This summary highlights some basic information contained or incorporated by reference in this prospectus supplement or the accompanying prospectus. This summary is not complete and does not contain all of the information that you should consider before investing in our common stock. You should carefully read the entire prospectus supplement and the accompanying prospectus, as well as the documents incorporated by reference, especially the risks relating to our business and operations and the risks of investing in our common stock discussed under “Risk Factors” and the “Risk Factors” section in our Annual Report on Form 10-K/A for the year ended December 31, 2009 and in our subsequent quarterly reports on Form 10-Q. Unless we or the context otherwise indicates, in this prospectus supplement references to “we”, “us”, “our company” and “our” refer to General Maritime Corporation and its subsidiaries.

 

Unless otherwise stated in this prospectus supplement, we have assumed throughout this prospectus supplement that the underwriters’ option to purchase additional shares is not exercised.

 

About General Maritime

 

We are a leading provider of international seaborne crude oil transportation services. We also provide transportation services for refined petroleum products. As of June 14, 2010, our fleet consists of 31 wholly owned vessels: two VLCCs, 11 Suezmax vessels, 12 Aframax vessels, two Panamax vessels and four Handymax vessels. The weighted-average age of our fleet as of March 31, 2010 was 9.9 years. These vessels have a total of 3.9 million dwt carrying capacity on a combined basis and all are double-hulled. Many of the vessels in our fleet are “sister ships,” which provide us with operational and scheduling flexibility, as well as economies of scale in their operation and maintenance. Our customers include major international oil companies and vessel owners such as Chevron Corporation, CITGO Petroleum Corp., ConocoPhillips, Exxon Mobil Corporation, Hess Corporation, Lukoil Oil Company, Stena AB and Sun International Ltd.

 

We employ one of the largest fleets in the Atlantic basin. Vessels owned by us operate in ports in the Caribbean, South and Central America, the United States, West Africa, the Mediterranean, Europe and the North Sea. We have focused our operations in the Atlantic because we believe that our stringent operating and safety standards represent a potential competitive advantage. Transportation of crude oil to the U.S. Gulf Coast and other refining centers in the United States requires vessel owners and operators to meet more stringent environmental regulations than in other regions of the world. Although the majority of our vessels operate in the Atlantic, we also currently operate vessels in the Black Sea and in other regions. We believe this enables us to take advantage of market opportunities and helps us to position our vessels in anticipation of drydockings.

 

We actively monitor market conditions and changes in charter rates and manage the deployment of our vessels between spot market voyage charters, which generally last from several days to several weeks, and time charters, which generally last one to three years. Our strategy is intended to provide greater cash flow stability through the use of time charters for part of our fleet, while maintaining the flexibility to benefit from improvements in market rates by deploying the balance of our vessels in the spot market.

Commercial management for our vessels is provided through our wholly-owned subsidiary, General Maritime Management LLC. The following chart provides information regarding our vessels.

 

 

 

Our company’s leadership has considerable breadth and depth of shipping industry experience. Our New York City-based management team includes several executives with extensive experience in the shipping industry who have demonstrated a substantial ability to manage the commercial, technical and financial aspects of our business. The leader of our management team is our President, John P. Tavlarios, who possesses knowledge and experience regarding our history and operations and the shipping and international oil industry. Our Chief Financial Officer, Jeffrey D. Pribor, has over 20 years of banking, capital markets, shipping and legal experience. Six of the seven members of our Board of Directors also have extensive maritime experience, including our Chairman and founder, Peter C. Georgiopoulos. Mr. Georgiopoulos, who has over 20 years of maritime experience, founded Genco Shipping & Trading Limited (NYSE: GNK), a drybulk shipping company that transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes in 2004, and Baltic Trading Limited (NYSE: BALT), a drybulk shipping company in 2010, and serves as Chairman of the Board of Aegean Marine Petroleum Network Inc. (NYSE: ANW), a marine fuel logistics company that physically supplies and markets refined marine fuel and lubricants to ships in port and at sea.

 

We are incorporated under the laws of the Republic of the Marshall Islands. We maintain our principal executive offices at 299 Park Avenue, New York, New York 10171. Our telephone number at that address is (212) 763-5600. Our website is located at www.generalmaritimecorp.com. Information on our website is not part of this prospectus supplement or the accompanying prospectus.

 

Recent Developments

 

On June 3, 2010, we entered into agreements with an unaffiliated third party seller under which we agreed to purchase five VLCCs built between 2002 and 2010 and two Suezmax newbuildings, which we refer to as the proposed vessel acquisitions, for an aggregate price of approximately $620 million. One of the VLCCs under these agreements is currently employed under a time charter with an expiration date of January 2011 at a gross rate of $32,500 per day. Another VLCC is currently employed under a time charter with an expiration date of February 2011 with a six month renewal option at a gross rate of $33,500 per day and $41,000 per day for the option period. We expect to take delivery of these two VLCCs with the associated time charter contracts and in connection therewith we expect to obtain the approval of the charterers to novate the associated time charter contracts prior to the completion of this offering. Two other VLCCs are currently employed under time charters with expiration dates of September 2010, and we expect to take delivery of such VLCCs in October 2010 following the expiration of the time charters.

