Mercator Lines arm to buy geared Panamax dry bulk carrier

Mercator Lines (Singapore) Ltd ('Mercator'), a leading Indian-owned international dry bulk shipping company focused on markets such as India and China, today announced that it has entered into a Memorandum of Agreement ('MOA') for the purchase of a geared Panamax dry bulk carrier, under its existing purchase option for approximately US$ 24.2 million.The vessel is a 2000-built vessel constructed by Imabari shipbuilding Co.Ltd, Japan. The vessel is currently hired on a time chartered-in basis by Mercator. The vessel is of 73,652 dwt capacity and is scheduled for delivery in May, 2009. The acquisition is proposed to be financed through a mix of internal accruals and debt.Mercator currently operates a fleet of 11 dry bulk vessels, nine owned and two chartered-in, comprising of geared and gearless Panamaxes and Kamsarmaxes the acquisition will expand Mercator's owned fleet to ten ships comprising of six geared and four gearless Panamaxes and Kamsarmaxes ships and will increase the total aggregate capacity of its owned fleet to 755,432 dwt, while maintaining the total operating capacity at 829,057 dwt.Mercator's strategic expansion of geared vessels to six, further strengthens its position as one of the largest fleet owner of geared Panamaxes not only amongst the Indian owned shipping companies but also in the world.Said Mr. Shalabh Mittal, Managing Director and Chief Executive Officer of Mercator, "The acquisition would further consolidate the company's presence as one of the largest owner in the niche market of geared Panamaxes. We believe our strategy of focusing on our core competencies of geared Panamaxes along with our ability to offer logistics support for the Indian trade will help us face the current challenging times".Mercator's fleet of geared vessels extends the company a distinctive edge to operate in ports with less developed infrastructures such as India, Indonesia. Further the geared vessels facilitate Mercator to offer comprehensive and customized logistic solutions to its customers in India. The company, together with its parent company Mercator Lines Ltd has been extending logistic solutions from the load port to the point of usage, to its customers in India This acquisition, while fortifying the deployment of geared vessels, extends Mercator a stronger position to capitalize on these opportunities.The acquisition is expected to have impact on Mercator's net tangible assets per share, earnings per share and operating results for the current financial year ending March 31, 2010 The Sellers are unrelated to the Directors and controlling shareholder of the Company. None of the Directors and controlling shareholders of the Company has any interest, direct or indirect, in the Charter. The acquisition is in the ordinary course of the Company's business.