SFL announces acquisition of eight Capesize dry-bulk carriers from Golden Ocean
Ship Finance International Limited (NYSE: SFL) ("Ship Finance" or the "Company") has entered into the agreement to acquire eight Capesize dry-bulk carriers from subsidiaries of Golden Ocean Group Limited ("Golden Ocean"), the ship financing company said Tuesday in a press release.
The vessels are named Golden Beijing, Golden Zhoushan, Golden Magnum, Battersea, Belgravia, Golden Zheijang, Golden Future and KSL China and were built in Korea and China between 2009 and 2013. The total acquisition price will be $272 million, or $34 million on average per vessel. The vessels are expected to be delivered to Ship Finance within July 2015, subject to customary closing conditions.
The vessels will be chartered on a time-charter basis to a subsidiary of Golden Ocean for a period of 10 years. The daily base charter rate will be $17,600 during the first seven years, and $14,900 thereafter. In addition, there will be a 33% profit share for revenues above the base rate, calculated and paid on a quarterly basis.
SFL's charter backlog will increase by nearly $500 million and aggregate annual EBITDA contribution from the vessels, excluding profit share, is estimated to more than $30 million on average during the first seven years of the charter. Golden Ocean will have a purchase option after year 10, and if such option is not exercised, Ship Finance will have the option to extend the charters by three years.
The Company is in the process of arranging bank financing for the transaction, and we expect a financing amount of approximately $22 million per vessel, or approximately $176 million in total. Similar to most of our other financing arrangements, we expect to provide only a limited corporate guarantee for the financing.
Golden Ocean is a leading international dry-bulk shipping company, mainly operating in the Capesize and Panamax market segments. Golden Ocean is listed in New York and Oslo with the ticker "GOGL", and has a market capitalization of approximately $1 billion.
Ship Finance is a major ship owning company listed on the New York Stock Exchange (NYSE: SFL). Including the new acquisitions, the Company will have a fleet of 72 vessels, including 19 crude oil tankers (VLCC and Suezmax), two chemical tankers, 22 dry-bulk carriers (including 8 acquisitions), 17 container vessels, two car carriers, six offshore supply vessels, two jack-up drilling rigs and two ultra-deepwater semi-submersible drilling rigs. The fleet is one of the largest in the world and most of the vessels are employed on long-term charters.