 

The obligations of the parties under the vessel acquisition agreements are subject to the completion this offering as well as the Company obtaining necessary financing, in each case on or prior to June 24, 2010. The agreements provide that, in the event we are unable to raise the full amount of the purchase price, we are obligated to purchase vessels in an amount equal to the financing raised. We understand that the condition that we obtain necessary financing will be satisfied upon the completion of this offering. All of the purchases are also subject to customary additional documentation and closing conditions. If the conditions to closing under these agreements are satisfied and we are unable, unwilling or otherwise fail to close, we may be required to forfeit any deposits or other pre-closing amounts paid pursuant to these agreements and may be liable for any additional damages resulting from the failure to close. Please see “Risk Factors — We may be liable for damages if the vessel acquisitions fail to close as a result of our unwillingness, inability or other failure to pay the purchase price under, or any other breach by us of, the agreements relating to the vessel acquisitions”. We expect to pay for the vessels as they are delivered between July 2010 and April 2011. We intend to finance these vessels primarily using the net proceeds from this offering as well as borrowings under the new credit facility. Following the satisfaction of our financing conditions under these agreements, we expect to pay cumulative deposits of $62 million to the seller using

proceeds from this offering. The following table sets forth additional information about the vessels we have agreed to purchase:

 

 

 

We are seeking a new revolving credit facility in the amount of $372 million, which we refer to as the proposed new credit facility, primarily to fund a portion of the purchase price of the proposed vessel acquisitions, and in connection therewith we entered into a commitment letter, which we refer to as the Commitment Letter, on June 8, 2010 with Nordea Bank Finland plc, New York Branch, or Nordea, and DnB NOR Bank ASA to serve as joint lead arrangers and joint bookrunners of a new senior secured credit facility, which we refer to as the proposed new credit facility. Nordea will serve as sole administrative agent and collateral agent for the proposed new credit facility. The Commitment Letter contemplates a five-year $372 million senior secured credit facility, which would be comprised of a senior secured delayed-draw term loan facility in the aggregate principal amount of up to $372 million, $50 million of which would convert to a revolving credit facility. We plan to borrow the full amount under the proposed new credit facility for the proposed vessel acquisitions.

 

A newly formed subsidiary of the Company would be the borrower under the proposed new credit facility and the Company and certain of its subsidiaries would guarantee the borrower’s obligations thereunder. The proposed new credit facility would have a maturity date of five years after the date on which definitive documentation for the facility is executed, and borrowings under the facility would bear interest at LIBOR plus an applicable margin of 3.0%. Repayment under the proposed new credit facility would be made quarterly beginning, for any vessel, on the last day of the calendar quarter after loans are drawn under the facility to acquire such vessel, and the amortization of indebtedness related to a particular vessel shall be scheduled such that any indebtedness related to a particular vessel shall be paid down completely at the end of the period equal to 15 years minus the age of such vessel on its acquisition date (any then unpaid amounts would be due at the maturity of the new credit facility). The Commitment Letter contemplates that the proposed new credit facility will limit the amount of dividends that the Company is permitted to declare or pay in respect of any fiscal year to an aggregate of $30 million. Covenants included in the proposed new credit facility are expected to require us to maintain a minimum cash balance (which may take into account up to $25 million of availability, if any, under the credit facilities) of $50 million, as well as a maximum leverage ratio of not greater than 6.5x until September 30, 2010, 6.0x from October 1, 2010 until September 30, 2011 and 5.5x thereafter. In addition, the terms of the proposed new credit facility are expected to include a collateral maintenance covenant requiring that the fair market value of all vessels acting as security for the proposed new credit facility shall at all times be at least 135% of the sum of the then aggregate outstanding principal amount of loans under the proposed new credit facility. The proposed new credit facility is also expected to require us to comply with a number of customary covenants, including related to consolidated net worth; delivery of quarterly and annual financial statements and annual projections; maintaining adequate insurances; compliance with laws (including environmental); compliance with ERISA; maintenance of flag and class of the initial vessels;

restrictions on consolidations, mergers or sales of assets; limitations on liens; limitations on additional indebtedness; limitations on issuance of certain equity interests; restrictions on paying dividends; limitations on transactions with affiliates; and other customary covenants.

 

The proposed new credit facility is subject to definitive documentation and customary closing conditions; accordingly, no assurance can be given that the proposed new credit facility will be procured on the terms, including the amount available to be borrowed, described above, or at all.

 

We do not expect to enter into the proposed new credit facility prior to the closing of this offering. Please see “Risk Factors — We cannot assure you that we will enter into the proposed new credit facility or that if we do so that we will be able to borrow all or any of the amounts committed thereunder”.

 

We are seeking an amendment to our existing 2005 Credit Facility in order to incur indebtedness in connection with the proposed vessel acquisitions. We have been in discussions with our lenders and anticipate that such an amendment will be entered into following the completion of this offering.

 

In the event that we are unable to complete this offering or enter into or borrow under the proposed new credit facility, our ability to complete the vessel acquisitions will be materially adversely affected. There can be no assurance that we will enter into the proposed new credit facility or that we will be able to borrow all or any of the amounts committed thereunder.

