Empire Shipping Investor Teaser Document

Executive Summary

Empire Shipping

Overview

1

Compelling Market Opportunity

2

Exceptional Management

4

Appropriate Business Strategy

5

Financial Projections

7

Investment Structure and Terms

9

Proposed Timing and Process

11

Overview Empire Shipping (“Empire�) is a compelling investment opportunity allowing Novaar and its investment partners to capitalize on opportunities in the distressed global shipping industry.

With over $250 million in capital commitments, Empire will capitalize on the current market dislocation to build a company with a diversified fleet of young, intermediate-sized ships, which will generate attractive returns over a five to ten year horizon.

Empire is led by Novaar Capital Management SPC and Stamatis Molaris, a highly successful shipping executive.

1

Compelling Market Opportunity The global shipping industry

0%

has been ravaged by the

Shipping

Real Estate

Energy

Financials

Materials

Industrials

Aircraft Leasing

positioned operating entity.

-100% Utilities

investment in a uniquely

-80%

Transportation

make a well-timed, cyclical

S&P 500

investment opportunity to

-60%

Telecoms

market presents an interesting

Technology

world economy, the current

-40%

Cons. Disc.

critical to a well functioning

Health Care

However, as an industry

-20%

Consumer Staples

current economic crisis.

Last Twelve Months Price Performance as of June 30, 2009. Source: FactSet

2

Distressed Tanker Market The shipping industry consists of four primary markets: container, dry bulk, tanker and LNG. Asset values and charter rates in the tanker market are near 10-year lows – providing a timely buying opportunity. Additionally, the tanker market has stronger underlying demand fundamentals when compared

Suezmax Spot charter Rates & Vessel Values 120,000 100,000 80,000 60,000

to the other shipping segments, driven by long-term, global demand for oil,

40,000

increasing tonne mile demand and 20,000

Current

Q4, 2008

Q2, 2008

Q4, 2007

Q2, 2007

Q4, 2006

Q2, 2006

Q4, 2005

Q2, 2005

Q4, 2004

Q4, 2003

Q2, 2003

Q4, 2002

Q2, 2002

Q4, 2001

Q2, 2001

Q4, 2000

Q2, 2000

Q4, 1999

0

Q2, 2004

Spot Rates (150,000 dwt) - Left Axis 5-Yr Vessel Values (150,000 dwt) - Right Axis Adj. 10-Yr Vessel Values (150,000 dwt) - Right Axis

Q2, 1999

strong chartering counterparties.

Source: Clarkson’s

3

Exceptional Management Empire will be led by Stamatis Molaris, an experienced Greek shipping executive. Mr. Molaris was an initial founder of Quintana Maritime (NASDAQ: QMAR). Quintana was a dry bulk shipping concern founded in 2005. Quintana was sold to Excel Maritime in 2008 for a 3x return to Quintana investors. Prior to Quintana, Mr. Molaris was CFO of Stelmar Tankers, a product tanker specialist. Mr. Molaris was instrumental in growing the fleet from 5 product tankers to 42 product tankers, when it was sold to OSG in 2005 for a 4x return from the 2001 IPO price.

Novaar Capital Management SPC has developed the opportunity and will provide governance and strategic oversight in partnership with an experienced independent board.

Morgan Stanley, a leading global advisor in shipping, will act as financial advisor for the initial transaction. Norton Rose will act as outside legal counsel.

4

Appropriate Business Strategy Initial focus will be on opportunities in the tanker sector, with the potential to diversify into the dry bulk sector as the order-book and charter rates stabilize. Tanker and dry bulk markets have a low historical correlation of 0.2 – 0.3 since 2000.

Empire will purchase modern, high-quality, intermediate-sized vessels that are up to 10 years old , offering more flexible chartering opportunities, lower operating costs and better resale values. Empire’s extensive relationships with banks, brokers and other owners will facilitate effective sourcing of well-priced acquisitions.

The company will acquire ships with associated demand. Time charters will be staggered and include “floor pricing” and profit sharing arrangements to navigate current market conditions. The strategy creates cash flow visibility in the medium term and a spread of re-chartering risk.

The company will limit the use of debt in purchasing vessels.

Asset ownership and fleet management will be conducted in-house, thereby avoiding potential conflicts of interest and low-quality decisions associated with outsourcing strategies.

