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11/16/2010Press Releases


“The third quarter of 2010 was another important quarter in our development as we completed successfully the acquisition of the remaining 49% ownership interest in Maritime Capital Shipping Limited (“MCS”). In addition, on October 22, 2010 we completed the acquisition of the remaining 50% ownership interest in Bulk Energy Transport (Holdings) Limited (“BET”) and, as a result, we now own 100% of MCS and BET and their fleets. These transactions increased the size of our wholly owned fleet to 20 vessels, and we believe these transactions significantly improved our income generating capabilities and simplified our balance sheet.

Consistent with our strategy of seeking profitable long term employment for our vessels, during the third quarter we secured new time charters for four of our vessels. We believe that these new time charters are with highly reputable charterers at attractive charter hire rates. Three of these time charters have profit sharing arrangements. Our time charter coverage is among the highest in the industry, which we believe provides cash flow stability and protection against the volatile freight rate environment coupled with upside potential, as five of our vessels in total are under profit sharing arrangements that allow us to participate in market upswings.

We continue to have discussions with our charterers about the vessels that are scheduled to be redelivered to us following the expiration of their contracts. Consistent with our strategy, we seek to reemploy these vessels at profitable rates.

We believe that dry bulk fundamentals remain stable as we expect demand for core commodities, namely iron ore and coal, to remain strong from China and India. Industry sources project that over the next 10 years, China’s GDP will continue growing at 7% per year on average, while over the next two years India’s GDP is expected to grow at an annual rate of 9%. Industry sources further indicate that a catalyst for the dry bulk industry in the fourth quarter 2010 is expected to be China’s inventory buildup of iron ore and coal ahead of winter.

Although the risk of oversupply is still a factor in the dry bulk market, the rate of actual deliveries remains unclear. Industry sources remain skeptical concerning the ability of Greenfield shipyards that have never built vessels before, to deliver vessels ordered, while at the same time vessel deliveries in 2011 reflect orders that were contracted at prices significantly above current market levels. In addition, the capital needed to finance the completion of these newbuildings remains a concern for many companies. We expect to benefit from the fact that there have been fewer deliveries of smaller types of vessels, such as the Handysize, which constitute a significant portion of our fleet, as this should make this segment more attractive for the owners.

Our focus on accretive growth will remain a primary goal as we continue seeking attractive investments that can enhance shareholder value for the longer term.”
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