News Archive 2006

Letter to Shareholders
Notice of EGM
28 April 2006

Following the Notice of EGM announcement made by GO Carriers on 10 April 2006, the Company announces that it has issued a letter to all shareholders today which provides further information ahead of the EGM scheduled for 11.00 a.m. on 19 May in Jersey. The letter also sets out the Board’s response to the Resolutions that are to be considered at the EGM and recommends shareholders to vote against these Resolutions. A copy of the letter is detailed below as well as the formal notice for the EGM. Copies of these documents are available from the EGM 2006 page.

 

28 April 2006

To all Shareholders of
Global Oceanic Carriers Limited


Dear Shareholder,

Global Oceanic Carriers Limited ("Company”)

I enclose a notice for an Extraordinary General Meeting of the Company (“EGM”) requisitioned by a shareholder, to be held at 11.00 a.m. BST on 19 May 2006 at La Place Hotel, La Route du Coin, St. Brelade, Jersey JE3 8BT. A form of proxy in respect of the EGM is also enclosed. The meeting has been convened at the request of HSBC Global Custody Nominee (UK) Limited and the resolutions to be considered at the EGM propose that the existing Board be replaced with a new Board which will review the business of the Company and propose a strategy for the Company, as detailed in the notice of the EGM.

The purpose of this letter is to set out your Board’s response to these resolutions ("Resolutions”) and to recommend that you vote AGAINST the Resolutions for the reasons set out below.

THIS LETTER IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the action you should take regarding this letter, you are recommended immediately to consult your stockbroker, bank manager, solicitor, accountant or other independent financial adviser duly authorised under the Financial Services and Markets Act 2000.

If you have sold or transferred all of your shares in Global Oceanic Carriers Limited, please forward this letter at once, together with the accompanying notice of Extraordinary General Meeting and form of proxy, to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was effected, for onward transmission to the purchaser or transferee.

Background

The Company floated in May 2005. At that time the Company was committed to purchase four vessels as follows: three Panamax ships (GO Faith, GO Public and the Panormos Trader) and a smaller Handymax vessel (GO Pride). The GO Public was purchased with a time charter of US$34,500 per day and the GO Pride came with a time charter of US$18,000 per day. Both charters have recently expired, but the ships continue to be chartered at favourable market rates compared to other vessels of a similar age and size.

The GO Faith and Panormos Trader were on long term charters at the time their respective acquisitions were negotiated. It had been hoped that the owner of the vessels would secure a continuation of the charters, but charter rates could not be agreed. The GO Faith was delivered without a long term charter in place, and on delivery to the Company, was put on the spot market and has been fully employed, except when in routine maintenance, since it was acquired. However dry bulk charter rates declined substantially last summer and the rates achievable for the GO Faith were lower than had been anticipated by your Board and industry commentators.

In light of the substantial change in the market, the Board delayed the acquisition of the fourth vessel, the Panormos Trader, to see whether the market would recover to a level that would make the acquisition commercially sensible.

As a consequence of the decline in dry bulk charter rates, the value of dry bulk vessels was also being affected substantially. The purchase price of the Panormos Trader had been contracted in January 2005 at US$17.2 million, but at November 2005 your Board, in consultation with its ship valuers, considered its value had declined to around US$9 million.

Consequently, in December 2005, the Directors determined that the purchase of the Panormos Trader at the contracted price was not in the Company’s or the shareholders’ interests. We therefore negotiated the cancellation of the planned purchase. Though the Company was liable for the full amount of the contracted price, the settlement which was negotiated by the Board represented a considerable saving of shareholder value. Inevitably, however, this settlement came at a cost which impacted the Company's interim financial results for the period to 30 September 2005.

The impact upon the Company's interim financial results was very disappointing but we consider that the decision not to proceed with the purchase of the Panormos Trader was the appropriate decision for the Company as dry bulk charter rates and ship values have remained at much lower levels than at the point of flotation.

The decision to terminate the contract for the fourth ship has allowed the Company to improve some of the terms of the initial acquisition finance loan from Bayerische Hypo-Und Vereinsbank AG. Until the Panormos Trader acquisition contract was terminated, the Company was required to drawdown all of the acquisition loan facility for the acquisition of four vessels, obliging the Company to service the corresponding debt, including significant capital repayments, from an income generated by only three vessels. This was a significant burden for the Company. However, the Company has repaid the bank approximately US$9.6 million of capital in eight months, which represents approximately 34% of the core debt for three vessels. The repayment schedule has been renegotiated by your Board and is now more appropriate for the income generated by three, as opposed to four, vessels.

From late September until December 2005, the Directors explored with the Company’s brokers, Collins Stewart Limited, the prospects for a further fund raising to replace the bank debt and provide the necessary capital to purchase additional vessels on more favourable terms. We regarded the purchase of additional vessels, on the right terms, as a key component in the development of the business to create the necessary economies of scale.

Due to an apparent lack of investor appetite, we did not secure sufficient support for that fundraising on appropriate terms to enable us to proceed with that plan. Consequently, in early 2006, your Directors undertook a review of the strategic options available to the Company with a view to seeking how best to secure shareholder value going forward.

