B+H Ocean Carriers Ltd. Announces Intent to Repurchase up to 600,000 Shares of Its Common Stock through a Modified ''Dutch Au...
20 Ottobre 2008 - 3:11PM
Business Wire
B+H Ocean Carriers Ltd. (AMEX: BHO) today announced that it will
commence a modified �Dutch Auction� tender offer to purchase up to
600,000 shares of its common stock at a price per share not less
than $4.00 and not greater than $5.00. The tender offer is expected
to begin on October 20, 2008, and to expire on November 17, 2008,
at 12:00 midnight, New York City time, unless extended. BHO will
purchase up to 600,000 common shares in the offer (representing
approximately 8.8% of BHO�s outstanding common shares. Tenders of
shares must be made prior to the expiration of the tender offer and
may be withdrawn at any time prior to that time. On the terms and
subject to the conditions of the tender offer, BHO�s stockholders
will have the opportunity to tender some or all of their shares at
a price within the $4.00 to $5.00 per share range. Based on the
number of shares tendered and the prices specified by the tendering
stockholders, BHO will determine the lowest per share price within
the range that will enable it to buy 600,000 shares, or such lesser
number of shares that are tendered and not withdrawn. All shares
accepted in the tender offer will be purchased at the same price
per share even if the stockholder tendered at a lower price. If
stockholders tender more than 600,000 shares at or below the
purchase price per share, BHO will purchase the shares tendered at
or below the determined per share purchase price by those
stockholders, subject to a preference for �odd lots� tendered,
proration and certain other factors. BHO may continue after the
tender offer its previously announced plan for the purchase of
common shares on the open market from time to time, depending on
market conditions. The tender offer is not contingent upon any
minimum number of shares being tendered. The tender offer is,
however, subject to a number of other terms and conditions. BHO�s
board of directors has approved the tender offer because it
believes that the modified �Dutch Auction� tender offer is a
prudent use of BHO�s financial resources given its current
liquidity and prospective capital requirements. Subject to certain
limitations and legal requirements, BHO reserves the right to
accept for payment, according to the terms and conditions of the
offer, up to an additional 2% of BHO�s outstanding shares of common
stock (or 136,260 shares) without amending or extending the offer.
In exercising this right, we may increase the per share purchase
price to allow us to purchase all such additional shares. BHO
believes that the modified �Dutch Auction� tender offer provides a
mechanism to provide stockholders with the opportunity to tender
all or a portion of their shares and thereby receive a return of
some or all of their investment if they so elect. In addition,
stockholders who do not participate in the offer will automatically
increase their relative percentage ownership interest in BHO and
its future operations at no additional cost to them. None of BHO,
its board of directors, the depositary or the information agent is
making any recommendations to stockholders as to whether to tender
or refrain from tendering their shares into the tender offer.
Stockholders must decide how many shares they will tender, if any,
and the price within the stated range at which they will offer
their shares for purchase by BHO. The Company has been advised that
none of its directors or executive officers intends to tender
shares pursuant to the offer. D.F. King & Co., Inc. is the
information agent for the Offer. The Offer to Purchase, a letter of
transmittal and related documents will be mailed shortly to
stockholders of record and also will be made available for
distribution to beneficial owners of BHO�s common stock. For
questions and information, please call the information agent at
(800) 549-6746. THIS PRESS RELEASE IS FOR INFORMATIONAL PURPOSES
ONLY AND DOES NOT CONSTITUTE AN OFFER TO BUY OR THE SOLICITATION OF
AN OFFER TO SELL SHARES OF THE B+H OCEAN CARRIERS LTD. COMMON
STOCK. THE TENDER OFFER IS BEING MADE ONLY PURSUANT TO THE OFFER TO
PURCHASE, LETTER OF TRANSMITTAL AND RELATED MATERIALS THAT BHO WILL
SHORTLY BE DISTRIBUTING TO ITS STOCKHOLDERS AND FILING WITH THE
SECURITIES AND EXCHANGE COMMISSION. STOCKHOLDERS AND INVESTORS
SHOULD READ CAREFULLY THE OFFER TO PURCHASE, LETTER OF TRANSMITTAL
AND RELATED MATERIALS BECAUSE THEY CONTAIN IMPORTANT INFORMATION,
INCLUDING THE VARIOUS TERMS OF, AND CONDITIONS TO, THE TENDER
OFFER. STOCKHOLDERS AND INVESTORS MAY OBTAIN A FREE COPY OF THE
TENDER OFFER STATEMENT ON �SCHEDULE TO,� THE OFFER TO PURCHASE,
LETTER OF TRANSMITTAL AND OTHER DOCUMENTS THAT BHO WILL SHORTLY BE
FILING WITH THE SECURITIES AND EXCHANGE COMMISSION AT THE
COMMISSION�S WEBSITE AT WWW.SEC.GOV OR BY CONTACTING D.F. KING
& CO., INC., THE INFORMATION AGENT FOR THE TENDER OFFER AT
1-800-549-6746. STOCKHOLDERS ARE URGED TO CAREFULLY READ THESE
MATERIALS PRIOR TO MAKING ANY DECISION WITH RESPECT TO THE TENDER
OFFER. About B+H Ocean Carriers Ltd. General. The Company was
organized as a corporation under Liberian law on April 28, 1988 to
engage in the business of acquiring, investing in, owning,
operating and selling vessels for dry bulk and liquid cargo
transportation. As of October 13, 2008, the Company owned and
operated five medium-range product tankers, one Panamax product
tanker and five ore/bulk/oil combination carriers (�OBOs�). The
Company also owns a 50% interest in a company which is the
disponent owner of a 1992-built 75,000 DWT Combination Carrier,
effected through a lease structure. Each vessel accounts for a
significant portion of the Company�s revenues. The Company�s fleet
of product tankers consists of �handy-size� vessels which are
between 30,000 and 50,000 summer dead-weight tons (�DWT�), and are
able, by reason of their smaller size, to transport commodities to
and from most ports in the world, including those located in less
