Norwegian shipowner MPC Container Ships (MPCC) has finalized the acquisition of five eco-design vessels.
With a total purchase price of $136.4 million, these acquisitions come with existing charter contracts from top-tier counterparties, which the company expects to solidify its revenue-generating capabilities.
“The inclusion of five young, eco-design vessels enhances the overall composition of our fleet and will increase our earnings and distribution capacity in 2023 and onwards,” said Constantin Baack , CEO of MPCC.
“Moving forward, our portfolio optimization strategy will remain centered around upgrading our existing vessels, acquiring modern eco tonnage as well as investing in newbuildings with premium earnings capabilities and lower emissions.”
The newly acquired vessels are 30% more efficient than conventional designs and are among the top 25% of all vessels in their segment, according to MPCC. They have an average age of 4.6 years and will add approximately 9,250 TEU to the existing fleet. Following the acquisition, MPCC’s fleet will comprise of 70 vessels, including four newbuildings, with an aggregate capacity of 153,294 TEU, excl. AS Emma.
MPCC has entered into an agreement on the sale of vessel AS Emma (4,300 TEU), for a price of $22 million with handover scheduled for November 2023.
Under the existing charters, the newly acquired vessels are projected to generate EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) between $30-41 million, depending on the vessels’ redelivery dates.
In conjunction with the acquisition, MPCC has secured favorable financing arrangements. The company has signed a term sheet with a European bank, obtaining a $50 million senior secured facility to support the transaction. Furthermore, MPCC has secured lease financing of $75 million from Bank of Communications (Hong Kong) Limited (BoComm), which is backed by 12 previously unencumbered vessels.
Notably, the financing structure of the acquisition has been designed to maintain a conservative leverage ratio. Based on pro-forma figures as of March 31, 2023, the company’s leverage ratio will increase from 15.2% to approximately 25%. Importantly, MPCC will maintain a low financial leverage and high financial flexibility, with 22 vessels remaining unencumbered on the balance sheet.