Acquisition of 4 LR2 product tankers with 13 years charters
13 Jul 2015
Ocean Yield ASA has agreed to acquire four
newbuilding 115,000 dwt LR2 product tankers for a
total consideration of USD 198.1 million, in
combination with 13 years "hell and high water"
bareboat charters to Navig8 Product Tankers Inc.
("Navig8 Product Tankers"). The four vessels are
being built at Sungdong Shipbuilding & Marine
Engineering Co., Ltd, Korea, and are scheduled for
delivery in January, March, May and July 2016.
The vessels are being acquired for USD 49.5 million
each, which is equal to the original yard cost and
is about 20% below current market value. The
transaction will be funded by a committed bank
facility of USD 148 million, or USD 37 million per
vessel, a seller's credit of USD 10 million, or USD
2.5 million per vessel and the remaining amount with
existing cash. Navig8 Product Tankers will have
certain options to acquire the vessels during the
charter period, with the first option exercisable
after seven years. Furthermore, Ocean Yield will
provide Navig8 Product Tankers with an interest
bearing pre-delivery loan matching the remaining
yard instalments, which will be secured by
assignment of the shipbuilding contracts and the
refund guarantees.
Navig8 Product Tankers was established in 2013 by
the Navig8 Group together with several investment
funds as shareholders, and has a different ownership
structure than Navig8 Chemical Tankers Inc, where
Ocean Yield has entered into long term charters for
eight chemical tankers. Navig8 Product Tankers
focuses on new eco-efficient tonnage and has a
newbuilding program that comprises 27 vessels, of
which 15 LR2s and 12 LR1s, with deliveries expected
from September 2015 through 2016. Commercial
management is done by the Navig8 Group, which
manages 15 shipping pools in three shipping segments
and has 332 committed vessels under management.
Ocean Yield ASA's Chief Executive Officer Lars
Solbakken said in a comment: "We are pleased to
announce the investment in 4 newbuilding product
tankers as it allows us to continue to diversify our
portfolio and the transaction fits very well with
our strategy to invest in modern vessels with long
term charters. Due to our strong balance sheet the
transaction is done without raising any new equity
and the new investment will therefore have a very
positive effect on both earnings and dividend
capacity per share."
For further information, please contact:
Lars Solbakken, CEO of Ocean Yield ASA
Phone: +47 24 13 01 90
E-mail: lars.solbakken@oceanyield.no
Eirik Eide, CFO of Ocean Yield ASA
Phone: +47 24 13 01 91
E-mail: eirik.eide@oceanyield.no
About Ocean Yield:
Ocean Yield is a ship owning company with
investments within shipping and oil-service. The
company focuses on modern assets with long-term
charters. The company has a significant contract
backlog that offers visibility with respect to
future earnings and dividend capacity. Ocean Yield
has an ambition to pay attractive and increasing
quarterly dividends to its shareholders.
This information is subject of the disclosure
requirements pursuant to section 5-12 of the
Norwegian Securities Trading Act.