Since then a number of different proposals in connection with the development of the Company have been generated. Inevitably conditions of confidentiality apply to such proposals. However, the proposals include:

  • the outright sale of the Company;
  • the injection of further vessels and/or cash into the Company; and
  • the injection of further vessels and cash and an offer to shareholders to purchase their existing shareholdings.

In principle the Directors favour defined approaches of this nature as they demonstrate a willingness to inject cash or assets and/or crystallise shareholder value. The Directors note the possibility that these proposals may not lead to a binding contract, however your Directors are encouraged by the level of interest shown.

It is worth highlighting that the continuance of the existing Board is not a pre-condition to any of the current proposals.

On 7 April 2006, Globus Shipping Inc (“Globus”) announced its initiative in light of the EGM requisitioned by HSBC Global Custody Nominee (UK) Limited to replace the existing Board. Globus stated it would use independent third parties to value the Company’s fleet and, within six weeks of the new Board’s appointment, would revert to shareholders, enabling them to vote freely on the alternatives of:

  • winding up the Company and returning cash to shareholders; or
  • pursuing a "Globus build strategy" (with a minimum US$20 million injection of new capital by Globus, offering existing shareholders the ability to participate should they wish to); or
  • any other credible alternative.

Initially, Globus indicated to the Board that it wished to inject a fleet of vessels into the Company, and indicated that it would require a significant majority of the enlarged share capital by way of consideration. The Board understands that Globus sold this fleet and, following this sale, Globus has amended its proposal to that set out in the notice of the EGM. However, the Board notes that Globus, in its various approaches to the Company, has not committed to any proposal that recognises or crystallises a value for the existing shareholders, had insisted that any fees it incurred be underwritten by the Company and had demanded exclusivity prior to commencing detailed discussions.

The Board believes the Globus approach to be less welcome since it is less well defined in comparison with other proposals and it does not commit Globus to a particular course of action.

Current Position

The Board believes that the Company's fleet has traded profitably since flotation. Other than in respect of the cost of the negotiated settlement in connection with the Panormos Trader acquisition, the Company operated profitably to the period ended 30 September 2005.

Apart from scheduled maintenance periods, the three vessels have been chartered throughout the period. The Company has repaid approximately US$9.6 million of debt since flotation. The Board remains convinced that the acquisition, on the right terms, of further vessels is essential.

Your Board wishes to see shareholders presented with proposals which best suit shareholders’ expectations in light of current circumstances. The Directors further believe that, as the process to achieve such a position is already well developed, it would not be in shareholders’ interests to interrupt or delay this process by replacing the existing Board at this juncture.

The Directors have appointed Brewin Dolphin Securities Limited ("Brewin Dolphin") to assist the Board in the process of assessing the various proposals and to advise them in relation to the recommendation to be made in due course to shareholders.

The Directors anticipate that such a recommendation will be made by early June 2006.

Summary

In summary:

  • your Board believes that a number of strategic alternatives are available to the Company;
  • the continuance of the current Board is not a precondition to any of these proposals and, accordingly, your existing Board does not have any conflict of interest in assessing the various proposals;
  • the Board has appointed Brewin Dolphin to assist in reviewing the various alternative proposals; and
  • the Board is in the process of reviewing these proposals (and will review any other alternatives made to the Board in the interim) and intends to make a clear recommendation to shareholders by early June 2006.

The Board believes that the approach from Globus is not sufficiently developed and the Resolutions to replace the current Board are unhelpful to shareholders as it may deprive them of the opportunity of a proper assessment of the proposals currently being considered by the Board and any other proposals that may be received.

Action to be taken

You will find enclosed with this letter the notice of the EGM together with a form of proxy. All shareholders are requested to complete and return a copy of the form of proxy to Riviera Nominees Limited, the Company Secretary, at 6 Britannia Place, Bath Street, St Helier, Jersey JE2 4SU, so as to be received as soon as possible and, in any event, by no later than 11.00 a.m. on 17 May 2006. If you complete and return the form of proxy, you will not be prevented from attending and voting in person at the EGM if you so wish.

Recommendation

The Board recommends that you vote AGAINST the resolutions proposed at the EGM on 19 May 2006 (as each of the members of your existing Board intends to do in respect of its beneficial holdings of shares in the Company).

Yours sincerely,

Konstantinos Dimitriou
Chairman
Global Oceanic Carriers Limited

Notice of Extraordinary General Meeting

Notice is given that an extraordinary general meeting of the Company (“EGM”) will be held at La Place Hotel, La Route du Coin, St. Brelade, Jersey JE3 8BT, Channel Islands on 19 May 2006 at 11.00 a.m. BST for the purpose of considering and, if thought fit, adopting the following Ordinary Resolutions at the meeting, or any adjournment thereof:

  1. That Mr. Konstantinos Dimitriou, a Director of the Company be removed from his office as a Director and Non-Executive Chairman of the Company with effect from the date of the EGM.

