Star Bulk Carriers Corp (SBLK) 2009 Q4 法說會逐字稿

Thank you for standing by ladies and gentlemen. And welcome to the Star Bulk conference call on the fourth-quarter and full-year 2009 financial results. We have with us Mr. Akis Tsirigakis, Chairman and Chief Executive Officer; and Mr. George Syllantavos, Chief Financial Officer of the company.

At this time all participants are in a listen-only mode. There will be a presentation followed by a question and answer session at which time, if you wish to ask a question (Operator Instructions). I must advise you that this conference is being recorded today, Wednesday, February 24, 2010.

We will now pass the floor to one of your speakers today, Mr. Akis Tsirigakis. Please go ahead sir.

Thank you, and good morning ladies and gentlemen, and welcome to the Star Bulk conference call. I'm Akis Tsirigakis, the Chief Executive Officer of Star Bulk. And with me today is George Syllantavos, our Chief Financial Officer.

Before we begin with our slide presentation, I kindly ask that you take a few moments to read our Safe Harbor statement on slide number two.

I would like now to take this time and use this introduction to make several brief points.

We continue to believe that we are one of the most undervalued companies in the dry bulk sector. Our company remains financially strong with modest leverage, ample liquidity and positive cash flows, and we maintain excellent relationships with our lenders.

We were able to declare our quarterly dividend of $0.05 per share for the fourth quarter 2009.

In 2009 we had undertaken a cost reduction effort, which has produced tangible results in both G&A and operating expenses.

Also in late 2009 we completed the process of taking in-house the technical management of our fleet. We expect in-house technical management to further reduce costs going forward, a trend evident in comparing operating expenses between third and fourth quarter 2009 already.

Here I would also like to underline the one-off nature of increased voyage expenses reported. This is due to having to charter in a vessel at the high rate to serve our COA, or contract of affreightment, a need that was created out of the timing of the sale of the Star Alpha that was serving the contract affreightment.

Let us now turn to slide number three, which provides an update of our company since our last conference call.

On Monday, as I'm sure many of you have learned, we announced the acquisition of a capesize vessel built in 2000 in Japan for a price of $42.5 million, which is to be paid by a combination of company cash and senior debt.

On Tuesday we also announced a dividend of $0.05 related to the fourth quarter of 2009. We are glad to be able to reward our shareholders with our quarterly dividend.

We also recently announced that we sold one of our oldest vessels, the capesize carrier, Star Beta, for a contracted sale price of $22 million. We look forward to concentrating on renewing and expanding our fleet.

Our general and administrative expenses were lower by 44% compared to the fourth quarter of 2008.

Our operating expenses decreased a further 9% compared to the third quarter of 2009, and we are confident that our in-house technical management will be instrumental in implementing our quality objectives while further optimizing our operating costs.

We have also repaid early our March principal debt repayment.

Now could you please turn to slide four for some selected financial data. In this slide we've selected some key points to illustrate that we continue to believe our company enjoys a very comfortable financial position.

Our market capitalization is currently $165 million as of market close on February 19, 2010.

We estimate the charter-free value of our fleet is currently $310 million.

Our senior debt currently stands at about $231 million.

And our current cash position is approximately $65 million.

Star Bulk also maintains a net debt to total assets ratio of 22%, which is considered low compared to most companies.

Going forward, the remaining principal repayment for 2010 is $43 million, for 2011 is $32 million, and roughly $25 million annually thereafter, while we have no other capital expenditure commitments such as new buildings.

These factors underline Star Bulk's solid financial position.

If you could please turn to slide five of our presentation to discuss our fourth-quarter and year-end 2009 financial highlights.

For the fourth quarter 2009, gross revenue was $31.2 million. The difference compared to the same period in 2008 was mainly due to the decreased amortization of fair value of below/above market acquired time charters and lower charter rates for most of our vessels.

We report a net loss of 46 point -- of $4.6 million, which includes noncash items such as a loss of $0.9 million, which relates to the reversal of unamortized fair value of an above-market acquired time charter on a vessel due to an earlier delivery date, and net revenue of $0.3 million, representing amortization of fair value of below/above market acquired time charters.

Excluding these items, net income for the fourth quarter 2009 would have amounted to a loss of $3.8 million, representing a loss of [zero point six] (sic - see financial release) dollars per share, basic and diluted, of which is $0.02, or $1.4 million, represents loss on derivative instruments.

Our first call consensus for the fourth quarter was a loss of $0.03 per share.

