Investment in 8 chemical tankers with 15 year charters


01 Apr 2015
Ocean Yield ASA has agreed to acquire eight newbuilding chemical tankers for a total consideration of USD 306.8 million in combination with 15-year "hell and high" bareboat charters to Navig8 Chemical Tankers Inc.("Navig8 Chemical Tankers"). The first four vessels, being 37,000 dwt IMO II chemical carriers built by Hyundai Mipo Dockyard, Korea, are scheduled for delivery in Q2 and Q3 2015. The last four vessels, being 49,000 dwt IMO II chemical carriers built by STX Korea, are scheduled for delivery in Q1-Q3 2016. The transaction will be funded by a fully underwritten bank financing of about 69 % of the gross purchase price, a seller's credit of about 10% and the remaining amount with other debt and existing cash. Navig8 Chemical Tankers will have certain options to acquire the vessels during the charter period, with the first option exercisable after five years. Furthermore Ocean Yield will provide Navig8 Chemical Tankers with a pre-delivery loan matching the remaining yard instalments for the STX vessels. Navig8 Chemical Tankers was established in 2013 as a joint venture by Oaktree and Navig8 Group. Following Navig8 Chemical Tankers' registration on the N-OTC list last year, Oaktree and Navig8 Group continue to hold the majority of shares in Navig8 Chemical Tankers. Navig8 Chemical Tankers has a fleet of 32 vessels, of which 27 newbuilding chemical tankers under construction will be delivered over the next two and a half years, offering a complementary mix of coated and stainless steel vessels that captures the full range of chemical cargoes in the sector. Commercial management of the Navig8 Chemical Tankers' vessels is done by the Navig8 Group, which manages 15 shipping pools in four shipping segments and has 306 vessels under management (including commitments). Ocean Yield ASA's Chief Executive Officer Lars Solbakken said in a comment: "We are pleased to announce the investment in 8 newbuilding chemical tankers as it allows us to further diversify our portfolio of vessels 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 oil-service and industrial shipping. The company focuses on modern assets with long-term charters to solid counterparties. 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 growing quarterly dividends to its shareholders. This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.