Blank check company Cambridge Capital Acquisition Corporation and privately-held tanker owner Parakou Tankers, Inc. have entered into a merger agreement.
The deal stipulates that Parakou will become a publicly listed company through a merger transaction with Cambridge.
Once the transactions are completed, Cambridge will be merged with and into a newly formed Marshall Islands company and wholly owned subsidiary of Cambridge, Cambridge Holdco, Inc. (Holdco), with Holdco surviving the merger.
A newly formed Marshall Islands company and wholly owned subsidiary of Holdco, Cambridge Merger Sub, Inc. will merge with and into Parakou, with Parakou surviving the merger and becoming a wholly-owned subsidiary of Holdco.
According to Cambridge, after the completion of the proposed mergers, Holdco intends to pursue acquisitions of additional MR product tankers “to meet the need for moving refined petroleum products, vegetable oils, palm oils, easy chemicals and biofuels globally. “
Parakou has letters of intent or is actively negotiating agreements to acquire an additional 20 MR product tankers by the fourth quarter of 2017.
It is expected that the acquisition of these MR product tankers would be funded by a combination of cash on hand, a portion of the proceeds from the Trust Fund and equity and/or debt financing.
Benjamin Gordon, Chief Executive Officer of Cambridge , said, “We believe this is a very attractive time to invest in the product tanker market, as demand for refined petroleum products continues to grow globally. In addition to providing Parakou with immediate growth capital to fund fleet expansion, we also hope to bring to bear our capital markets and M&A expertise to help Por’s management team grow value for all shareholders.”
Por Liu, Chief Executive Officer of Parakou , commented, ” We believe that joining forces with Cambridge will enable Parakou to realize both its near term and longer term growth objectives as a Nasdaq-listed company in the U.S. This is especially important in our industry, owning and operating a modern fleet of MR product tankers, which we believe has compelling long-term fundamentals.”
As of December 2, 2014, Parakou’s fleet consists of eight 51,000 deadweight ton MR product tankers, which were transferred in July 2014 from Parakou (International) Limited, a Hong-Kong based shipping firm founded in 1985.
Press Release