energy Infrastructure will not consummate the Redomiciliation Merger unless the Business Combination is also approved. Similarly, the Business Combination will not take place if the Redomiciliation Merger is not approved. Each of the Redomiciliation Merger Proposal and Business Combination Proposal will be voted on separately, but both must be approved for the Business Combination to be completed.

 

Redemption Rights.   Under Energy Infrastructure’s certificate of incorporation, a holder of Energy Infrastructure common stock (other than an initial stockholder) who votes against the Business Combination may demand that Energy Infrastructure redeem his or her shares for cash, but such stockholder will only receive the redemption amount if the Business Combination is subsequently consummated. This demand must be made in writing at the same time the stockholder votes against the Business Combination, on the form of proxy card voted against the Business Combination. If you so demand, and the Business Combination is approved and consummated, Energy Infrastructure will redeem your shares for cash equal to $10.00 per share, plus a portion of the interest earned not previously released to us (net of taxes payable). You will be entitled to receive cash for your shares only if you continue to hold your shares through completion of the Business Combination and then tender your stock certificate(s) to Energy Infrastructure or to Energy Infrastructure’s duly appointed tender agent. If you exercise your redemption rights, you will no longer own these Energy Infrastructure shares. Do not send your stock certificate(s) with your proxy card. If the Business Combination is consummated, redeeming stockholders will be sent instructions on how to tender their shares of common stock and when they should expect to receive the redemption amount. Stockholders will not be requested to tender their shares of common stock before the Business Combination is consummated.

 

The Business Combination will not be consummated if holders of 6,525,119 or more shares of Energy Infrastructure common stock sold in its initial public offering (which number represents 30% of the shares sold in the initial public offering and the private place placement) exercise their redemption rights.

 

If the Business Combination is not consummated and Energy Infrastructure is not required to liquidate pursuant to the terms of its certificate of incorporation, it may seek another target business with which to effect a business combination.

 

Appraisal Rights.   Under the General Corporation Law of the State of Delaware, appraisal rights are not available to Energy Infrastructure’s stockholders in connection with the Business Combination or the Redomiciliation Merger.

 

Proxies; Board Solicitation.   Your proxy is being solicited by the Energy Infrastructure board of directors on each proposal being presented to stockholders at the Special Meeting. Proxies may be solicited in person or by mail, telephone or other electronic means. If you grant a proxy, you may still vote your shares in person, which will have the effect of revoking any proxy granted before the Special Meeting.

 

Stock Ownership.   The holdings of Energy Infrastructure’s directors and significant stockholders are detailed in “Information Concerning Energy Infrastructure Acquisition Corp. — Energy Infrastructure Principal Stockholders.”

 

Energy Infrastructure’s Recommendation; Interests of Energy Infrastructure’s Management

 

After careful consideration, Energy Infrastructure’s board of directors has determined that the Business Combination and the other proposals presented at the Special Meeting are fair to, and in the best interests of, Energy Infrastructure and its stockholders. The board of directors has approved and declared advisable the proposals, and recommends that you vote or direct that your vote to be cast “ FOR ” the adoption of each proposal.

 

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When you consider the recommendation of the board of directors, you should keep in mind that the members of the board of directors have interests in the Business Combination that may be different from, or in addition to, yours. These interests include the following:

 

·

If the proposed Business Combination is not completed, and Energy Infrastructure is subsequently required to liquidate, the shares of common stock owned by Energy Infrastructure’s officers and directors and their affiliates will be worthless because the officers and directors are not entitled to liquidation distributions from Energy Infrastructure. In addition, the possibility that certain of Energy Infrastructure’s officers and directors will be required to perform their obligations under the indemnity agreements referred to below will be substantially increased.

