Seanergy Maritime Holdings Corp (SHIP) 2011 Q3 法說會逐字稿

Thank you for standing by, ladies and gentlemen, and welcome to the Seanergy Maritime conference call on the third quarter and nine months 2011 financial results. We have with us Mr. Dale Ploughman, Chairman, Chief Executive Officer and Director; and Ms. Christina Anagnostara, Chief Financial Officer and Director 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 (Operator Instructions). I must advise you that this conference is being recorded today, Wednesday, January 11, 2012.

Please be reminded that the Company publicly released its financial results today before the market opened in New York where it's available to download along with today's presentation on the Seanergy website, which is www.seanergymaritime.com. If you do not have a copy of the press release or presentation, you may contact Capital Link at 212-661-7566 and they will be happy to fax or e-mail a copy to you. This conference is also being webcast and is user controlled. To access the webcast, please refer to your earnings press release for the web address which will direct you to the registration page.

Before turning the floor over to Mr. Ploughman, I would like to draw your attention to slide number 2 of the presentation, with the forward-looking statements. Matters discussed in this presentation may constitute forward-looking statements. Forward-looking statements reflect the Company's current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements which are other than statements of historical fact. Please take a moment to read the forward-looking statement.

And now I will pass the floor to Mr. Ploughman. Please go ahead, Sir.

Thank you operator, and good morning everyone and thank you for taking the time to join us for this conference call.

Please turn to slide 4 for an overview of the recent financial developments. We are very pleased that Marfin Bank and Citigroup have agreed in principle to provide waivers on financial and other covenants on three loan facilities, and amend certain terms on two loan facilities. Specifically, Marfin has agreed in principle to extend the maturity dates of the revolving and term facilities until 2018 from 2015 currently. The debt installments falling June 2012 have been deferred. The waiver on the security margin covenant has been extended until January 2014 from January 2012. Our waivers have also been provided on all financial covenants until January 2014. There has been a repricing of the loan interest margin to accommodate the aforementioned amendments.

As far as Citigroup's syndicated loan is concerned, the lenders have agreed in principle to provide waivers on all covenants up to January 1, 2013, with the exception of security -- value to security requirement covenant that has been amended to 100% from 125% previously and is to be tested on a quarterly basis. Furthermore, the loans margin will be repriced.

As agreed with our lenders, we have entered into a share purchase agreement with the four entities of the affiliated -- affiliated with the members of the Restis family for an equity injection of $10 million. It should be noted that our lenders have also agreed in principle to provide waivers for all previous government breaches.

We are pleased to see the aforementioned developments taking place as they demonstrate the commitment of our lenders and major shareholders to the Company's long-term prospects. Furthermore, the amended repayment schedules are important in securing financial stability and during a period of unfavorable market conditions.

Please turn to slide 5. Here, we have highlights of third quarter 2011. Our CFO, Christina Anagnostara, will soon go over the financial results for the third quarter and the nine months 2011 in more detail. For the three months ended September 30, 2011, we reported net revenues of $23.5 million and EBITDA adjusted for impaired losses of $11.8 million. We also reported an adjusted net loss which excludes the non-cash payment -- cash impairment losses of $201.9 million of $1.6 million.

Highlighting on our recent developments, given that we are experiencing a period of low charter rates since the beginning of 2011, we have performed a review of the recoverability of Seanergy's asset values. As a result, the book value for Seanergy's initial six vessels acquired in 2008 and the book value of that goodwill were impaired. In this respect, a non-cash loss of $201.9 million was recorded in the third quarter 2011. We believe that our decision to adjust the book value of our six vessels will positively affect our balance sheet and profitability going forward. I would like to add that it was concluded that the values of the vessels acquired under the BET and the MCS acquisitions were not impaired.