developed third-world countries. The Company�s Panamax product
tanker is 68,500 DWT. Product tankers are single-deck oceangoing
vessels designed to carry simultaneously a number of segregated
liquid bulk commodities, such as refined petroleum products,
vegetable oils, caustic soda and molasses. The Company�s OBOs are
between 74,000 and 84,000 DWT. OBOs are combination carriers used
to transport liquid, iron ore or bulk products such as coal, grain,
bauxite, phosphate, sugar, steel products and other dry bulk
commodities. The Company is organized as a corporation in Liberia,
and its principal executive office is located at Par La Ville
Place, 14 Par La Ville Road, Hamilton HM 08, Bermuda (telephone
number (441) 295-6875). Recent developments. Over the past several
weeks, the shipping industry has suffered significant adverse
developments in both dry cargo freight rates and the availability
of bank finance for ship owners. Additionally, there has been a
widespread loss of trade finance for purchasers and shippers of
bulk commodities, particularly dry bulk. As of October 16, 2008,
the Baltic Freight Index was 1,506, which is 12.8% of its May 20,
2008 all-time high level of 11,793. It is difficult to describe the
turmoil being experienced in the current shipping markets, both for
ship values and freight rates. In the past two or three weeks, the
Company has sustained the default of two of its dry cargo
charterers, ICI on MV SACHEM and Hubel Shipping on MV ALGONQUIN.
The rates currently obtainable for short term employment for these
vessels are approximately one third of the contractual rate due
from the defaulting charterers. An agreement to sell MV ALGONQUIN
has been entered into and a 20% deposit has been received from the
buyer for a sale at $18.0 million (a lower price than initially
agreed due to market conditions) for delivery in first quarter of
2009. This transaction necessitated a third quarter of 2008 vessel
impairment charge of approximately $6.0 million. A second vessel,
the 50%-owned OBO SEAPOWET, had been put under contract for sale
and was expected to close on October 20, 2008. On October 9, buyers
informally advised that they would not be able to close, and
official word was received on October 15, with buyers acknowledging
that they will forfeit their $5.0 million deposit. The adverse
effects of the global banking and liquidity crisis on shipping and
on the Company cannot be quantified, but they are significant. The
Company believes that of its seven current bank lenders, five are
presently unable to make or fund new commitments, and the other two
are unwilling to do so. Since December 2006, the Company purchased
a series of puts on the Panamax Bulkcarrier Index for the average
of four time charters, known as �PJAX4TC�. A number of the previous
quarters of reported earnings have included non-cash losses
attributable to the deep decline in market value of these puts.
However, in the present extreme dry cargo freight market decline,
this portfolio of puts has increased in value dramatically. The
extreme volatility of the underlying rates makes it difficult to
refer to a �present� value, but results will show a non-cash
increase in the value of these puts in excess of $13 million. A
number of these puts, above 60% in value, are pledged as additional
collateral on the mortgage financing of MV SACHEM and any monthly
settlements or sale proceeds will be blocked or used to prepay
mortgage debt. Operations remain on a fairly steady state for
vessels other than MV ALGONQUIN and MV SACHEM. MV CAPT. T.J. HUDNER
went into the yard for conversion to bulk carrier in August, before
the major collapse of dry rates and the loss of the two charters
described above. It is not possible to change or stop that work
without incurring substantial losses, so it remains on schedule for
completion this December. Notwithstanding recent oil price
declines, the Company remains pleased with the employment prospects
for its accommodation work barge, �SAFECOM 1�, now under
construction and scheduled for completion in fourth quarter of
2009. Miscellaneous. This press release, including any documents
incorporated by reference or deemed to be incorporated by
reference, contains �forward-looking statements,� which are
statements relating to future events, future financial performance,
strategies, expectations and competitive environment. Words such as
�may,� �will,� �should,� �could,� �would,� �predicts,� �potential,�
�continue,� �expects,� �anticipates,� �future,� �intends,� �plans,�
�believes,� �estimates� and similar expressions, as well as
statements in the future tense, identify forward-looking
statements. Stockholders should not read forward-looking statements
as a guarantee of future performance or results. They will not
necessarily be accurate indications of whether or at what time such
performance or results will be achieved. Forward-looking statements
are based on information available at the time those statements are
made and/or management�s good faith belief at that time with
respect to future events. Such statements are subject to risks and
uncertainties that could cause actual performance or results to
differ materially from those expressed in or suggested by the
forward-looking statements. Important factors that could cause such
differences include, but are not limited to: uncertainties related
to BHO�s ability to implement BHO�s business strategy;
uncertainties related to litigation; economic and political
conditions in the U.S. and abroad; and other risks outlined in
BHO�s filings with the SEC. All forward-looking statements are
effective only as of the date they are made and BHO disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. These risks and uncertainties include risks related
to BHO�s businesses as well as the factors relating to the
transactions discussed in BHO�s offer to purchase. Stockholders
should not place undue reliance on the forward-looking statements,
which speak only as to the date of the offer to purchase or the
date of documents incorporated by reference.
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