 

·

In connection with Energy Infrastructure’s initial public offering, Energy Infrastructure’s current officers and directors agreed to indemnify Energy Infrastructure to the extent of their pro rata beneficial interest in Energy Infrastructure immediately prior to the initial public offering for debts and obligations to vendors that are owed money by Energy Infrastructure for services rendered or products sold to Energy Infrastructure, but only to the extent necessary to ensure that certain liabilities do not reduce the initial $209,250,000 placed in the Trust Account. If the Business Combination is consummated, Energy Infrastructure’s officers and directors will not have to perform such obligations. If the Business Combination is not consummated, however, certain of Energy Infrastructure’s officers and directors would potentially be liable for any claims against the Trust Account by vendors who have not explicitly waived their right to make claims against the Trust Account.

 

·

All rights of Energy Infrastructure’s officers and directors to be indemnified by Energy Infrastructure, and of Energy Infrastructure’s directors to be exculpated from monetary liability with respect to prior acts or omissions, will continue after the Business Combination pursuant to provisions in Energy Merger’s articles of incorporation. However, if the Business Combination is not approved and Energy Infrastructure subsequently liquidates, its ability to perform its obligations under those provisions will be substantially impaired since it will cease to exist. If the Business Combination is ultimately completed, Energy Merger’s ability to perform such obligations will be substantially enhanced.

 

Acquisition Financing  

 

On February 11, 2008 Energy Merger and each of the SPVs entered into a committed term sheet with DVB Merchant Bank (Asia) Ltd, Fortis Bank S. A. / N. V. and NIBC Bank Ltd, whereby the latter, subject to the approval of the Redomiciliation Merger and the Business Combination and certain other conditions, will arrange a credit facility of up to $415,000,000 secured by, among other things, first and second mortgages on the VLCCs. Funds obtained under the financing will be used to refinance outstanding secured debt of the SPVs. See "Acquisition Financing."

 

Certain U.S. Federal Income Tax Consequences  

 

As described below under the heading ‘‘Taxation — United States Federal Income Taxation,’’ the Redomiciliation Merger is expected to qualify as a nontaxable reorganization under applicable U.S. federal income tax principles. If the Redomiciliation Merger qualifies as a nontaxable reorganization, no gain or loss generally will be recognized by Energy Infrastructure stockholders or warrant holders for U.S. federal income tax purposes as a result of their exchange of Energy Infrastructure common stock or warrants for the common stock or warrants of Energy Merger. Energy Infrastructure, however, generally will recognize gain (but not loss) for U.S. federal income tax purposes as a result of the Redomiciliation Merger equal to the excess, if any, of the fair market value of each of its assets over such asset’s adjusted tax basis at the effective time of the Redomiciliation Merger. It is expected that Energy Merger should not recognize any gain or loss for U.S. federal income tax purposes as a result of the Business Combination, and that certain ‘‘anti-inversion’’ provisions in the Internal Revenue Code of 1986, as amended, or the Code, will not apply to treat Energy Merger as a U.S. corporation after the Business Combination and Redomiciliation Merger or to restrict Energy Infrastructure from using any net operating losses that might otherwise be available to it to offset any gain it will recognize as a result of the Redomiciliation Merger.

 

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Quotation/Listing

ENERGY INFRASTRUCTURE HISTORICAL FINANCIAL INFORMATION

(in thousands, except per share data)

		For the period from August 11, 2005 (inception) to December 31,			Year ended December			Nine months ended September 30,						For the period from August 11, 2005  (inception) to September 30,
		2005			31, 2006			2006			2007			2007
Statement of Operations Data:
Operating expenses		$	(910	)	$	(5,924,945	)	$	(2,630,499	)	$	(9,903,261	)	$	(15,829,116	)
Interest income			1,781			2,182,796			935,940			3,914,062			6,098,639
Net (loss)			(1,879	)		(3,798,048	)		(1,722,802	)		(3,968,142	)		(7,768,069	)

		As of
		December 31, 2005			December 31, 2006			September 30, 2007
Balance Sheet Data:
Total assets (including cash and cash equivalents held in Trust Fund)		$	375,076		$	212,082,482		$	215,710,954
Total liabilities			351,955			7,327,955			6,195,094
Common stock subject to possible redemption			—			64,597,399			64,597,399
Stockholders’ equity			23,121			140,157,128			144,918,461