Summary Consolidated Financial Data

 

The following historical summary consolidated financial and other data should be read in connection with, and are qualified by reference to, the financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Amended Annual Report on Form 10-K/A and our most recent Quarterly Report on Form 10-Q, incorporated herein by reference. Our summary historical consolidated financial and other data for the years ended December 31, 2007, 2008, and 2009 have been derived from our audited annual financial statements which are incorporated into this prospectus supplement by reference. The historical interim data as of and for the three months ended March 31, 2009 and 2010 have been derived from our unaudited interim historical consolidated financial statements and the notes to those statements, which are included in our most recent Quarterly Report on Form 10-Q and incorporated by reference herein and which have been prepared on a basis consistent with our annual consolidated financial statements. In the opinion of management, such unaudited financial data reflect all adjustments necessary for a fair presentation of the results for the periods presented.

 

Historical results are not necessarily indicative of results that may be expected for any future period.

 

 

 

 

 

 

We have prepared the information set forth below to present the proposed vessel acquisitions as if they had all occurred on January 1, 2009 for income statement purposes and on March 31, 2010 for balance sheet purposes. The accompanying financial and operating data are adjusted to give effect to this offering as well as the proposed new credit facility, the expected indicative terms of which are set forth in the section titled “Recent Developments”. For purposes of estimating net voyage revenue, we have assumed that the vessels operate at our historical average utilization rate for the periods presented. In addition, we assumed that the vessels operated on the spot market at assumed daily spot market rates for the three months ended March 31, 2010 and the year ended December 31, 2009 of $59,819 and $36,502, respectively, for each VLCC tanker and $36,709 and $26,998, respectively, for each Suezmax tanker, based on historic spot rates for the periods presented supplied by a third party shipping research data provider, which are in each case net of all commissions on charter hire. For the three months ended March 31, 2010 and the year ended December 31, 2009, Direct Vessel Expenses are assumed to be $9,672 and $10,685, respectively, for each VLCC tanker and $8,234 and $7,799, respectively, for each Suezmax tanker, and are based on the historical results of our existing vessels of a similar class and age plus $550 per day for each vessel to cover a third-party technical manager fee. General and administrative costs were increased from 2009 historical results by $300,000 per annum for the addition of a vessel accountant and vessel operator.

 

The as adjusted financial and operating data are not intended to constitute pro forma financial information within the meaning of regulations promulgated by the Securities and Exchange Commission, but in our view, were prepared on a reasonable basis, and reflect the best currently available estimates and judgments. This information does not represent actual results and should not be relied upon as being necessarily indicative of future results. In particular, the information below assumes all vessels were delivered on January 1, 2009, whereas some or all of the vessels will be delivered from July 2010 to April 2011.

 

We caution you not to place undue reliance on this supplemental financial information. Neither our independent auditors, nor any other independent accountants, have compiled, examined, or performed any procedures with respect to the supplemental financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the supplemental financial information.

 

 

 

 

 

Dividend Policy

 

Our history of dividend payments is as follows:

 

 

 

All share and per share amounts presented throughout this prospectus supplement and the accompany prospectus, unless otherwise noted, have been adjusted to reflect the exchange of 1.34 shares of our common stock for each share of common stock held by shareholders of General Maritime Subsidiary in connection with the Arlington acquisition.

 

General Maritime Subsidiary announced on February 21, 2007 that its Board of Directors changed its quarterly dividend policy by adopting a fixed target amount of $0.37 per share per quarter or $1.49 per share each year, starting with the first quarter of 2007. On December 16, 2008, our Board of Directors adopted a quarterly dividend policy with a fixed target amount of $0.50 per share per quarter or $2.00 per share each year. We announced on July 29, 2009 that our Board of Directors changed our quarterly dividend policy by adopting a fixed target amount of $0.125 per share per quarter or $0.50 per share each year, starting with the third quarter of 2009. We intend to declare dividends in April, July, October and February of each year.

Following the completion of this offering, we expect our Board of Directors to change our quarterly dividend policy by reducing the current fixed quarterly target dividend of $0.125 per share by an amount such that the aggregate amount of dividends paid by us on an annualized basis, taking into account the additional shares that will be issued and outstanding following the completion of this offering, will be approximately equal to the aggregate amount of dividends currently paid by the us on an annualized basis. If the Board approves such change to the dividend policy, the fixed target amount would be approximately $0.08 per share, assuming:

 

 

The declaration of dividends and their amount, if any, will depend upon our results and the determination of our Board of Directors. Any dividends paid will be subject to the terms and conditions of our indebtedness and applicable provisions of Marshall Islands law. Our dividend policy may be changed at any time by our Board of Directors.

 

Risk Factors

 

Investing in our common stock involves substantial risk. You should carefully consider all the information in this prospectus supplement and the accompanying prospectus prior to investing in our common stock. In particular, we urge you to consider carefully the factors set forth in the section of this prospectus supplement entitled “Risk Factors” beginning on page S-14 and “Item 1A. Risk Factors” in our Annual Report on Form 10-K/A incorporated herein by reference.