On closing of the transaction, Grandunion's chairman Nicholas Fistes would serve as the chairman of Aries' board of directors, and CEO Michael Zolotas would serve as member of Aries' board & president of the company.
Grandunion would also designate Aries' chief financial officer and two more of the seven-member board.
The letter of intent is subject to a number of conditions, including a commitment from a bank for a fully underwritten private issuance of $145 million aggregate principal amount of 7% Senior Unsecured Convertible Notes due 2014, the proceeds of which would be used primarily to fund vessel acquisitions and partially repay existing indebtedness; and obtaining certain amendments to the company's existing senior credit facilities.
The letter of intent provides for a binding sixty-day exclusivity period and a $3 million break-up fee payable to Grandunion in certain events.
The exclusivity period will terminate if Grandunion is unable to procure the required signed commitment letter from a bank. The letter of intent may also be terminated if no definitive agreement has been entered into by August 31st.
Grandunion's Zolotas and Fistes have more than twenty years' experience operating shipping companies.
Fistes serves as the chairman of Grandunion, chairman of the International Association of Independent Tanker Owners (IntertanKo) and is a member of Intercargo's executive committee.
Zolotas is CEO of Grandunion and president of Stamford Navigation.
Aries Maritime Transport's fleet comprises five MR tankers and four Panamax tankers, all of which are double-hulled. The company also owns a fleet of three container vessels that range in capacity from 1,799 to 2,917 TEU. Nine of the company's twelve vessels are secured on period charters, and charters for two of the product tanker vessels currently have profit-sharing components.
