MPC Container Ships ASA secures new financing facility, agrees on sale of six vessels and provides update on charter fixtures
MPC Container Ships ASA has announced the following measures that will increase the Company’s balance sheet flexibility in order to execute on the Group’s plan to commence returning capital to investors. These changes are consistent with the Company’s guidance in previous quarters:
New bank facility of USD 180 million with HCOB at LIBOR + 335 bps
More than 30 unencumbered vessels post-closing
Sale of six vessels between 1,000 and 1,500 TEU agreed for in total USD 135 million
Seven additional multi-year charter fixtures concluded in historically strong charter market
EBITDA backlog from 1 July 2021 onwards currently above USD 700 million
The Company has agreed a USD 180 million five-year senior secured credit facility with Hamburg Commercial Bank at attractive terms. The Facility consists of a USD 130 million term loan and a revolving credit facility of USD 50 million.
In order to optimize the fleet composition take advantage of historically high container ship asset prices, the Group has agreed to sell six smaller vessels with an average size of 1,200 TEU for a total of USD 135 million, which implies a significant premium to the current MPCC share price. MPCC's total fleet will consist of 68 vessels once the six vessels have been handed over to their new owners.
During Q4 2021, the Company intends to use the Facility, together with parts of the proceeds from the agreed vessel sales to refinance the existing DNB acquisition financing, as well as the outstanding USD 204 million bond financing. As a consequence, the previous acquisition financing with DNB and the outstanding senior secured bonds will be repaid in full and a significant number of vessels owned by the Company will subsequently be unencumbered.
Subsequent to the Q2 reporting on 19 August, the Company has fixed an additional seven vessels with long periods and attractive rates. The EBITDA backlog has subsequently increased to above USD 700 million, demonstrating a continuously strong charter market.
Once executed, the new financing structure of the Group will allow for high flexibility in capital allocation and a solid foundation for implementing a sustainable dividend policy. Following the sequencing of repayment and successful handover of the sold vessels in Q4 2021, the Company expects to enter a new era of returning capital to shareholders as of Q1 2022 by distributing up to 75% of net profit by way of dividends and/or share buybacks.
About MPC Container Ships ASA:
MPC Container Ships ASA is a leading container tonnage provider with a focus on the feeder segment below 5,000 TEU. Its main activity is to own and operate a portfolio of container ships serving intra-regional trade lanes on fixed-rate charters.