Greek ship owner and operator Top Ships has taken delivery of Julius Caesar, a scrubber-fitted 300,000 dwt very large crude carrier (VLCC), and reached several deals to finance its newbuilding program.
The newbuild was constructed at the South Korean shipyard Hyundai Heavy Industries (HHI).
The vessel has commenced its previously announced time charter employment with an undisclosed oil trader for three years with two yearly extensions at the charterer’s option. The revenue backlog expected to be generated by this fixture, assuming all options are exercised, is about $68.8 million.
Top Ships has also entered into an agreement to sell to unaffiliated third parties its two medium-range (MR) product tankers Eco Los Angeles and Eco City of Angels.
The vessel sales are subject to customary closing conditions and are anticipated to be concluded during the first quarter of 2022.
Depending on when the closing of the sales take place, the company estimates net proceeds after debt repayment of about $17.5 million and intends to use these funds towards its current newbuilding program.
Financing of newbuilds
In relation to the delivery of M/T Julius Caesar, Top Ships drew down $54 million from its secured credit facility — in the form of a sale and leaseback transaction — with an international financier entered into in November 2021, and has bareboat chartered back the vessel for a period of eight years.
As part of this transaction, the company has continuous options to buy back the vessels at purchase prices stipulated in the bareboat agreements.
The company has in place a facility with the same financier with substantially similar terms for the M/T Legio X Equestris which is expected to be delivered during the 1st quarter of 2022.
What is more, Top Ships has entered into a non-binding term sheet with a major international financier for up to $48.4 million for the financing, in the form of sale and leaseback, of the newbuilding vessel M/T Eco Oceano CA, subject to credit committee approval.
Subject to the approval of the term sheet relating to the financing of the M/T Eco Oceano CA, in combination with the unsecured financing and the sale of Series F preferred shares, the company’s remaining newbuilding program, consisting of the VLCC vessel M/T Legio X Equestris and the Suezmax vessel M/T Eco Oceano CA, will be fully funded.
Furthermore, Top Ships has entered into an unsecured credit facility for up to $20 million with an affiliate of its CEO in order to finance part of the shipbuilding cost of the two VLCCs. To date, $9 million has been drawn down.
In January 2022, the company entered into a stock purchase agreement with an affiliate of its CEO for the sale of up to 7,560,759 newly-issued Series F non-convertible perpetual preferred shares, par value $0.01, to the buyer, in exchange for the assumption by the buyer of an amount of $48.0 million of shipbuilding costs for its newbuilding vessels M/T Eco Oceano CA, M/T Julius Caesar and M/T Legio X Equestris, and settlement of the company’s remaining payment obligations relating to the acquisition on September 8, 2021 of an additional 65% ownership interest in the newbuilding contracts for its 2 VLCCs, in an amount of up to $27.6 million.
Incorporated in the Republic of the Marshall Islands, Top Ships owns twelve fuel-efficient ECO tankers focusing on the transportation of petroleum products and bulk liquid chemicals.