StealthGas Inc. was incorporated in December 2004 in the Republic of the Marshall
Islands. Our registered address in the Marshall Islands is Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960. The name of
our registered agent at such address is The Trust Company of the Marshall Islands,
Inc. Our principal executive offices are located at 331 Kifissias Avenue, Erithrea
14561 Athens, Greece. Our telephone number for calls originating from the United
States is (011) (30) (210) 625-0001.
In October 2005, we completed an initial public offering of our common stock
in the United States and our common stock began trading on the Nasdaq National
Market and now trade on the Nasdaq Global Select Market under the symbol “GASS”.
We own a fleet of LPG carriers providing international seaborne transportation
services to LPG producers and users, as well as crude oil and product carriers
chartered to oil producers, refiners and commodities traders.
Our LPG carriers carry various petroleum gas products in liquefied form, including
propane, butane, butadiene, isopropane, propylene and vinyl chloride monomer,
which are all byproducts of the production of crude oil and natural gas. The
three medium range product carriers in our fleet are capable of carrying refined
petroleum products such as gasoline, diesel, fuel oil and jet fuel, as well
as edible oils and chemicals, while our Aframax tanker is used for carrying
crude oil. We believe that we have established a reputation as a safe, cost-efficient
operator of modern and well-maintained LPG carriers. We also believe that these
attributes, together with our strategic focus on meeting our customers’
chartering needs, has contributed to our ability to attract leading charterers
as our customers and to our success in obtaining charter renewals. We are managed
by Stealth Maritime, a privately owned company controlled by the Vafias Group.
We have a management agreement with Stealth Maritime, pursuant to which Stealth
Maritime provides us with technical, administrative, commercial and certain
other services. Stealth Maritime is a leading ship-management company based
in Greece, established in 1999 in order to provide shipping companies with a
range of services. Our manager’s safety management system is ISM certified
in compliance with IMO’s regulations by Lloyd’s Register. In relation
to the technical services, Stealth Maritime is responsible for arranging for
the crewing of the vessels, the day to day operations, inspections and vetting,
maintenance, repairs, drydocking and insurance. Administrative functions include
but are not limited to accounting, back-office, reporting, legal and secretarial
services. In addition, Stealth Maritime provides services for the chartering
of our vessels and monitoring thereof, freight collection, and sale and purchase.
In providing most of these services, Stealth Maritime pays third parties and
receives reimbursement from us. In addition, Stealth Maritime may subcontract
technical management and crew management for some of our vessels to third parties,
including Selandia, a ship management company based in Singapore and Manila,
Swan Shipping Corporation and PTC, both based in Manila, Brave Maritime (an
affiliate of Stealth Maritime) based in Greece, and Bernard Schulte Shipmanagement
based in Athens. These five technical managers are supervised by Stealth Maritime.
The technical management of eight of our ships was subcontracted by Stealth
Maritime to Brave Maritime.
We, through Stealth Maritime, manage the employment of our fleet. We deploy
our LPG carriers and tankers on period charters, including time and bareboat
charters that can last up to several years, and spot market charters (through
voyage charters and short-term time charters), which generally last from one
to six months, subject to market conditions. Time and bareboat charters are
for a fixed period of time. A voyage charter is generally a contract to carry
a specific cargo from a loading port to a discharging port for an agreed-upon
total charge. Under voyage charters we pay for voyage expenses such as port,
canal and fuel costs. Under a time charter the charterer pays for voyage expenses
while under a bareboat charter the charterer pays for voyage expenses and operating
expenses such as crewing, supplies, maintenance and repairs including special
survey and dry-docking costs.
Vessels operating in the spot market generate revenues that are less predictable
but may enable us to capture increased profit margins during periods of improvements
in LPG charter rates, although we are then exposed to the risk of declining
LPG carrier charter rates. Typically spot market charters can last from a few
days up to two months. If we commit vessels to period charters, future spot
market rates may be higher or lower than those rates at which we have period
chartered our vessels.
In formulating our chartering strategy we evaluate past, present and future
performance of the freight markets and balance the mix of our chartering arrangements
in order to achieve optimal results for the fleet. As of April 1, 2015 and including
our two chartered in vessels, we had 10 LPG carriers operating in the spot market,
13 vessels on time charters expiring in 2015, 10 on time charters expiring from
2016 to 2022 and 14 on bareboat charters expiring from 2015 to 2022. In terms
of charter coverage as of April 1, 2015 we had 63% of the available calendar
days fixed under period charters for 2015, and 34% for 2016; in each case excluding
the 15 LPG carriers we have contracted to acquire, for only 5 of which we have
arranged employment.
While the majority of our fleet is operating in the Far East, we deploy vessels
globally. Some of the areas where we usually operate are the Middle East, the
Mediterranean, North West Europe and Latin America. According to industry reports
the United States may increase its exports of LPG products in the near future.
In the event this creates more demand for vessels like ours, we would expect
to deploy more vessels in the United States and the Caribbean. As freight rates
usually vary between these areas as well as voyage and operating expenses, we
evaluate such parameters when positioning our vessels for new employment.
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