In regards to our recent fleet development, in November 2011 the motor vessel BET Prince, a 163,000 deadweight dry bulk carrier built in 1995, commenced a time charter for a period of about 11 to about 13 months at a gross charter rate linked to the adjusted time charter average of the Baltic Capesize Index. In addition, on September 16, 2011, the motor vessel BET Intruder, a 69,000-ton deadweight Panamax dry bulk carrier built in 1993, commenced its time chartered with Swiss Marine for a period of about 11 to about 13 months at a gross charter rate of $12,250 per day.

Before we proceed to the next slide, I want to add that we remain committed to our goal of strengthening our position in the global shipping industry by building synergy into a leading player with prudent and well-timed acquisitions. Today, Seanergy is well-positioned to cope with the challenging market conditions with a high quality fleet, strong management, efficient technical and commercial operations, a balanced and diversified charter portfolio and a sound balance sheet. We feel confident that we can continue to work towards our goal of making Seanergy a leading drybulk ship owner able to capitalize on the robust long-term demand for the transportation of essential commodities.

Moving to slide 6 for an overview of fleet and time charter coverage, our fleet overview is available on our website. I won't go into detail here as it is self-explanatory.

Turning to slide 7, where you can take a closer look at the characteristics of our chartering strategy by type of vessel. As of the end of 2011, Seanergy secured employment of 98% of its total ownership days for 2011, 72% for 2012 and 24% for 2013. The high level of time charter coverage provides our Company with cash flow stability, allowing us to cover our debt repayment needs and capital commitments. At the same time, there is upside potential as 12 of our charter contracts are subject to a profit-sharing agreement, or floating-rate contracts. It is noteworthy that three out of four Capesize vessels were operating under floating-rate agreements allowing them to take advantage of the strength in the Capesize spot rates since the end of the third quarter 2011. At the same time, two out of our three Panamax vessels in our fleet are earning rates that are favorably compared to the current market levels.

Turning to slide 8, you can find the percentage of our revenue attributable to each charterer over the past quarter. I would like to stress the fact that all of our vessels are fixed with what we believe to be highly reputable charterers. Our ability to continuously keep our vessels employed with creditworthy counterparties in an internationally competitive environment such as drybulk shipping also demonstrates the high standards of commercial and technical management of our fleet. We expect that our diversified fleet and the ability to carry all types of drybulk cargo will continue to attract first-class charterers. Furthermore, maintaining a diverse range of end users minimizes Seanergy's credit risk exposure to a single charterer.

And now, our CFO, Christina Anagnostara, will go over the third quarter 2011 financial results.

Thank you, Dale, and good morning to everyone. Please turn to slide 10, which presents Seanergy's financial highlights for the third quarter and nine months of 2011.

For the third quarter, net revenues were $23.5 million, as compared to $29 million in the third quarter of 2010. The decrease in revenues reflects lower level of freight rates and our (inaudible) [date] remains constant year on year. Excluding the non-cash impairment charges, adjusted EBITDA was $11.8 million as compared to $15.7 million in the same quarter of 2010. This fall was mainly a result of reduced revenue. Inclusive of non-cash losses of impairment charges, EBITDA was equal to negative $190.1 million for the third quarter.

Adjusted net loss from the third quarter excluding the effect of impairment charges was $1.6 million as compared to net profit of $2.9 million. Including the non-cash impairment charges of $201.9 million, net loss was $203.5 million in the quarter, or $27.82 loss per basic and diluted share. Excluding the effects of the impairment, the loss is primarily the result of an 18% decrease in net revenues.

For the first nine months of 2011, net revenues were $76.5 million, up 10% from last year's $69.9 million. Adjusted EBITDA was equal to $38.2 million as opposed to $36.5 million in the same period of 2010. EBITDA, including the impairment charges was equal to a loss of $163.7 million compared to $36.5 million last year. Excluding the effect of the impairment charges, adjusted net loss for the nine-month period was $2.5 million as compared to net income of $2.8 million in the same period of 2010. Losses resulted mainly due to lower time charter equivalent rates and by our vessels. Including the impairment charges, net loss was equal to $204.4 million, or $27.94 loss per share.