  2. That Mr. Vassilis Vintiadis, a Director of the Company be removed from his office as Director with effect from the date of the EGM.

  3. That Mr. Douglas Kearney, a Director of the Company be removed from his office as Director with effect from the date of the EGM.

  4. That Mr. Peter St George, a Non-Executive Director of the Company be removed from his office as Non-Executive Director with effect from the date of the EGM.

  5. That Mr. Carlos Campbell, a Non-Executive Director of the Company be removed from his office as Non-Executive Director with effect from the date of the EGM.

  6. That Mr. George Fidakis be appointed as a Director and Chairman of the Company with effect from the date of the EGM.

  7. That Mr. George Karageorgiou be appointed as a Director of the Company to fulfil the role of Chief Executive Officer with effect from the date of the EGM.

  8. That Mr. Amir Eilon and Mr. Arjun Batra be appointed as Non-Executive Directors of the Company with effect from the date of the EGM.

  9. Following the above mentioned removals and appointments of Directors of the Company, the newly constituted board of Directors of the Company shall be under an obligation to return to the shareholders for their review within six weeks of the date of the EGM proposals to cover the following matters:

    1. The disposal of all or any assets of the Company through independent unconnected brokers and returning the proceeds to shareholders;
    2. The injection of new capital and/or assets into the Company by Globus Shipping Inc. in a fashion that will ensure that Globus Shipping Inc. will gain control over the Company; and/or
    3. Any other proposals which the board of Directors of the Company consider to be credible and value enhancing for the Company.
By order of the Board
Riviera Nominees Limited
Secretary to the Company

Dated: 28 April 2006

Registered Office Address: 6 Brittania Place, Bath Street, St. Helier, Jersey JE2 4SU, Channel Islands

NOTES:

  1. A member entitled to attend and vote at the meeting convened by the notice set out above is entitled to appoint a proxy to attend and, on a poll, to vote in his place. A proxy need not be a member of the Company. Only members and their proxies may attend the meeting.

  2. A form of proxy is enclosed. To be effective, it must be deposited at the office of the Company's secretary so as to be received no later than 11.00 a.m. BST on 17 May 2006. Completion of the proxy does not preclude a member from subsequently attending and voting at the meeting in person if he or she so wishes.

  3. If a form of proxy is not deposited, delivered or received as specified it shall be invalid. No instrument appointing a proxy shall be valid after the expiry of twelve months from the date named in it as the date of its execution, except at an adjourned meeting or on a poll demanded at a meeting or an adjourned meeting in cases where the meeting was originally held within twelve months from such date.

  4. A member may appoint more than one proxy to attend on the same occasion. When two or more valid but differing instruments of proxy are delivered, deposited or received in respect of the same share for use at the same meeting and in respect of the same matter, the one which is last validly delivered, deposited or received (regardless of its date or of the date of its execution) shall be treated as replacing and revoking the other or others as regards that share. If the Company is unable to determine which instrument was last validly delivered, deposited or received none of them shall be treated as valid in respect of that share.

  5. A corporation (whether or not a company within the meaning of the Companies (Jersey) Law 1991 as amended) which is a member may, by resolution of its directors or other governing body, authorise such person (or if, but only if, such corporation is a custodian voting in its capacity as such, persons) as it thinks fit to act as its representative at any meeting of the Company. Any person so authorised shall be entitled to exercise the same powers on behalf of the corporation (in respect of that part of the corporation's holdings to which the authority relates) as the corporation could exercise if it were an individual member. The corporation shall be deemed to be present in person at any such meeting if a person so authorised is present at it; and all references to attendance and voting in person shall be construed accordingly.

  6. Any person appointed as proxy to attend and to vote on behalf of a corporation, will be required to produce a certified copy of the resolution so authorising him or such other evidence of his authority reasonably satisfactory to them before permitting him to exercise his powers.

 

For further information:

Global Oceanic Carriers Limited  
Vassilis Vintiadis, Chief Executive Officer Tel: +44 (0) 20 7398 7700
vassilis@gocarriers.com  


Media enquiries:
Abchurch  
Henry Harrison-Topham / Charlie Jack Tel: +44 (0) 20 7398 7700
henry.ht@abchurch-group.com www.abchurch-group.com

 

Notes to editors

Global Oceanic Carriers Limited, is a newly formed shipping company comprising of ship ownership, management and chartering. The company is based in Piraeus, Greece and incorporated in Jersey. The Company has acquired three vessels and will use the extensive shipping experience of the management and the dynamic market conditions to build a fleet for long term charter revenue.

The Company’s fleet comprises of two Panamax bulk carriers and one Handysize vessel with an aggregate carrying capacity of 171,941 Dwt. The Company has brought together the considerable shipping expertise and contacts of the Board, in particular the CEO, Vassilis Vintiadis, the founder and owner of Niva Shipping Limited a 27 year old shipping company based in Piraeus, Greece with strategic relationships primarily focused on China and India.

GO Carriers is listed on the AIM market, stock code GOC.L