Top axes 4 bareboat charters

TOP SHIPS has terminated its four remaining bareboat charters and will pay a termination fee of $11.75M.

After market close yesterday, the NASDAQ-listed tanker and bulker operator confirmed charter terminations for the four Handymaxes: Faithful, Doubtless, Spotless and Vanguard.

In April, Top had agreed with owners of the Relentless to terminate that bareboat charter for a termination fee of $2.5M.

“These were the last leased vessels in our fleet,” said Top in its annual filing after market close yesterday. In addition to the termination fee, Top will forfeit its right to the related $10M ‘sellers credit’ from the 2005 sale-leaseback transaction. Top further disclosed that as part of the termination agreement, it is paying for the drydocking of Spotless, now under way.

Top explained that over the past two years, it opted to unwind the bareboat charter agreements “either by reacquiring tankers previously sold and leased back, initiating the sale process by the lessors to third parties, or terminating leases in exchange for a termination fee”.

Top did the sale-leaseback transaction for 13 tankers in 2005 “to take advantage of the high asset price environment at the time”.

Accounting of that transaction eventually led to a sweeping results restatement, the resignation of its auditor, and a class-action shareholders suit. TOP SHIPS has terminated its four remaining bareboat charters and will pay a termination fee of $11.75M.

(Source: Fairplay)