Please turn to slide 11 to discuss Seanergy's third quarter and nine-month 2011 operational highlights. For the third quarter, we owned and operated 20 vessels, achieving fleet utilization of 94.9%. This compares to an average of 20 vessels and a fleet utilization of 95.2% using the same period a year ago. Fleet utilization, excluding drydocking off-hire days, was 97.9% for the third quarter and 99.4% in the same period last year. In the third quarter, total vessel operating days decreased from 1751 days in the third quarter of 2010 to 1746 days, mainly due to the timing of drydocking surveys.

For the first nine months we owned and operated 20 vessels, achieving fleet utilization of 94.6%. This compares to an average of 15.4 vessels and a fleet utilization of 95.2% during the same period a year ago. Fleet utilization, excluding drydocking off-hire days, was 97.5% in 2011 and 99.5% for the same period last year. In the first nine months, total vessel operating days increased by 29% from 3998 days to 5165 days.

Turning to our average daily results for the third quarter, our time charter equivalent rate was $13,324 as compared to time charter equivalent rate of $16,153 during the same period a year ago. For the first nine months, time charter equivalent rate was equal to $14,427 as compared to $17,039 in the same period in 2010. The decreasing time charter equivalent rate resulted from the deterioration in market rates seen over 2011.

For the third quarter, our time charter equivalent rate was calculated as a weighted average of $15,327 daily rate under time charter contracts, and $5825 daily rate and on vessels under [bare boat] agreements. The time charter equivalent rate for the vessels operating under bare boat employment before deduction of OpEx allowance was $10,106.

Our daily vessel operating expenses increased by $598 over the third quarter of 2011 to $5006 per vessel per day, from $4408 per vessel per day, the same quarter a year ago. The increase mainly resulted from increasing repair and maintenance expenses associated with an unanticipated repair work on the Hamburg Max. In the nine-month period of 2011, daily vessel operating expenses decreased to $4781 from $4810.

For the third quarter of 2011, our total vessel operating expenses inclusive of monitoring fees were $5449 as compared to $4782 per vessel per day in the third quarter of 2010. For the nine-month period of 2011, total daily vessel operating expenses stood at $5219 from $5267 in the same period of 2010.

Our daily general and administration expenses decreased by 29% or $340 per day over the third quarter of 2011 to $841 per vessel per day as compared to $1181 per vessel per day the same quarter a year ago due to the one-time expenses relating to the organization of our (inaudible). Commencing October 1, 2011, we have achieved a reduction from EUR460 to $450 on daily management fees charged by [SDR]-affiliated party for 11 vessels. The reduction will result in annual savings of approximately $700,000 or $171 per vessel per day, equivalent to 37% decrease per vessel per day assuming an exchange rate of $1.35 per euro.

Please turn to slide 12 to discuss Seanergy's balance sheet. Our cash reserves inclusive of restricted cash was $42.3 million and our total outstanding debt was $363.6 million. Our shareholder's equity has decreased from $274.7 million to $70.3 million due to the impairment charge recorded on six vessels in goodwill.

Please turn now to slide 13 to discuss our income statement. For the third quarter, net revenues were $23.5 million and vessel operating expenses was $9.2 million. Depreciation and amortization was $10.3 million, operating loss was $200.5 million and net loss was $203.5 million. Interest and finance costs amounted to $3.1 million and the weighted average interest rate including the spread for the third quarter was 3.2%.

Losses on interest rate swaps amounted to $12,000. When adjusted for non-cash impairment losses, operating income was equal to $1.4 million and net loss was equal to $1.6 million. For the first nine months of 2011, net revenues were $76.5 million, and vessel operating expenses were $26.1 million. Depreciation and amortization was $30.5 million, operating loss was $193.4 million and net loss was $204.4 million. Interest and finance costs amounted to $10.2 million and the weighted average interest rate including the stress for the first nine months was 3.2%. Losses on interest rate swaps amounted to $760,000. Adjusted for non-cash impairment losses, operating income was equal to $8.5 million and net loss was equal to $2.5 million.