5

Appropriate Business Strategy Cont.

Empire Navigation, Inc. is an existing ship management company providing a full suite of required services. The team consists of experienced professionals with the ability to ramp capabilities rapidly, a history of cost effective ship-management and an outstanding safety and environmental record. Empire is certified for Compliance with the International Safety Management (ISM) Code by the American Bureau of Shipping.

Currently, Empire Navigation is managing four (4) product tankers owned by a U.S. institutional investor and is supervising the construction of four (4) Suezmax new-build tankers for delivery in 2011.

Empire Navigation will seek to establish a local presence to facilitate vessel management opportunities in the Gulf Cooperation Council.

6

Financial Projections Empire intends to build a fleet of 8+ vessels by 2011. In accordance with its stated business strategy, the Company will acquire younger, efficient vessels. The projections assume nine (9) Suezmax vessels are purchased for an average cost of $70 million per vessel and associated charter contracts which yield a base value of $47,000 per day.

In addition to opportunistic purchases, the Company will enter into a purchase option with Alma Maritime for four (4) Suezmax vessels (2011 delivery) and their associated 7 year charter contracts with Sanko Steamship Co., Ltd (Japan).

Operating expenses are assumed at $6,000 per day per vessel; while vessel management expenses are fixed at $750 p.d. and overhead is capped to approximately $1.5 million per annum. Based on the underlying projections, a successful exit in 2014 would generate a fully-diluted return of greater than 2.5x invested capital.

7

Financial Projections Figures in USD ‘000

2009

2010

2011

2012

2013

2014

2

9

9

9

9

9

Revenues

1,258

85,725

129,178

129,532

129,178

129,178

Operating Expenses Management Fees G&A

(192) (24) (375)

(13,472) (1,715) (1,545)

(20,910) (2,244) (1,591)

(21,597) (2,244) (1,639)

(22,184) (2,464) (1,688)

(22,849) (2,538) (1,739)

EBITDA

667

68,993

104,432

104,052

102,842

102,052

Depreciation Interest Expense / Finance Fees

(225) (14,630)

(15,304) (16,081)

(23,062) (16,450)

(23,125) (15,254)

(23,062) (13,976)

(23,062) (12,738)

Net Income

(14,188)

37,608

64,921

65,673

65,804

66,253

Cash Balance Vessel Value (Book)

150 211,275

41,959 618,971

107,734 595,910

174,324 572,785

240,982 549,723

308,089 526,662

Total Debt Outstanding Shareholder's Equity

105,750 105,676

306,146 354,783

283,939 419,704

261,731 485,377

239,524 551,182

217,316 617,434

Number of Vessels Owned Income Statement Snapshot

Balance Sheet Snapshot

8

Investment Structure and Terms Proposed Structure and Terms: Empire Shipping will be comprised of three primary entities: Empire Acquisition Company (for asset ownership), Empire Navigation (for internal and third party vessel management services) and Empire Saudi Arabia LLC (for management services for GCC charterers). Novaar and participating investors will invest via Novaar ShipCo, a special purpose Cayman Islands investment vehicle.

Investors will participate through the purchase of Convertible Preferred Shares in Empire Acquisition Company. These securities will have first priority on residual company cash flows and will be convertible into 70% of the common shares (Common Shares A). If the company needs additional capital, Participating Investors will have a right of first refusal on a follow-on $200 million equity commitment. Additionally, investors will have a minority equity investment in Empire Navigation, which will be purchased at book value.

Novaar Capital Management, Empire Management and select advisors will own a subordinated stake in the company through Common Shares B, representing 30% of the common shares.

9

Investment Structure Empire Navigation Ltd. off shore entity provides ship management functions

Novaar ShipCo Cayman Based Investment Vehicle

Novaar Capital Management Cayman SPC Investment Mananger

Empire Saudi Arabia LLC Local ship management

Delos Investement Management

Empire Acquisition Company off shore entity vessel ownership vehicle

Alma Maritime owns 4 new build ships & chartering contracts

denotes management agreements denotes ownership and capital flows

10

Proposed Timing and Process Novaar has entered in to a Memorandum of Understanding with Empire Navigation, providing exclusivity for the investment opportunity.

Novaar has currently engaged in detailed due diligence and expects to close the transaction in November/December of 2009.

11

www.novaar.com A Dubai International Financial Centre Registered Company