TOP Ships, which is focused on the global transport of petroleum cargoes and liquids, as well as dry bulk, via a fleet (300.000 DWT capacity) of five 2009 Handymax double hull tankers and a 2002 dry carrier vessel, reported some major news today as they entered a series of three stock purchase agreements with an AMCI Poseidon Investment Fund affiliate, whereby TOPS will shed each of its six existing vessel subsidiaries for some $173M in cash, minus roughly $135M in debt and swap obligations that will be assumed by the buyers.

A key target for TOPS here will be to clean the balance sheet of any further liabilities and organize net proceeds towards (along with future borrowing) a new vessel acquisition program, in the process modernizing their fleet capabilities. A big move no doubt for this established maritime shipping outfit, but one that is well-timed and we are just looking for shareholder approval on the stock purchase agreements here, as well as that of the bank lenders and charterers (if required), in addition to any other customary closing conditions.

Next AGM for TOPS will be the end of September and markets will get a closer look at the deal’s trajectory then, with a tentative closure for these transactions slated to late October. A decline in charter rates in the drybulk market created a procedural storm in 2008 and with the still largely volatile Baltic Drybulk Index (USD Weighted Composite Index of BCI/BPI/BHMI, the Cape/Panamax/Supramax indexes which represents the price on transporting the major raw materials by sea) trending back up in 2013 to the 1,300 range, now is a great time to overhaul company infrastructure like this and repackage operations more competitively.

Investors will be eager to get a look at the new program for acquiring ships and TOPS will want to update markets as the annual general meeting of shareholders approaches later this month.

For more info on TOP Ships, visit www.TopShips.org

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