TOP Tankers $300 million convertible talk sweetened to 5.875%-6.0%, up 30%-32.5%

Nashville, May 3 - Athens-based shipping firm TOP Tankers Inc.'s $300 million perpetual convertible preferred was sweetened Tuesday, bumping the dividend to 5.875% to 6.0% from 5.625% to 5.875% and the initial conversion premium to 30% to 32.5% from a range of 32.5% to 37.5%.

In addition to the put option in year five, puts were added in years 10 and 15.

The issue is effectively being sold on swap, as the company also said that it has been advised that Kingdom Holdings, one of its shareholders, intends to purchase about $20 million of TOP Tankers common shares from purchasers of the convertible. Also, the company said it plans to use about $50 million of proceeds to repurchase stock.

Cantor Fitzgerald is sole bookrunner of the Rule 144A offering, which is slated to price after the market close Wednesday or Thursday.

The issue will be non-callable for five years. There is full dividend protection, as well as takeover protection, for holders.

A $45 million greenshoe is available.

TOP Tankers said it would use proceeds to fund vessel acquisitions and for general corporate purposes, in addition to plans for the stock buyback.

Last week, TOP Tankers reported first-quarter net income of $19.1 million, or $0.69 per share, compared with net income of $1.24 million, or $0.21 per share, for first-quarter 2004. Net income excludes compensation from the delayed delivery date of five Suezmax tankers acquired with proceeds of a follow-on offering in November, which would have boosted net income to $25.87 million, or $0.93 per share.

Operating income was $21 million compared with $1.6 million, and EBITDA rose to $29.7 million from $3 million a year earlier. Again, the company noted that EBITDA did not include compensation for the delayed delivery of the five Suezmax tankers, which would have boosted EBITDA to $36.5 million.

Revenues for first quarter climbed to $47.3 million from $7.73 million a year ago.

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