SFL Corporation Ltd has announced its agreement to acquire two New Panamax container ships in combination with charters to MSC.
The vessels, built in 2013 and 2014 with approximately 14,000TEU carrying capacity, have modern eco-design, similar to four SFL existing ships, according to a statement.
The company expects to adopt the couple of container ships until the third quarter of the year, while it has already received financing indications, and the balance will be funded by cash at hand.
SFL has not disclosed the purchase price yet.
The boxships are employed on time charters until 2023 and 2024, respectively, where they will be available for new charter opportunities.
“Cash flow is immediate, and we believe the timing for when the vessels will be open for new charters in 2023/2024 could prove to be very attractive”, said CEO of SFL Management AS, Ole B. Hjertaker.
“We expect to initiate discussions for new charters well in advance of expiry of the existing charters. The Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) contribution from the two vessels is approximately US$29 million per year, until expiry of existing charters,” noted the company.
At the beginning of 2018, SFL agreed to lease finance a fleet of 18 vintage feeder container vessels with a capacity of 1,100 to 4,400 TEU, to a subsidiary of MSC.
The vessels are now 25 years old on average, and MSC will exercise repurchase options for them in the third quarter.
It is estimated that net cash proceeds after repayment of associated debt will be approximately US$40 million, and will be reinvested in new assets, including the two aforementioned 14,000TEU container vessels.
“The acquisition of these modern eco-design containerships coincides with the disposal of older less efficient vessels and demonstrates our commitment to further improve our carbon footprint pursuant to our environmental, social, and governance (ESG) strategy,” stated Hjertaker.