Adjusted EBITDA for the fourth quarter 2009 was $11 million, while the average daily operating expenses were $6,318 per vessel.

The time charter equivalent for the fourth quarter of 2009 was $23,012 per day.

For the year ended December 31, 2009, we achieved gross revenue of $142.4 million.

Net loss for the 12-month period amounted to $58.4 million.

Excluding noncash items, such as $75.2 million impairment loss in connection with the sale of the vessel Star Alpha, amortization of fair value below and above market acquired time charters, and the amortization of stock-based compensation, net income would have amounted to $13 million, representing $0.21 per share, basic and diluted, or $15.1 million, representing $0.25 per share, basic and diluted, if derivative instruments are excluded.

Adjusted EBITDA for noncash items was $80.4 million, while the average daily operating expenses were $6,888 per vessel.

The time charter equivalent rate for the 12-month period was $29,450 per day.

Our CFO, George Syllantavos, will of course discuss our financials in more detail later on in our presentation.

Now turning to slide six, this slide illustrates our fleet employment chart and counterparties, which is also available on our website. I won't go into further details, as I believe it is self-explanatory.

I would just like to reiterate that we agreed to sell the Star Beta in January 2010, which is expected to be delivered to its new owners in the second quarter of 2010, upon its redelivery from the current time charterer.

Also we assigned the Star Ypsilon to our contract of affreightment, or COA, with the Brazilian mining company Vale, which effectively provides full-time employment for a capesize vessel for two years. That contract gives us the option to serve it either by our own or by chartered-in vessels.

Moving to slide 11 -- seven, pardon me. This graph shows our contracted operating days as well as our revenue visibility. Our long-term coverage continues to provide us with stable and visible cash flows in this current volatile market. Daily volatility of the dry bulk index does not currently affect our revenue generation by very much. Our contracted coverage is now 92% for 2010 and 53% for 2011.

If you turn to slide eight, you will see graphically Star Bulk's high contract coverage, in fact one of the highest.

Please turn to the next slide, where Mr. Syllantavos, our CFO, will discuss our financials.

Good morning to everyone. Let us now move to slide 10 for an overview of our balance sheet as of December 31, 2009.

Our current assets were $60.8 million, while our fixed assets amounted to $668.7 million, and total assets amounted to $760.6 million.

Current liabilities were $71.1 million. Non-current liabilities amounted to $190.3 million, and stockholders' equity was at $499.3 million. Total liabilities and stockholders' equity totaled $760.6 million.

We can now turn to slide 11 to discuss the fourth-quarter 2009 income statement.

The fourth-quarter 2009 results include noncash items amounting to $0.8 million and adjusted figures exclude these noncash items.

For the fourth quarter ended December 31, 2009, total revenues amounted to $31.2 million, and our operating loss amounted to $2.8 million. The net loss for the fourth quarter '09 was $4.6 million, representing a $0.07 loss per share calculated on 61,049,760 weighted average number of shares, basic and diluted.

Excluding noncash items, net income for the fourth quarter of 2009 amounts to a loss of $3.8 million, or minus $0.06 per share, calculated on 61,049,760 weighted average number of shares, basic and diluted.

I want to add that tighter cost controls contributed to decreased G&A per vessel by a substantial margin compared to the same period of last year.

Please turn to slide 12 now to discuss our year-end December 31, 2009 numbers.

For the 12 months in 2009, total revenues amounted to $142.4 million, operating loss was $49.3 million, the net loss for the 12 months 2009 was $58.4 million, representing a loss of $0.96 per share calculated on 60,873,421 weighted average number of shares, basic and diluted.

Excluding noncash items impairment loss of $75.2 million in connection with the sale of the vessel Star Alpha, net income of $5.7 million, representing amortization of fair value below and above market acquired time charters, and expenses of $1.8 million relating to stock-based compensation, our net income for the 12 months 2009 was $13 million, representing $0.21 earnings per share calculated on 60,873,421 weighted average number of shares, basic and diluted.

In closing, I would like to iterate something that Akis mentioned in the beginning. During the quarter we had almost $8 million of voyage expenses out of a total of $[15] million for the whole year. This is mostly attributed to cost of chartering in a vessel to perform the fourth cargo shipment in the 2008 COA contract in order to allow the Star Alpha to meet its delivery dates to its new owners.

I would now like to pass the floor back to Akis for the continuation of the presentation.

