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Strategies & Market Trends : Value Investing

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To: Joan Osland Graffius who wrote (15073)	8/6/2002 11:25:39 AM
From: Logain Ablar	of 78747

Hi Joan: Its been a while since I've read NAT & VLCCF's SEC filings. While the companies have many similarities a few main differences are: 1) The only NAT debt is when they issued debt to buy back shares (30M?). This is paid off at the end of the 7 year lease. VLCCF actually has much more debt incurred to acquire the tankers. So @ the end of the day when the tankers have to be sold in NAT's case the proceeds go to shareholders while the ULCCF's proceeds go to the lenders. 2) NAT lease after the 7 years is 1 yr annual renewals @ BP's option and I think BP has to give either 6 or 12 months notice. ULCCF is a 7 yr lease with a 7 year renew. I can't remember if the renew is automatic @ existing terms. I think (so I really don't remember but its in the documents) NAT / BP is on same terms but ULCCF has an increase for operating expenses with all things being equal the dividend would decrease. Probably the same terms for NAT. On the insurance at least for NAT BP insurers (has to be with Lloyds) the tankers with pretty good guarantees to NAT so the shareholders are protected for the CURRENT fair market value of the tankers in case of loss.

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