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Genmar to Buy $600M in Ships: Report

NEW YORK ( TheStreet) -- Oil tanker operator General Maritime (GMR) may be close to signing a deal to acquire seven supertankers for $600 million to $700 million, a shipping-industry trade journal reported Tuesday night.

The deal includes five "very large crude carriers," or VLCCs, as well as two suezmax-size ships currently being built at shipyards, according to the journal, called Trade Winds, which cited unnamed "market sources" for its reporting. The seller was identified as Metrostar, a private shipping company based in Athens.

Other rumors, however, put the number of vessels at between six and eight. One shipping analyst said that a deal would probably get done, but the number of ships and the eventual price tag hadn't likely been determined yet.

Others greeted the rumors with more skepticism, saying they involved "more smoke than fire." The reported purchase price of the vessels would exceed General Maritime's market cap, which stands at a little more than $400 million.

To pay for the ships, General Maritime would likely need to raise funds by issuing equity, the report said.

General Maritime officials weren't immediately available for comment.

The company, more commonly known as Genmar, has made it known for some time that it's been looking to expand its fleet. Just last week, at a meeting with investors and analysts, company executives indicated that they were in the market for new vessels.

Genmar's present fleet stands at 31 ships, including three VLCCs.

Shares of General Maritime, run by shipping magnate Peter Georgiopoulos, who also founded Genco Shipping & Trading (GMR) and Baltic Trading (BALT), were changing hands Wednesday afternoon at $6.94, up 22 cents, or 2.2%.

-- Written by Scott Eden in New York

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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.

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