Thank you. I would like to make some market related comments now, particularly on supply and demand for dry bulk shipping. So please if you would turn to slide 14 for a quick update on the supplier vessels and the new building deliveries.

According to recent statistics, only 60% of the new building orders with a scheduled delivery within 2009 were actually delivered. The remaining 40% were either delayed or canceled. A breakdown of these delays and cancellations by segment is shown in the top-right graph.

This phenomenon is expected to worsen, as leading broking houses like ICAP and Platou were recently quoted as saying in Lloyd's List, that they expect delays and/or cancellations to reach 50% in 2010, and this includes those vessels that were flow-over for 2009.

Port congestion has risen again, close to its historical highs, effectively reducing the dry bulk trading fleet by about 38 million deadweight tonnes, 11 comparable to the 42.6 million deadweight tonnes of total dry bulk deliveries in 2009.

What is worth pointing out is a recent unexpected with spot time charter rates lifting and vessel values rising. We believe that this is indicative of the market optimism for the future of dry bulk shipping.

Let us now turn to slide 15 for a look at iron ore demand.

As we had mentioned about three months ago on our third-quarter earnings call, world iron ore trade has recorded -- has reached record high levels again. On the top-right graph you can see that while Chinese iron ore imports have remained fairly flat, imports from the rest of the world have increased quite substantially.

Current spot iron ore price levels of around $120 per ton indicate that once again iron ore trading is constrained by supply and not that China's demand has stopped growing. On the contrary, as you can see on the two charts on the bottom of the slide, China's domestic production has been rising slightly while iron ore stockpiles have dropped below their recent highs.

In general global iron ore demand seems to be very healthy, and it is expected to continue to provide a substantial source of demand for dry bulk shipping.

In slide 16 I wish to comment on a recently [reversed] trend, substantial Chinese coal imports. On the top-right graph you can see China's monthly coal imports and their spectacular year on year growth, which reached 400% for the last quarter of 2009.

It is worth mentioning that coal imports for the whole year increased by more than 200% compared to 2008.

China has traditionally been a coal exporter in the Asian region but has now turned into a major importer due to both increased competitiveness from other coal exporting countries combined with China's growing demand for electricity and coal and its centralized effort to consolidate its coal mining sector.

As you can see in the bottom-right graph, imported coal is often cheaper than domestic coal. This indicates a price-sensitive behavior, which in turn implies large growth potential, as China's annual coal consumption is in the order of $3 billion.

This is illustrated in the bottom-left chart, where you can see Chinese apparent coking coal production versus net imports, which are only a small fraction of the total consumption. Thermal coal consumption versus imports would sketch a similar graph. The potential therefore is really substantial.

Turning slide 17, illustrates the reason behind the dry bulk market strength in a year when most countries were in a recession.

Both charts on this slide show the spectacular growth in Chinese dry bulk imports in 2009. Actually this number reached the unpredicted level of 60%. It exceeded most expectations.

That was -- making it more impressive is the fact that during 2009 most countries were significantly reducing dry bulk imports. Iron ore imports were 184 metric tons, or 41% higher in 2009, and China's dependence on imported iron ore is not likely to change, since Chinese iron ore is of very low quality, making imported iron ore more competitive in terms of quality and price.

As we explained in the previous slide, coal imports have enormous growth potential due to the huge coal consumption of around 3 billion tons.

However, what is most exciting about this potential is that in the event of an appreciation of the Chinese currency, imported iron ore, coal, and all dry bulk commodities will become even more competitive than they already are.

Please turn to slide 19 for a conclusion of our presentation. And I would like to reiterate that we believe Star Bulk to be one of the most financially sound companies in the dry bulk sector.

Further, I wish to point that --

We have taken steps to our fleet renewal by agreeing to acquire a capesize vessel.

We have reinstated our quarterly dividend program.

We have one of the lowest leverages of our peer group.

We are well-positioned in this economic climate with a healthy cash balance of about $65 million.

Our high contract coverage limits our exposure to the volatility we are seeing in the shipping market.

We don't have exposure to new buildings.

We will have a healthy balance sheet and a low debt to total asset ratio.

We will continue to have our shelf registration for up to $250 million in securities in place, although unused to present.

All those factors translate our company being financially healthy and well-positioned going forward.

I will not take any more of your time. Thank you. And I will now pass the floor over to the operator. If you have a questions, both myself and George will be happy to answer them.

(Operator Instructions). George Pickral, Stephens Inc.

