Transformed

The shipowner, formerly known as Aries, has transformed itself and in our estimation has achieved critical mass. It may be small cap by definition but its growth trajectory is unparalleled. Since the company began the process of recapitalizing in the 4^th quarter of last year, NewLead Holdings Ltd has acquired 17 new vessels, including five newbuildings, while divesting inefficient non-core vessels and exiting the container sector. Unlike its peers, it has adopted a strategy of focusing on two diverse sectors, dry bulk and product tankers, rather than being a pure play, thereby minimizing to an extent portfolio risk.

In this week’s transaction, Newlead has signed a letter of intent with its affiliate Grandunion Inc., the private company controlled by its executives, for the dropdown of five dry bulk vessels, including 2 newbuildings, and the right of first refusal for three Korean built 81,000 DWT Kamsarmaxes, scheduled for delivery in 2013 with long-term charters attached. Total consideration for the dropdown of the five vessels is ~$148 million, which includes assumed debt and shipyard financing. The transaction is expected to close in the 3^rd quarter of 2010.

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Denouement

The Aries Maritime Transport Limited (“Aries”) story begins anew. Last week, Aries entered into a securities purchase agreement with Grandunion Inc., a company controlled by Michail Zolotas and Nicholas Fistes, pursuant to which the company has agreed to acquire three capsize bulkcarriers, with an approximate net asset value of $36 million in exchange for 18,977,778 shares. A description of the vessels being acquired is shown herein.
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A Grand Union?

Last Wednesday, Aries Maritime announced that it had entered into a letter of intent with Grandunion Inc, a company controlled by Michael Zolotas and Nicholas Fistes, that contemplates the acquisition by Aries of 3 Capesize vessels, with an approximate net asset value of $36 million, in exchange for ~16 million newly issued shares and a change in control of Aries’ board. Based upon a share count of 29 million shares, the new owners will control ~35.5% while the ownership interest of the company, affiliated with Messrs Bolin and Petridis, will have it’s interest diluted to ~ 33.1%.
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Another SPAC Finds a Target

On August 27th, Tailwind Financial Inc. (“Tailwind”) announced that it had signed a letter of intent with GrandUnion Inc. (“GrandUnion”) to acquire 20 drybulk vessels, of approximately 2 million DWT, including 9 newbuildings to be delivered in 2010 and 2011. The 11 on the water vessels are valued in excess of $600 million and are expected to generate EBITDA in excess of $113 million for 2009.

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