Given the sustainable and favorable market conditions weakness year-to-date, the Company decided to proceed with the impairment testing on the carrying amount of the vessel prior to year-end as a preliminary exercise. Indication of impairment existed for the six vessels acquired in 2008 as of September 2011 and the impairment loss was measured as the amount by which the carrying amount of the assets exceeded their fair value. Fair value was determined using the average valuation of two independent brokers.

Please turn now to slide 14 for an overview of our debt and swaps profile. During the third quarter of 2011, we repaid $9.7 million of debt, while for the nine-month September 20 principal payments amounted to approximately $35.9 million. At the end of September, our debt was comprised of six facilities totaling $363.6 million. Our net debt to book cap ratio after taking the book value impairment into account was equal to 82% and our debt to book cap was 84%.

Today, our total outstanding debt is approximately $346 million following debt repayments of $17.6 million. Today, our cash stands at our cash stands at $38.6 million.

The HSBC term facility matures in 2013 where the Citibank facility matures in 2015 and DVB and UOB facilities mature in 2016. Marfin facilities following the agreed in principle amendment will mature in 2018 instead of 2015. Also, an agreement in principle was reached to waive all past covenant breaches on both the Citi and Marfin loans. As part of the lenders' agreement, four entities affiliated with our major shareholders agreed to purchase 4,641,320 shares in exchange of $10 million. The shares are expected to be issued by January 31, 2012 at a price of $2.15442 being the average closing price of five trading days preceding the execution of the share practice agreement.

Please turn to slide 15 to discuss our drydocking schedule and associated costs. Seanergy incurred 56 off-hire days in the third quarter of 2011 as the BET Commander and African Glory under one scheduled drydocking survey. For the nine months ending September, there were approximately 160 off-hire days due to vessel drydocking as a total of five vessels were drydocked for inspections. The survey for African Glory commenced on August 19 and completed on September 4 while the survey for the BET Commander commenced on August 24 and was completed on October 6. The total drydocking cost for the third quarter was approximately $1.5 million, while for the nine-month period it amounted to $3.8 million. No drydocking surveys took place during the fourth quarter of 2011. Regarding the six vessels scheduled for drydocking 2012, cost is estimated to be approximately $6.8 million.

That concludes my remarks. I will now pass the call over to our CEO, Mr. Dale Ploughman.

Thank you, Christina, and now I will discuss our drybulk industry overview. Please turn to slide 17.

Over the past months there have been no marked change in the global macroeconomic conditions as economic growth in most OECD countries continues to be lackluster. We are seeing some signs of recovery in the latest data coming out of the United States. Yet, it is true that over the past two years there have been many times when similar numbers have failed to mark a sustained change in the direction of global economy.

In any case, the recent data did not confirm prior fears of the world slipping into an outright recession, and it seems that as if the resolution of the European debt crisis is going to be the main catalyst for the global economic recovery. An encouraging point is that China does not look like it's going to pursue its policy of monetary tightening with the same fervor as before, thus leaving more room for trade and industrial production to grow over the next year.

Against this backdrop, the growth in demand for drybulk transportation continues to be resilient. The recent fall in the international iron ore prices prompted increased Chinese buying that has offered considerable support for the daily rates paid on vessels. It is true that we are seeing buying interest wane in the run-up to Chinese new year, yet it is encouraging to see that the Chinese steel mills were still keen to import high-quality iron ore from Australia and Brazil as long as the price is right, rather than relying on domestic mines.

In terms of global steel production, we are seeing an increase of around 8% compared to last year which has been a positive factor in the terms of the drybulk transportation demand. A future pickup in the European and Japanese steel production is likely to be an important -- in maintaining the trend to increase global production. On the other hand, it is likely that the increasing downward pressure on Chinese steel makers' profit margins due to high prices of raw materials as well as the risk of deterioration in the global economic conditions mentioned before are likely to lead to reduced importing activity as the steel mills are likely to delay buying iron ore and coking coal, which was also seen by the fall in the steel mill capacity utilization from the summer of 2011 onwards. In the long run, however, rising per capita consumption of steel in China as the rate of urbanization remains high is likely to lead to increased production volumes that are going to fuel demand for iron ore and coal imports. Furthermore, large mining projects coming online from 2013 in areas such as Pilbara region of Australia and Mozambique amongst others, are likely to increase the volume of world trade in steel making of raw materials. It is indicative that producers such as Rio Tinto, Fortescue and Valley are targeting iron ore production increases of more than 100 million tons per annum until 2015.

