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NewLead Holdings Ltd. Announces $148 Million Acquisition of Five Vessels

June 25, 2010

PIRAEUS, Greece, June 25 /PRNewswire-FirstCall/ — NewLead Holdings Ltd. (Nasdaq: NEWL) (“NewLead” or the “Company”) today announced it has signed a Letter of Intent for the dropdown of five dry bulk vessels, including two newbuildings, and the right of first refusal for three newbuildings from Grandunion Inc. (“Grandunion”). The transaction is expected to be concluded in the third quarter of 2010.

Total consideration for the dropdown of the five vessels is approximately $148 million, which includes assumed debt and shipyard financing. NewLead also secured the right of first refusal for three 81,000 dwt Kamsarmaxes, being constructed at a first-class shipyard in Korea, scheduled for delivery in 2013 with long-term charters attached. As a result of this transaction, NewLead’s fleet, including newbuildings, will consist of 24 vessels-nine product tankers and 15 dry bulk carriers.

Michael Zolotas, President and Chief Executive Officer stated, “NewLead continues to expand its fleet in line with its growth strategy. Since NewLead’s recapitalization during the fourth quarter of 2009, the Company acquired 17 vessels, including five newbuildings, while divesting inefficient non-core vessels and exiting the container sector. By expanding and diversifying the fleet, NewLead has positioned itself to capture opportunities in the two segments in which it operates. We will continue to pursue our fleet growth strategy as we build the Company’s competitive position.”


    Dropdown Vessels:

                      Size                  Built
    Vessel            (dwt)    Type         /Delivery
    ------           -----     ----         ---------
    Grand
     Spartounta       135,070  Capesize          1989
    Grand Esmeralda    69,458  Panamax           1990
    Grand Markela      71,733  Panamax           1990
    SPP Hull H-4023    35,000  Handysize    NB 2/2011
    SPP Hull H-4029    35,000  Handysize    NB 7/2012
    ---------------    ------  ---------    ---------
    Total Dwt:        346,261
    ----------        -------

                    Charter Rate
    Vessel          (daily, net)             Term/Expiration
    ------          ------------             ---------------
    Grand
     Spartounta     $20,625                   min: July 2010
                                              max: Oct. 2010

    Grand Esmeralda $10,200 (net) + profit    min: Dec. 2011
                    sharing 50/50(1)          max: Apr. 2012

    Grand Markela   $21,972                   min: Feb 2013
                                              max: Jun 2013

    SPP Hull H-4023 $12,000 base rate,        12 years +/-4 months
                    $12,000-14,000 100% for
                    charterers acc - profit
                    sharing 60% charterers,
                    40% owners above $14,000(2) 

    SPP Hull H-4029 $12,000 base rate, $12,000 12 years +/-4 months
                    - 14,000 100% for
                    charterers acc - profit
                    sharing 60% charterers,
                    40% owners above $14,000(2)
    --------------- ---------------------------  ------------------
    Total Dwt:        346,261
    ----------        -------


    NewLead's Fleet:

                    Size                    Year
    Name            (dwt)   Vessel Type     Built
    ----           -----    -----------    -----
    Product
     Tanker
     Vessels
    Stena Compass   72,736  Panamax           2006
    Newlead
     Compassion     72,782  Panamax           2006
    Newlead Avra    73,495  Panamax           2004
    Newlead
     Fortune        73,495  Panamax           2004
    Hiotissa        37,329  Handymax          2004
    Hiona           37,337  Handymax          2003
    -----           ------  --------          ----
    Nordanvind(4)   38,615  Handymax          2001
    Ostria(4)       38,615  Handymax          2000
    High Land       41,450  Handymax          1992
    ---------       ------  --------          ----
    Dry bulk
     Vessels
    Newlead
     Victoria       75,966  Panamax           2002

    Brazil         151,738  Capesize          1995
                   -------  --------          ----
    Australia      172,972  Capesize          1993
                   -------  --------          ----
    China          135,364  Capesize          1992
                   -------  --------          ----
    Grand Ocean    149,498  Capesize          1990
                   -------  --------          ----
    Grand
     Venetico      134,982  Capesize          1990
                   -------  --------          ----
    Grand Rodosi    68,788  Panamax           1990
    ------------    ------  -------           ----
    Newbuildings
    ------------
                                          Expected
                    Size                  Delivery
    Name            (dwt)   Vessel Type   Date
                   -----    -----------   --------
                             Post-
    TBN             92,000   Panamax     Q2 2011
                    ------     --------    -------
    TBN             80,000  Kamsarmax    Q4 2010
    ---             ------    ---------    -------
    TBN             80,000  Kamsarmax    Q4 2011
    ---             ------    ---------    -------