											Nine months ended
		Year ended December 31,									September 30,
		2004			2005			2006			2006			2007
		(in thousands of US$)
Statement of Operations Data
Revenue		$	6,635		$	9,399		$	7,580		$	5,496		$	8,135
Total operating expenses			(3,559	)		(4,591	)		(4,080	)		(2,579	)		(3,683	)
Total other expense			(941	)		(1,014	)		(715	)		(561	)		(507	)
Net income			2,134			3,794			2,784			2,356			3,945
Balance Sheet Data (at end of period) :
Cash			461			939			2,887						2,337
Total assets			36,089			52,833			51,335						48,503
Total liabilities			32,448			45,359			41,077						34,299
Total shareholder's equity			3,641			7,474			10,258						14,203
Cash Flow Data:
Net cash provided by operating activities			3,283			5,701			3,257			2,229			6,422
Net cash used in investing activities			(13,886	)		(16,794	)		4,191			1,098			(2,522	)
Net cash used in financing acitivties			9,410			11,571			(5,500	)		(4,050	)		(4,450	)

											Nine months ended
		Year ended December 31,									September 30,
		2004			2005			2006			2006			2007
		(in thousands of US$)
Statement of Operations Data
Revenue		$	11,960		$	11,582		$	11,811		$	8,823		$	9,544
Total operating expenses			(5,032	)		(5,274	)		(5,791	)		(4,508	)		(25,705	)
Total other expense			(2,336	)		(2,312	)		(1,860	)		(1,409	)		(2,335	)
Net income			4,592			3,995			4,160			2,906			(18,495	)
Balance Sheet Data (at end of period) :
Cash			298			1,546			2,128						3,354
Total assets			57,107			54,400			52,192						49,855
Total liabilities			52,479			45,812			40,264						65,923
Total shareholder's equity			4,627			8,588			11,928						(16,067	)
Cash Flow Data:
Net cash provided by operating activities			6,023			8,866			6,918			5,606			(13,794	)
Net cash used in investing activities			(56,585	)		32			(166	)		(335	)		(864	)
Net cash used in financing acitivties			50,860			(7,650	)		(6,170	)		(4,820	)		15,884

		Period from
		September 27, 2004			Year ended December 31,						Nine months ended September 30,
		to December 31, 2004			2005			2006			2006			2007
		(in thousands of US$)
Statement of Operations Data
Revenue		$	9,575		$	21,703		$	22,820		$	17,369		$	11,230
Total operating expenses			(1,770	)		(5,895	)		(6,208	)		(4,504	)		(4,925	)
Total other expense			(598	)		(4,300	)		(4,192	)		(3,161	)		(3,172	)
Net income			7,208			11,507			12,420			9,704			3,133
Balance Sheet Data (at end of period) :
Cash			19			1,951			7,480						10,693
Total assets			103,597			98,886			108,778						132,460
Total liabilities			96,388			80,170			80,642						101,191
Total shareholder's equity			7,208			18,716			28,136						31,269
Cash Flow Data:
Net cash provided by operating activities			(561	)		20,692			16,927			12,035			9,152
Net cash used in investing activities			(93,500	)		(1,960	)		(9,566	)		(9,633	)		(25,289	)
Net cash used in financing acitivties			94,080			(16,800	)		(1,832	)		(167	)		19,350

		Period from September 21, 2006 to December 31, 2006			Period from September 21, 2006 to September 30, 2006			Nine months ended September 30, 2007
		(in thousands of US$)
Statement of Operations Data
Revenue		$	605		$	-		$	11,484
Total operating expenses			(630	)		-			(6,745	)
Total other expense			(345	)		(28	)		(3,594	)
Net income			(371	)		(28	)		1,144
Balance Sheet Data (at end of period) :
Cash			436						1,467
Total assets			98,894						95,999
Total liabilities			99,265						95,225
Total shareholder's equity			(371	)					774
Cash Flow Data:
Net cash provided by operating activities			317			-			6,281
Net cash used in investing activities			(87,750	)		-			-
Net cash used in financing acitivties			87,869			-			(5,250	)