Akis, let me ask the first question to you. So you've sold the Alpha and you've sold the Beta, but you've still got two more capes that are relatively old. How are you thinking about those vessels going forward? And then you also mentioned being well-capitalized and having the balance sheet to buy additional vessels. So how -- should we think about additional vessels replacing these? Or do you think you could replace and add to your capesize fleet over the next 12 to 24 months?

Understood, George. Hi. I would like to say that while we have agreed to sell also the Beta, we have only replaced the Alpha so far -- or agreed to replace the Alpha. We are not currently thinking of disposing the two vessels, the Ypsilon and the Star Sigma. However, yes, we are looking to replace the Beta and expand the fleet as well.

Okay. And then, Akis, you also briefly mentioned in your opening remarks the impact of voyage expenses from the COA. Can you tell me exactly how much that was in the quarter? And then a follow-up to that, will there be any negative impact in Q1?

Yes. That was to the tune of $6 million in the fourth quarter 2009.

So taking that out, we are at about $1.8 million of voyage expenses. Is that a good run rate to use going forward? And then also, is there going to be any impact to Q1?

There's going to be about $1 million impact on Q1 from that same exercise. And -- but the point is that, as I mentioned in my note, out of the total of $15 million, of $8 million for the year, the $8 million were part of -- just of Q4, and almost $6 million out of those $8 million are related to those -- to that vessel having to be chartered-in in order to meet the delivery dates of the Alpha. Therefore, the $2.0 million, $2.5 million level for [third] quarter on voyage expenses is a reasonable number, excluding the one-time -- this one-time item.

Okay, thank you George. And then one more quick question for you. On the vessel operating expenses, down about $0.5 million sequentially from Q3 to Q4. Should we expect a similar decline in Q1 when you have the full implementation of taking the management in-house? I guess the question is, how should we -- can you give any guidance or color on how we should think about the quarterly run rate for vessel operating expenses in 2010?

I would not like to provide a number. We are expecting that we will further reduce it because we are taking steps towards that thing. But I -- don't hold me down to a number, George.

Okay. Fair enough. Thanks for the time.

Natasha Boyden, Cantor Fitzgerald.

I think George covered most of the questions, but I was curious as to whether or not you have had any further counterparty issues with any of your charterers, particularly on the vessels like the Zeta, Omicron, or Cosmo or Gamma, which have some -- still have some very attractive charters attached to them.

Not at all. None whatsoever.

And any that you have had in the past, please update on those, on arbitration or anything?

We have, to tell you the truth, some positive developments. I am not really at liberty to discuss them, but we do have some positive developments on several of the claims.

As you understand, these procedures are confidential. Our apologies that we can't say anything more. We are just happy on how these cases are progressing, and I guess that's what we can say at this juncture.

Okay. No, I understand. Thank you. I appreciate that.

Just looking at your fleet and the charter strategy, it looks like you have the Theta coming up for renewal there. Just really wanted to see what kind of talks you are fielding, what kind of rates you might be looking at, any kind of insight would be helpful.

A renewal at this environment, one could be looking at the $17,000 range, $16,000 to $17,000 range.

For a -- but you're looking at about a two year plus (multiple speakers)

But Natasha, listen, this is at a relatively lower rate where the market is right now. And so it will be a -- chartering would be a substantial improvement. And --

I wanted to point out that this vessel, because it is -- it has a period, an optional period, it will likely not be redelivered the earliest time that the charterer party allows in May, it is more likely to run into July. That is one comment that I want to make.

Is that because the rate is relatively low on it, so the charterer is going to keep a hold of it?

That is the exact point. And then we have some time to actually charter her forward. It will depend if we choose to take a longer or a shorter period. It could be in the $20,000 per day, depending upon the period that we choose to charter. I would say $17,000 to $20,000.

So that either way we can pretty much look at hopefully a higher rate than it's already trading at?

That is a definite yes.

That's helpful. Then just lastly, this is just a line item question, but the derivative that you had, the $1.35 million loss you had there, what was that associated with? Was that an interest rate derivative? Or an FFA?

No, it's -- as you'll understand, at the end -- as we have already said, we use FFAs to cover for the open days of the foreign [cape] days that we have one year forward. That has always been the strategy. Now, at the end of the year we had not sold the Star Beta yet. Therefore the Star Beta had -- was looking at an opening of above a few months, nine months in 2010. Therefore we had 240 cape days; right? -- at an average rate of about $27,750.