                                 Charter Rate
                                   (daily,
    Name                             net)             Charter Expiration
    ----                         ------------         ------------------
    Product Tanker Vessels
    Stena Compass               $18,233 + 30% profit
                               share above $26,000(3)    December 2010
    Newlead Compassion                                   Spot
    Newlead Avra                                         Spot
    Newlead Fortune                                      Spot
    Hiotissa                   $19,013 + profit sharing
                            above $19,500                min: April 2011
                                                         max: June 2011
    Hiona                     $19,013 + profit sharing
                            above $19,500                min: March 2011
                                                         max: May 2011
    Nordanvind(4)                                        Spot
    Ostria(4)                                            Spot
    High Land                    $8,181                  July 2010
    ---------                    ------                  ---------
    Dry bulk Vessels
    ----------------
    Newlead Victoria              $16,875                min: October 2010
                                                         max: January 2011
                                  ----------------------------------------
                               The net daily hire
                               to be the average of
                               the 4 Baltic Panamax      Abt 20 to abt 22
                               Timecharter Routes        months (abt means
                               published by the Baltic   +/-15 days in
                               Exchange over the          chopt)
                               previous 14 days plus
                               5%(5)
    Brazil                     $28,985(6)                min: October 2014
                                                         max: February 2015
    Australia                  $20,391                   min: November 2011
                                                         max: January 2012
    China                      $12,753                   min: November 2015
                                                         max: October 2016
    Grand Ocean                $15,360                   min: December 2010
                                                         max: April 2011
    Grand Venetico             $17,760                   min: June 2011
                                                         max: October 2011
    Grand Rodosi               $24,375                   June 29,2010
    ------------               -------                   ------------
    Newbuildings
    ------------
                               Charter Rate              Charter term
                               (daily, net)
    Name
    -------------               ------------             ------------

    TBN                        $14,438 + 50/50 Profit
                               Sharing when 110% of BPI
                               route index exceeds
                               $17,000                 Seven years time
                                                       charter
    ----------------------     -----------------        ----------------

    TBN                        $28,710(7)              Seven years time
                                                       charter
    ---                        ---------               -----------------
    TBN                        $27,300                Seven years time
                                                       charter
    ---                        -------                -----------------

     (1) Profit sharing is based on 86% of the Baltic Panamax Average 4TC
      Routes.
     (2) Profit sharing based on open book accounting on actual earnings.
     (3) Vessel is under a bareboat charter party agreement. The operating
      expenses are for the account of the charterer. Accordingly, the vessel's
      Time Charter Equivalent (TCE) rate is grossed up to reflect estimated
      daily operating costs.  As a result, the vessel's charter rate is
      adjusted to a TCE rate of $24,933, to include estimated operating costs
      of $6,700.
     (4) In March 2010, MOAs for the sale of these vessels were executed and
      the sales are expected to close during the third quarter of 2010.
     (5) Less 5% commissions
     (6) $28,985 for the first and second years, $26,180 plus 50/50 profit
      sharing for all years thereafter, (85% of the Cape Spot 4 TCE Avg. Minus
      $26,600).
     (7) $28,710 five years charter, plus two optional years (1+1). Owners'
      put option for up to two year's charter at a net charter rate between
      $20,000 and $28,000. This fixture is subject to first Charterer not
      exercising their optional years, in order to secure a total seven-year
      charter duration for the vessel.

About NewLead Holdings Ltd.

NewLead Holdings Ltd. is an international shipping company that owns and operates product tankers, and dry bulk vessels. NewLead’s common stock is listed on the NASDAQ Global Select Market where it trades under the symbol “NEWL”. To learn more about NewLead Holdings Ltd., please visit the new website at www.newleadholdings.com.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995

This press release includes assumptions, expectations, projections, intentions and beliefs about future events. These statements, as well as words such as “anticipate,” “estimate,” “project,” “plan,” and “expect,” are intended to be ”forward-looking” statements. We caution that assumptions, expectations, projections, intentions and beliefs about future events may vary from actual results and the differences can be material. Forward-looking statements include, but are not limited to, such matters as future operating or financial results; statements about planned, pending or recent acquisitions and business strategy. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although NewLead believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, NewLead cannot assure you that it will achieve or accomplish these expectations, beliefs or projections described in the forward looking statements. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including changes in charter rates and vessel values, failure of a seller to deliver one or more vessels, and other factors discussed in NewLead’s filings with the U.S. Securities and Exchange Commission from time to time. NewLead expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in NewLead’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

SOURCE NewLead Holdings Ltd.


Source: newswire



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