Another important trend in the steel market is that China is attempting to secure an increasing volume of steel making raw materials in order to break its dependence on Brazil and Australia miners, who currently supply the vast majority of iron ore to China. Chinese investments and African projects is likely to change trading dynamics as more coal and iron ore are likely to be sourced from these regions, thus affecting the time mile demand.

Moving on to slide 18 -- shows information about global trading coal. As far as coking coal in 2011 is concerned, floods in Australia forced many market participants to source expensive coal from the US, which is reducing the amount of coal traded but has resulted in increased ton mile demand. In China, reduced margins in steel production has caused steel producers to source coal domestically to the extent possible. Feed transportation of coking coal in 2012 is generally expected to remain at a relatively steady level as there haven't been any major changes taking place in the supply side and high-quality coal is still in strong demand by most steel producers. Although 2010's increased volume of trade in thermal coal has carried on into 2011, the rate of growth has fallen as Chinese coal output has risen by 14% year on year. For 2012. the main drivers for thermal coal demand are likely to be found in the Asian continent, with the increasing demand also coming from the European Union, especially as Germany starts phasing out nuclear energy. In the long run, we expect thermal coal to play an important role in the Asian power generation as more coal-fired power plants are coming online in India and China. Due to its abundance and relatively low price, long-run coal demand for coal generated electricity in Europe and the US is likely to be less pronounced over their stricter environmental regulations, and the price of natural gas has remained relatively low.

All in all, the rising demand for thermal coal has so far been supported with shipping rates and is likely continue to be so in the future. This is going to be particularly evident in India where importing coal is going to be essential in the coming years with domestic -- as domestic supply has so far proved relatively adequate in covering the country's needs.

As far as the global trade in agricultural commodities is concerned, total volume remains at about the same levels as 2010. In the long run, however, the global trade in agricultural commodities have the capacity to raise demand for drybulk vessels significantly. As the world population grows and leads to increased demand for food, there is an increased demand for fertilizer as the productivity of the land has to rise in order to meet the future food demand. This will lead to increased seaborne trading associated materials.

Turning to slide 19 to view developments on the supply side as the industry -- the oversupply of vessels has been the main factor keeping the shipping market depressed in the face of a relatively healthy demand. In 2011, the size of the fleet in terms of tonnage grew by circa 14% while it is expected that in 2012 it will raise by circa 8% to 12%. It is therefore evident that demand increasing at a pace of 5% to 7% or so is not going to be enough to cause freight rates to firm. As a result, we expect the rate environment will rain soft until 2013/14 when deliveries of new vessels are expected to slow down substantially.

On a positive note, we have seen that the very robust demolition activity as prices of scrap metal have been high for most of the year lately has been a drop-off in the demolition sales due to the fall in scrap metal prices and [registry] issues in Bangladesh preventing the proper function of scrap yards. In 2012, these factors are likely to support uncertainty in the outlook of the demolition activity. Yet, we believe that scrapping volume should pick up again during periods of low charter rates. What is more, new building ordering activity has remained subdued compared to earlier years, as financing is becoming increasingly more difficult to source and ship owners have concentrated more on container vessels and other types of ships. This would suggest that we should see a gradual stabilizing of demand in supply dynamics going forward.

Turning to slide 20, this shows information on the timing of the expected deliveries as well as on different outstanding orders for different vessel classes. It is evident that future deliveries of Panamax and Capesize vessels are going to be higher as a percentage of the current fleet than sub-Panamax vessels. The supply of Handysize vessels seems to be relatively balanced, 21% of the current fleet on order in terms of deadweight while more than 40% of the existing fleet is older than 20 years.

