SFL Corporation Ltd. announced that it has agreed to acquire two 14,000 TEU container vessels in combination with charters to a leading container line.
The vessels are modern eco-design built in 2013 and 2014 with approximately 14,000 TEU carrying capacity, similar to four vessels in our fleet today. The Company expects to take delivery of the new vessels in the third quarter and the purchase price is confidential. SFL has already received financing indications at attractive terms, and the balance will be funded by cash at hand.
The new vessels are employed on time charters until 2023 and 2024, respectively, and will be available for new charter opportunities thereafter. We expect to initiate discussions for new charters well in advance of expiry of the existing charters. The EBITDA contribution from the two vessels is approximately $29 million per year, until expiry of existing charters.
At the beginning of 2018, SFL agreed to lease finance a fleet of 18 vintage feeder container vessels between 1,100-4,400 TEU to a subsidiary of Mediterranean Shipping Company S.A. (“MSC”). The vessels are now 25 years old on average, and MSC will exercise repurchase options for these vessels in the third quarter.
Net cash proceeds after repayment of associated debt is estimated to approximately $40 million, and will be reinvested in new assets, including the two 14,000 TEU container vessels.
Ole B. Hjertaker, CEO of SFL Management AS, said in a comment: “We are excited to add these 14,000 TEU container vessels to our fleet. 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.
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 ESG strategy.”
Source: Ship Finance International