(i) the purchase and time charter of two secondhand vessels
(ii) time charter extensions for six existing vessels and
(iii) the disposal of two older vessels which the Company agreed to sell for demolition.
In addition, the Company has finalized the financing arrangements for its new-building Program.
(A) Vessel Acquisitions with Time Charters in Place
The Company has reached an agreement to acquire -
1) the 6,724 TEU, 2003-built container ship MSC Viviana (to be renamed MSC Messinia) for a purchase price of $60 million. The vessel is expected to be delivered by the end of October 2011 and immediately upon delivery it will commence a time charter with MSC for a duration of approximately 10 years, at a daily rate of $29,000; and
2) subject to final documentation, the 4,132 TEU, 2002-built MSC Ulsan for a purchase price of $30 million. The vessel is expected to be delivered within the first quarter of 2012 and immediately upon delivery it will commence a time charter with MSC for a duration of approximately 63 months, at a daily rate of $16,500.
Both acquisitions will be financed by cash from operations and the use of a committed credit line.
(B) Time Charter Extensions
The Company has entered into agreements to extend the time charters for the following 6 existing vessels:
1) The time charter agreement with MSC for the 1991-built, 2,023 TEU c/v MSC Sierra II, has been extended as from July 1, 2012, for a further period of approximately 2 years, at a daily rate of $11,500.
2) The time charter agreement with MSC for the 1991-built, 2,023 TEU c/v MSC Namibia II, has been extended as from August 2, 2012, for a further period of approximately two years, at a daily rate of $11,500.
3) The time charter agreement with MSC for the 1992-built, 2,024 TEU c/v MSC Sudan II, has been extended as from July 27, 2012, for a further period of approximately 2 years, at a daily rate of $11,500.
4) The time charter agreement with MSC for the 1991-built, 2,020 TEU c/v MSC Pylos, has been extended as from February 28, 2012, for a further period of approximately 2 years, at a daily rate of $11,500.
5) The time charter agreement with MSC for the 1986-built, 2,633 TEU c/v MSC Challenger, has been extended as from October 13, 2012, for a further period until approximately August 30, 2015, at a daily rate of $10,000.
6) The time charter agreement with MSC for the 1984-built, 3,584 TEU c/v MSC Austria, has been extended as from December 1, 2012, for a further period until approximately October 1, 2018, at a minimum daily rate of $13,500 plus 50% of the amount by which the market rate exceeds the minimum daily rate. The market rate is to be determined annually during the extension period, based on the Hamburg Contex 3500 TEU index.
(C) Vessel Disposals
The Company has agreed to sell the 1978-built vessels MSC Tuscany and MSC Fado for demolition, with delivery due to the buyers by mid-December 2011, for a total sale price of approximately $8.8 million.
(D) Financing Arrangements for New build Vessels
The Company has finalized the financing arrangements for three out of the five new build vessels ordered from Sungdong Shipbuilding & Marine Engineering Co., Ltd. of
Korea, with a consortium of European and financial
The Company has also accepted a firm offer from a consortium of European and Asian banks, which is subject to documentation, but not subject to further credit approval, for the financing of the remaining two new build vessels.
All 5 new build container ships, each of approximately 8,800 TEU capacity, have been time chartered to members of the Evergreen Group and are expected to be delivered between the 1st and the 3rd quarters of 2013.
Gregory Zikos, Chief Financial Officer of the Company, said: "We are pleased to announce the agreement to acquire 2 more 2ndhand vessels backed by attractive time charters to MSC. Concurrently, we have reached agreements to extend on a forward basis the time charters for 6 existing vessels at favorable rates, while at the same time we are disposing of the oldest vessels in our fleet at a very attractive price. We expect to realize capital gains of approximately $5 million from these disposals.
"In total, these latest chartering agreements amount to approximately $207 million of contracted revenues with a TEU-weighted average duration of more than 5 years. The recent fixtures on a forward basis have minimized our re-chartering risk, and further enhanced our financial stability.
"With regards to financing our contracted new builds, we have finalized the loan agreement for three of our new build vessels with some of the most respected European and
institutions. We have also accepted a commitment letter from leading European
and Asian banks to fund the remaining 2 new build vessels. When completed,
these financing arrangements are expected to provide all necessary debt
financing for all 10 new build orders we have placed since going public in
November 2010. US
"The most recent financing arrangements, discussed above, provide for 80% leverage, enhancing our equity returns.
"Concurrently, we take advantage of the current low interest rate environment by hedging, on a forward basis, our interest rate obligations, thus increasing our cash flow visibility."
For more information, contact:
Zephyrou Street & Syngrou Avenue, Athens, Greece
Phone: + 30-210-9490050 +30 210-949-0000
Fax: + 30-210-9406454
Source: Maritime Global Net. 20 September 2011