OCNF equity play

OceanFreight said Monday that it has scored an equity line of credit that could see it sell up to $148m worth of new shares.

The Nasdaq-listed bulker and tanker owner said in a securities filing that the deal with YA Global allows it to sell the shares gradually until February 2011.

The Athens-based company says that it will primarily use the proceeds of the equity deal to pay off debt.

That includes $25m owed for the 95,800-dwt tanker Tamara (built 1990) and the 95,951-dwt tanker Tigani (built 1991).

OceanFreight bought the vessels from George Economou's Cardiff Marine for a combined $79m. Economou is the uncle of OceanFreight chief executive Anthony Kandylidis.

Remaining funds will be used for general corporate purposes, capital expenditures, vessel acquisitions or enhanced liquidity.

OceanFreight unveiled a similar agreement in June for 4 million shares. The owner now says it has sold all of the shares in that arrangement, bringing in $50.9m in net proceeds.

Under the latest deal, YA Global will purchase the shares with a 1.5% discount on the daily average price of the share on the day of the sale.

OceanFreight owns nine bulkers and four tankers, fixing them out on medium- to long-term charters.

The latest financing disclosures come after the company revealed last month that it received a covenant waiver from lenders on its $325m senior secured credit facility. The deal dropped the loan's ship value requirements.

The company's shares fell by 4.8% Monday to $3.35 in midday trading on a generally down day for shipping stocks in New York.

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