		Period from December 28, 2006 to December 31, 2006			Nine months ended September 30, 2007
		(in thousands of US$)
Statement of Operations Data
Revenue		$	-		$	10,371
Total operating expenses			(1	)		(5,512	)
Total other expense			(14	)		(5,042	)
Net income			(15	)		(182	)
Balance Sheet Data (at end of period) :
Cash			-			869
Total assets			11,340			111,600
Total liabilities			11,355			111,798
Total shareholder's equity			(15	)		(198	)
Cash Flow Data:
Net cash provided by operating activities			-			5,962
Net cash used in investing activities			-			(102,843	)
Net cash used in financing activities			-			97,750

		Elite Strategic Limited																	Shinyo Dream Limited
		Year ended December 31,									Nine months ended September			Period from January 01,2007 to September					Period from July 20, 2007 to September
		2004			2005			2006			30, 2006			06, 2007					30, 2007
		(in thousands of US$)
Statement of Operations Data:
Revenue		$	7,158		$	6,920		$	8,048		$	6,005		$	5,534				$	1,041
Total operating expenses			(4,335	)		(4,650	)		(4,982	)		(3,680	)		(3,575	)				(374	)
Total other expense			(1,794	)		(1,666	)		(2,296	)		(1,738	)		(1,526	)				(360	)
Net income			1,029			604			770			588			434					306
Balance Sheet Data (at end of period):
Cash			1,874			1,438			2,031						954					2,280
Total assets			58,754			56,622			54,910						51,998					79,614
Total liabilities			42,368			40,087			38,062						34,717					97,607
Total shareholders' equity			16,386			16,534			16,847						17,281					(17,993	)
Cash Flow Data:
Net cash provided by operating activities			3,541			3,517			3,988			3,035			1,134					1,475
Net cash used in investing activities			(1	)		(935	)		(210	)		(165	)		417					(68,701	)
Net cash used in financing activities			(2,406	)		(3,018	)		(3,184	)		(2,492	)		(2,628	)				69,506

											Nine months ended
		Year ended December 31,									September 30,
		2004			2005			2006			2006			2007
		(in thousands of US$)
Statement of Operations Data
Revenue		$	-		$	16,317		$	20,340		$	15,309		$	15,216
Total operating expenses			(1	)		(11,101	)		(14,378	)		(10,843	)		(10,494	)
Total other expense			(65	)		(1,339	)		(1,660	)		(1,297	)		(880	)
Net income			(66	)		3,877			4,303			3,169			3,842
Balance Sheet Data (at end of period) :
Cash			-			1,316			3,840						10,485
Total assets			5,250			39,325			37,953						40,804
Total liabilities			5,317			35,515			29,841						28,850
Total shareholders' equity			(67	)		3,810			8,112						11,954
Cash Flow Data:
Net cash provided by operating activities			-			7,080			6,916			3,388			8,878
Net cash used in investing activities			-			(32,440	)		(301	)		-			(643	)
Net cash used in financing activities			-			26,676			(4,091	)		(3,561	)		(1,590	)

		Period from December 22, 2004			Year ended						Nine months ended
		to December 31,			December 31,						September 30,
		2004			2005			2006			2006			2007
					(in thousands of US$)
Statement of Operations Data
Revenue		$	-		$	11,498		$	8,857		$	7,848		$	9,293
Total operating expenses			(1	)		(5,783	)		(7,853	)		(5,054	)		(6,773	)
Total other expense			(8	)		(2,274	)		(3,074	)		(2,342	)		(2,191	)
Net income			(9	)		3,441			(2,069	)		453			329
Balance Sheet Data (at end of period) :
Cash			-			1,462			357						1,144
Total assets			5,870			57,901			57,872						53,348
Total liabilities			5,879			54,469			56,509						51,656
Total shareholder's equity			(9,348	)		3,432			1,363						1,692
Cash Flow Data:
Net cash provided by operating activities			-			7,919			3,490			6,278			5,766
Net cash used in investing activities			-			(53,580	)		(1,916	)		-			(2,929	)
Net cash used in financing activities			-			47,123			(2,680	)		(3,380	)		(2,050	)