Two points generating uncertainty about the evolution of supply have to do with the future pace of scrapping activity and the amount of slippage that we're going to see going forward. In 2011, scrapping took the equivalent of 22 million deadweight tons off the market compared to a total deliveries of 96 million deadweight or so. This suggests that demolition of older vessels really does have the potential to moderate the effect on new deliveries.

As far as the rate slippage is concerned, it is anticipated to have reached circa 30% of projected deliveries in 2011. The uncertainty surrounding slippages has to do with the fact that it's difficult to distinguish between permanently cancelled orders and postponed orders. Trying to predict the amount of permanently canceled orders is certainly going to be much harder to do, yet as long as rates remain low and there is difficulty in obtaining finance, we would expect the increasing number of vessels never to leave the yard.

Thank you for listening, and now I'll pass the call over to the operator, and if you have any questions we'll be happy to answer them. Please go ahead, operator.

(Operator Instructions). Thomas Pfister, RedChip.

Congratulations on getting the waivers on your loan facilities. I had a couple of quick questions about that. Are there any interest rate changes related to those loans?

Yes, it's going to be a [multi] (inaudible) pricing, and the CP alone 300 basis points. And an additional 50 basis points for each of the Marfin facilities.

Great, thank you. And for the debt repayments, are those -- all the debt repayments in 2012; are those going to be deferred?

Yes.

Okay, and --

The Citi facility, not for all the facilities, for the Marfin facility.

Right, for the Marfin. And so my calculation here is correct, I think I estimated that would be $24.8 million in principal payments for 2012?

Yes, correct, correct.

Great, thank you. And, also, I'm just wondering are you guys planning on doing any additional either equity injection plans or secondary offerings here in the near future?

Obviously, we are going to look and see whether it is conducive to do so in the market, but at the moment just after the new year, really the signs have been quite negative. But later on as we get into the spring, maybe the spring joy will come in and people may be a little bit more positive and we'll take a look then.

All right, great, thanks, that's helpful. Just to switch gears a little bit here, you guys have had some success in the past with positioning some of your ships in the spot market and getting above-market rates. So I think you have about three ships on spot right now, if I'm correct on that. What kind of rates are you -- can you give us some color on what kind of rates maybe you're getting on those ships, or where you're looking to position those ships in the market?

Yes, at the moment, we have two actually at spot, but -- and we've got one actually coming off very shortly in the Far East. We'll try to bring her over into the Atlantic by taking a position in cargo. Hopefully by then, we are into -- well into the second half of February, so we should get a reasonable -- a better rate than we are actually seeing at the moment because rates in the Far East are very depressed at the moment.

Great, thanks. That's helpful. And just one final question from me here on -- really related to the supply side. It seems like a lot of new vessel deliveries here in the early part of the year have depressed rates to start things off. Some people in the market seem to think that maybe that could moderate sometime around the middle of this year. What are you guys seeing there?

I think, obviously, there's going to be -- the overflow from 2011 is going to come into the first quarter as people wanting to get the 2012 stamp on their certificates. Therefore, we will see a natural decline as we get closer to mid year, and then the normal flow happening again. So there is in the first half of the year a normal flow because of the fact that people postponed the fourth quarter deliveries as much as they could so they would get the extra year on their certificate, therefore having a ship that's one year younger rather than a ship which is a year old by taking delivery in the fourth quarter.

Thanks, that's all the questions I have for today, and thank you for taking the time to answer them; I appreciate it.

[Clark Meyers], Evan Asset Management.

Good morning. What are the implications of the impairment charge, and what impact will this decisions have on the Company?

As you know, in accordance to US generally accepted accounting standards, the Company must (inaudible) take an impairment facing on an annual basis. And this is done -- margin is reduced (inaudible) indications of potential impairments such as the vessel sales and practices, business plan, overall market conditions. Although we have seen that the rates have been -- retreated from the 2008 levels which were marked by historically high daily rates, and vessel values, for the time being my expectations are low. And during this year we have experienced also a low rate environment.

