We are a Marshall Islands company that transports iron ore, coal, grain, steel
products and other drybulk cargoes along worldwide shipping routes through the
ownership and operation of drybulk carrier vessels. Excluding vessels of Baltic
Trading, our fleet currently consists of nine Capesize, eight Panamax, 17 Supramax,
six Handymax and 13 Handysize drybulk carriers, with an aggregate carrying capacity
of approximately 3,810,000 deadweight tons (“dwt”), and the average
age of our fleet is currently approximately 9.8 years, as compared to the average
age for the world fleet of approximately 9 years for the drybulk shipping segments
in which we compete. We seek to deploy our vessels on time charters, spot market-related
time charters or in vessel pools trading in the spot market, to reputable charterers,
including Cargill International S.A., including its subsidiaries, Pacific Basin
Chartering Ltd., Swissmarine Services S.A., including its subsidiaries and the
Clipper Logger Pool, in which Clipper Group acts as the pool manager.
In addition, Baltic Trading’s fleet currently consists of four Capesize,
two Ultramax, four Supramax and five Handysize drybulk carriers with an aggregate
carrying capacity of approximately 1,221,000 dwt. After the expected delivery
of the two additional Ultramax newbuilding vessels that Baltic Trading has agreed
to acquire, Baltic Trading will own a fleet of 17 drybulk vessels, consisting
of four Capesize, four Ultramax, four Supramax and five Handysize vessels with
a total carrying capacity of approximately 1,349,000 dwt.
We entered into a long-term management agreement with Baltic Trading pursuant
to which we apply our expertise and experience in the drybulk industry to provide
Baltic Trading with commercial, technical, administrative and strategic services.
The Management Agreement is for an initial term of approximately 15 years and
will automatically renew for additional five-year periods unless terminated
in accordance with its terms. Baltic Trading will pay us for the services we
provide it as well as reimburse us for our costs and expenses incurred in providing
certain of these services. Management fee income we earn from the Management
Agreement net of any allocated shared expenses, such as salary, office expenses
and other general and administrative fees, will be taxable to us. Upon consolidation
with Baltic Trading, any management fee income earned will be eliminated for
financial reporting purposes.
Our management team and our other employees are responsible for the commercial
and strategic management of our fleet. Commercial management includes the negotiation
of charters for vessels, managing the mix of various types of charters, such
as time charters, voyage charters and spot market-related time charters, and
monitoring the performance of our vessels under their charters. Strategic management
includes locating, purchasing, financing and selling vessels. We currently contract
with three independent technical managers to provide technical management of
our fleet at a lower cost than we believe would be possible in-house. Technical
management involves the day-to-day management of vessels, including performing
routine maintenance, attending to vessel operations and arranging for crews
and supplies.
We hold an investment in the capital stock of Jinhui and KLC. Jinhui is a drybulk
shipping owner and operator focused on the Supramax segment of drybulk shipping.
KLC is a marine transportation service company which operates a fleet of carriers
which includes carriers for iron ore, liquefied natural gas and tankers for
oil and petroleum products.
We provide technical services for drybulk vessels purchased by MEP under an
agency agreement between us and MEP. These services include oversight of crew
management, insurance, drydocking, ship operations and financial statement preparation,
but do not include chartering services. The services are provided for a fee
of $750 per ship per day plus reimbursement of out-of-pocket costs and will
be provided for an initial term of one year. MEP will have the right to cancel
provision of services on 60 days’ notice with payment of a one-year termination
fee or without a fee upon a change of our control. We may terminate provision
of the services at any time on 60 days’ notice. Mr. Georgiopoulos controls
and has a minority interest in MEP.
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