Now, as you understand, if you look at how the FFA is traded at the last five, six days of the year, the rate ended at about $[53,000] at the end of the year, therefore for those five last -- five, six last days of the year, we recorded the mark to market loss of 240 days times about $5,000, which comes to about $1.2 million, $1.3 million.

Post January 6 or 7, if you look at the charts, the rates started coming down again in the FFAs, so we started gaining back that value. But fortunately or not, as you see, we have to make a cut-off at December 31, so at the December 31 cut-off, this is the type of mark to market type of situation we are looking at for those days.

Now, since we entered into January and we made an agreement to sell the Beta, we don't have as many days, so in the meantime we've traded out, improving our positions here, we've traded out of half of days, and now we only have 120 cape days in 2010.

I am making this long explanation so everybody can understand how we use that instrument for hedging and how this specific cut-off in the financials at the end of every quarter makes us take a value on that specific snapshot of the value at that specific juncture.

And this was a cash off; is that correct?

No, it's a noncash item (multiple speakers)

Oh, noncash.

Because it's a mark to market thing. So that $1.3 million is just the value of the derivative at the end of the year. As I said, since then we have been improving that because the rates have moved in the right direction, and we've traded out half of that position. So (multiple speakers) it's a continuous -- but it's a noncash item.

It's a noncash item. Okay. All right. Well, that's very helpful, thank you very much.

Bob MacKenzie, FBR Capital Markets.

Actually I wanted to follow up on Natasha's question a bit. So since you've sold out of half of the effective FFA days this quarter, what kind of gain I guess in terms of cash and the cash gain potentially we will be looking at in 1Q at this point?

No, I -- listen, we have -- we'll take again the snapshot at of March 31 and will -- the position will be improved. I understand there is much interest in this being in this quarter. There wasn't so much interest in the previous quarter where we gained $3 million. But this is something we do to hedge our forward cape position, and I think we do it very well, and it just so happened that at the end of the quarter we had this valuation decrease. But it's -- it will get improved, but I wouldn't like to give a guidance right now, since the rest of the positions are -- will still be -- are still trading and will still be trading till the end of the quarter.

Sure. I guess my question, I should have phrased it better, is you've sold out of half of the position. What would the cost basis be in the remainder of the position?

If nothing changed, obviously it would be half. (multiple speakers) But of course, since the market is moving, we cannot predict how it will go. It is -- they may move in our favor, or the opposite. And that's the -- that snapshot will be taken on March 31, of course. But the exposure is much less, and in fact, if it were the same like last quarter, it would be -- the effect will be half of it.

Okay. Thank you. That's great. On the Aurora, how are you-all thinking about contracting that when it's delivered?

We will probably try to contract her before she is delivered, contract her forward. There is an interesting period charter presently, so we will be moving in that direction soon.

Strategically, are you guys -- are you bearish enough on the dry bulk market that you would look to term it out for a multi-year period? Or based on your comments earlier, it seems like you are in the bullish camp and might want to keep it short term. How are you thinking on the duration and what -- how you might contract that?

It will be a time charter, but a shorter one. It will not be like -- we will not keep her in the spot, it will be on time charter, but maximum three years I would say, or less, rather than the longer time charter.

Okay. Great. Now, how -- also, in terms of replacing the Beta and growing the fleet, how would you characterize what you are seeing today in the S&P market? Obviously you've got others like Diana out there looking to buy assets. Can you give us an update on how you see the -- or what you view as the changes in the S&P market over the past month or so?

I'll be glad to. There is a lack of secondhand tonnage to be bought. There is a definite lack. People are not selling their second half -- secondhand tonnage, especially in capesize. It is also the case with supramax. That can be viewed that an IPO ambition was pulled back due to difficulties in locating sufficient number of tonnages. You might have heard that in the market.

The point is that we might see new vessels changing hands, meaning new buildings or resales. This we see and we see quite a few opportunities in that front. On used vessels there is a very big drought of secondhand tonnage.

With that being the case, would it not make sense to perhaps look at perhaps exploring a sale of the Ypsilon and perhaps even shifting the COA onto the Aurora later on this year?

It depends on what we can do better. It's always a tit-for-tat type of exercise; right? So if we are -- if our view takes us and our comparison takes us to the -- to see what -- which vessel is better to serve which contract and what opportunities for long-term employment exist for one type of delivery, or earlier for the Ypsilon, or later for the Aurora, then we will make that determination at that time.