So actually we decided to undertake this impairment testing as of a preliminary exercise in September. And we have seen that there was an indication of impairment for the six initial vessels that we have acquired in 2008.

What does it mean now? We had to undertake this impairment charge, meaning that these vessels have been recorded in our books at $291 million, whereas their fair values were approximately $100 million. So we had to take this impairment charge. Of course this is a non-cash item, however it is recorded against the shareholders book value.

But going forward, what is very positive here is the impact on the P&L. As it reduces our depreciation approximately $10 million on an annual basis. So another very important issue here is that actually it reflects on the balance sheet actually asset market values, and that makes easier the valuation of the Company for potential investors.

Another quick question regarding the recent lenders agreements with Citi and with Marfin. Can you tell us how well this impacts cash flows?

Yes. As we said in the previous question that we have answered, this will have a savings of approximately $25 million on annual basis, in cash flows for the next few years. And also, by -- with the granting of the waivers, we also -- this provides flexibility to the Company to pursue its plans and business strategy.

Okay, thank you.

[Kevin Shabar], [Shabar] Financial.

My questions have already been answered. Thank you.

Sam Rebotsky, SER Asset Management.

Good morning, Dale and Christina. Congratulations on getting this, the changes. Now with the reduction in depreciation of $10 million, that would produce $2.5 million per quarter lower cost. So it would appear that this quarter based on those numbers you would have been profitable.

Yes.

Okay. If the prices of ships decide to turn around and go up in value, are you locked in at this level based on accounting treatments?

For the particular vessels, yes, but since these vessels have been in the same range of assets since 2008, we don't expect to see the foreseeable future any increases in the vessel values of these particular vessels. We're talking only about the initial six vessels of 2008 because it was no indication for impairment to the remaining fleet.

Okay, and as far as any kind of potential rights offering, is that -- what are your thoughts on that, so that -- where you have added a substantial -- it's been more than a 50% increase in the number of shares outstanding. Is there any thoughts about making that offer available to the presence shareholders, etc.?

We are actually evaluating it because we do need to actually increase our free flows, and obviously this is something that we're very much aware of. And we want to do that at the right time. What we don't want to do is to cause a run on the stock. At the moment, it's quite precarious where we are at the moment where the stock is fluctuating between $2.75 and sort of $2.30, and we need to try and get back up to a level of $2.75, otherwise we're going to have some problems possibly later. So we have to be very, very careful in what we are doing.

Okay. I guess the rest of my questions have been answered, and I guess hopefully the economy will improve so the earnings will improve and everybody will be happier. Good luck.

Thank you.

(Operator Instructions). Tony Polak, Maxim.

You had -- good morning. You had said that the interest rate, what they were on the renegotiated loans. I'm just not sure, is that a lower rate or a higher rate than you actually paid?

Higher rate (multiple speakers)

How much higher is that, and then what amount of dollar number is that?

For the Citi facility, it's going to be 300 basis points. And for that Marfin facility, it's going to be 400 for the term loan and 450 for the revolver.

So could you tell us on what dollar volume that is, and how much more that is than the rate was before?

You can say that we will have an impact of approximately $1.5 million and $2 million.

Per year, or per quarter?

Increase -- yes, per year.

Per year. Okay, thank you.

(Operator Instructions). There are no further questions at this point. Please continue.

Thank you very much for taking the time to join us today. If you have any other questions after the call has concluded, you can contract either Christina, myself directly, or Nick Bornozis at Capital Link. But we also look forward to speaking to you in February when we'll issue our fourth-quarter results. Thank you very much.

Thank you very much sir, and with many thanks to both our speakers today, that does conclude our conference. Thank you for participating, and you may now disconnect. Thank you, Mr. Plowman, Ms. Anagnostara.

Thank you.

Thank you, all the very best to you. Bye-bye, sir; bye-bye, ma'am.