SHIP » Topics » Seanergy Board Considerations

This excerpt taken from the SHIP 6-K filed Jul 31, 2008.
Seanergy Board Considerations
 
Seanergy’s board of directors determined that the vessel acquisition is in the best interest of Seanergy and its shareholders. In reaching its determination, Seanergy’s board of directors considered a number of factors, including the following material factors, which the board believes favor the transaction:
 
  •  the written fairness opinion provided by Axiom and the formal presentation made to the board of directors of Seanergy by Axiom via conference call that the consideration to be paid in conjunction with the vessel acquisition was fair, from a financial point of view, to Seanergy’s shareholders, specifically, the board of directors gave significant weight to the discounted cash flow analysis, which allowed it to evaluate the earnings potential of the vessels following the vessel acquisition, and the comparable company analysis, which gave the board comfort that it was employing the correct multiples in its evaluation of the transaction and gave less weight to the precedent transaction and evaluation analysis, which gave the board comfort that its view of the transaction valuation was reasonable, but was discounted due to the fact that, as noted by Axiom, its precedent transaction analysis did not capture the full value of the transaction;
 
  •  the high quality of the vessels, including the average age of approximately 10.5 years upon completion of the vessel acquisition;
 
  •  the terms of the charter agreements entered into and the good reputations of the charterers under such agreements;
 
  •  the reduced level of cash outlay required to complete the purchase of the vessels, as compared to an all cash acquisition, because the purchase price includes debt and equity, which will leave Seanergy with a greater amount of cash following the vessel acquisition;
 
  •  the “desk appraisal” vessel valuations obtained by Associated Shipbroking S.A.M. among others, which assisted the board in its conclusion that the consideration to be paid in the transaction was reasonable;
 
  •  the assessment by Seanergy’s management that, consistent with industry practice, the value of the Master Agreement that Seanergy entered into is equivalent in value to the underlying value of the vessels respectively and thus the 80% amount in the Trust Account (excluding deferred underwriting discounts and commissions in the amount of $5,362,500) test was met; and
 
  •  the fact that the agreement to purchase the six vessels was the result of a comprehensive review conducted by Seanergy’s board (with the assistance of its financial advisors) of the strategic alternatives available to Seanergy, leading to the conclusion that the vessel acquisition is in the best interests of Seanergy’s shareholders.
 
Seanergy’s board of directors also considered potential risks relating to the vessel acquisition, including the following:
 
  •  failure to deliver the vessels to Seanergy;
 
  •  volatility of charter rates and vessel values; and
 
  •  the risks and costs to Seanergy if the vessel acquisition is not completed, including the need to locate another suitable business combination or arrangement and obtain shareholder approval and complete the business combination by September 28, 2009.
 
The foregoing discussion of the information and factors considered by Seanergy’s board of directors is not intended to be exhaustive, but includes all currently known material factors, both positive and negative, that the board of directors considered in reaching its determination that the vessel acquisition is in the best interests of Seanergy and its shareholders. In view of the variety of factors considered in connection with its evaluation of the vessel acquisition, Seanergy’s board of directors did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. In addition, individual directors may have given differing weights to different factors. After weighing all of the different factors, Seanergy’s board of directors determined to recommend that Seanergy shareholders vote “FOR” the approval and authorization of the vessel acquisition at the special meeting.


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This excerpt taken from the SHIP 6-K filed Jun 17, 2008.
Seanergy Board Considerations
 
Seanergy’s board of directors determined that the Business Combination is in the best interest of Seanergy and its shareholders. In reaching its determination, Seanergy’s board of directors considered a number of factors, including the following material factors, which the board believes favor the transaction:
 
  •  the written fairness opinion provided by Axiom and the formal presentation made to the board of directors of Seanergy by Axiom via conference call that the consideration to be paid in conjunction with the Business Combination was fair, from a financial point of view, to Seanergy’s shareholders, specifically, the board of directors gave significant weight to the discounted cash flow analysis, which allowed it to evaluate the earnings potential of the vessels following the Business Combination, and the comparable company analysis, which gave the board comfort that it was employing the correct multiples in its evaluation of the transaction and gave less weight to the precedent transaction and evaluation analysis, which gave the board comfort that its view of the transaction valuation was reasonable, but was discounted due to the fact that, as noted by Axiom, its precedent transaction analysis did not capture the full value of the transaction;


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EXCERPTS ON THIS PAGE:

6-K
Jul 31, 2008
6-K
Jun 17, 2008
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