Of course you will appreciate that the Sigma has -- is under a long period charter, and we are happy with the performance, technical and otherwise, of the vessel. Same thing with Star Ypsilon, despite the age, are in a very, very good shape vessels. They can -- as long as they earn -- their earning potential does not really get restricted any, substantially, then there is no problem on the cost side, and they are very good performers. So that has to be taken into consideration, of course, in making the replacement decision, and of course what you can replace them with, as I just mentioned. (multiple speakers)

I'd say both these vessels, albeit they're aged, have attained the highest vetting markings out there for dry bulk vessels, so they are extremely good operators. (multiple speakers)

Great. Thanks. And my final question relates to the dividend, George. How are you guys thinking about potentially raising the dividend in future quarters?

Well, at this point I wouldn't like to say that we are thinking of raising or not raising or whatever. We have a view of what the dividend is. We believe it -- in the current levels it provides an attractive 7% yield, and we also, as you see, we made a move in acquiring tonnage, so we might be wanting to use some cash for replacing vessels Akis mentioned or expanding a little.

So all these thoughts have to go in, and the Board will make a determination as we move forward here.

Thank you very much.

(Operator Instructions). [Fortis] (inaudible), Morgan Stanley.

I would like -- can you give us please some guidance regarding the debt repayments in relation to the vessels that they would be sold? Or they have been sold?

Well, the debt repayments, there were no debt repayments for the Alpha at all. So all that cash came into the company. And our target would be not to make any debt repayments for the sale of the Beta either. And that really shows the great financial conditions that we find ourselves in.

And also in relation to the same question, what is going to be the use of proceeds of this -- from the sale? Are you planning to buy any other vessel? Is there anything in -- on the horizon?

Oh yes. From the Star Alpha we have already announced a purchase. We are looking at something similar, another purchase let's say possibly for the Star Beta. Yes, this is the type of proceeds we are looking at -- use of proceeds. But we want to keep all our options open. There are more options as well.

Listen, our general -- to clear things for you when you make your cancellations, our general guidance is that equity and debt we apply in a kind of 60/40 type of level. Therefore as you understand, $20 million for the -- from Alpha and $22 million from the Beta allows us to have $42 million for those acquisitions. So as you understand, in a 40/60 split, that would mean that we'll -- excluding our existing cash, these sales can allow us to buy vessels of $105 million, $110 million (multiple speakers) [without] needing to go back to our cash or raise extra equity or do anything like that and dilute people. So it's a very complete -- comfortable type of situation to be in.

Okay, thank you.

(Operator Instructions). (inaudible), Fitch Ratings.

One quick question, a follow-up to some of the points raised earlier. When it comes to your vessel acquisition strategy, how do you feel the market is in terms of acquiring a vessel at a good price when they do not have a charter attached, versus those that do have?

Well, a starting point is without a charter attached. That is a benchmark that is usually published on a -- historically. The numbers are for charter-free vessels that exist in the databases.

Now, if a vessel has a charter attached that is for the period that we are let's say considering -- let's say it is three years, it is a above the market level. That premium of the charter hire is to a certain degree that sometimes reaches 100% added to the charter-free price of the vessel. So that is sometimes why you see different prices being reported if a charter is attached.

Alternatively, if the charter attached is below the current market level, the value of the vessel may suffer a little bit because of it. But normally, it is added, and sometimes even up to 100%.

Okay. And then just one follow-up. With the vessel that you announced that you were going to be acquiring later this year, (multiple speakers) [just] given that it's a 10-year-old vessel, is it subject to any special surveys once delivered? Or has it gone through anything recently that gives you confidence that it can be deployed reliably over the first couple of years of service?

That is a good question. And the vessel will be delivered to us with a special survey and dry docking passed already, and she is going to pass that now in June/July. The sellers will pass the special survey, so we will not have to make that expenditure.

So do you think you'll wait until after that process is done before you are able to seek out charters?

(multiple speakers) No. As I mentioned a little earlier, we are going to be seeking charter very shortly. In fact, we do not expect that we will have any difficulty finding forward charter as of the commencing as of the fourth quarter of 2010, when the vessel is expected to be delivered to us.

Great, thank you very much.

There are no further questions.

Okay. Thank you very much, ladies and gentlemen. And we appreciate your attendance of our conference call. We look forward to speaking with you again when we discuss our first-quarter 2010 financial results in about three months time. Thank you again and goodbye.

That does conclude our conference for today. Thank you for participating. You may all disconnect.