		Period from March 2, 2006 to December 31, 2006			Period from  March 2, 2006 to  September 30, 2006			Nine months ended September 30,  2007
		(in thousands of US$)
Statement of Operations Data
Revenue		$	20,028		$	14,669		$	10,599
Total operating expenses			(11,978	)		(8,770	)		(5,727	)
Total other expense			(2,333	)		(1,637	)		(1,766	)
Net income			5,717			4,262			3,105
Balance Sheet Data (at end of period) :
Cash			5,676						6,922
Total assets			57,719						54,521
Total liabilities			52,002						45,699
Total shareholder's equity			5,717						8,823
Cash Flow Data:
Net cash provided by operating activities			10,458			1,965			8,972
Net cash used in investing activities			(53,887	)		(53,887	)		-
Net cash used in financing activities			49,105			53,030			(7,725	)

Unaudited Pro Forma Summary Statements of Operations Data

(in thousands, except per share amounts)

 

		Nine months ended September 30, 2007			Year ended December 31, 2006
Revenue		$	92,448		$	100,089
Operating income		$	16,473		$	41,879
Net income		$	1,445		$	21,118
Net income per share – assuming no redemption of shares:
Basic		$	0.03		$	0.45
Diluted		$	0.03		$	0.40
Shares used in computation of net income per share, assuming no redemption of shares:
Basic		$	46,990,247		$	46,990,247
Diluted		$	52,298,792		$	52,298,792
Net income per share – assuming redemption of 6,525,118 of shares:
Basic		$	0.04		$	0.53
Diluted		$	0.03		$	0.46
Shares used in computation of net income per share, assuming redemption of 6,525,118 shares:
Basic		$	40,195,129		$	40,195,129
Diluted		$	45,503,674		$	45,503,674

MARKET PRICE AND DIVIDEND INFORMATION

 

Energy Infrastructure’s units commenced trading on the American Stock Exchange under the symbol “EIIU,” on July 18, 2006. Effective on October 4, 2006, Energy Infrastructure’s common stock and warrants began to trade separately under the symbols “EII,” and “EII.WS”, respectively, and the units ceased trading. The closing high and low sales prices of Energy Infrastructure’s units, common stock, and warrants as reported by the American Stock Exchange, for the quarters indicated are as follows:

 

		Units						Common Stock						Warrants
		High			Low			High			Low			High			Low
2006:
Third Quarter (July 21 to September 30)		$	10.00		$	9.70		$	-		$	-		$	-		$	-
Fourth Quarter (October 1 to October 4) (1)			9.85			9.74			-			-			-			-
Fourth Quarter (October 5 to December 31) (1)			-			-			9.55			9.11			0.78			0.27
2007:
First Quarter			-			-			9.64			9.31			0.86			0.45
Second Quarter			-			-			9.86			9.56			1.67			0.80
Third Quarter			-			-			9.9			9.61			1.66			0.82
Fourth Quarter (October 1 to December 5) (2)			-			-			10.83			9.71			1.61			1.07
Fourth Quarter (December 6 to December 31)			-			-			10.14			9.88			1.30			0.95
2008:
First Quarter (January 1, 2008 to February 8, 2008)			-			-			9.96			9.86			1.14			0.69

Nature of Business		Activity Period		Reasons for Rejection
Oil Refinery & Gas Stations		September 2006		Price disagreement
Tanker Fleet		October 2006		Seller decided not to sell
LPG fleet & Gas Trader		October 2006		Did not agree on valuation
Naptha Terminal		December 2006		Sellers opted for other buyer
Natural Gas Exploration		January 2007		Sellers' economics
Freight & Tanker Operator		February 2007		Seller did not meet the deadlines
Oil Refinery		May 2007		Did not agree on valuation
Tanker fleet		June 2007		Seller decided not to sell
Oil Rigs		July/Aug 2007		Seller decided not to sell