Ship Finance International Limited announced that it has closed the definitive agreements and related financing documents to acquire five newbuilding container vessels from third parties for a sum of approximately US$280 million and to place the vessels on long-term charters to Horizon Lines, LLC, a subsidiary of Horizon Lines Inc., which will guarantee the charters.
The five sister vessels are being built at Hyundai Mipo in Korea and are scheduled to be delivered over the course of a five-month period to wholly owned subsidiaries of Ship Finance commencing at the beginning of 2007. The vessels have a carrying capacity of 2,824 teus and are capable of a service speed of 23 knots.
The term of each bareboat charter will be 12 years with a 3-year renewal option on the part of Horizon Lines which will operate the vessels in its TP1 service from the US West Coast to Guam and Asia. The vessels will fly the United States flag.
Horizon Lines will have options to buy the vessels after 5, 8, 12 and 15 years.
Tor Olav Troeim, SFL’s Chairman, commented: “We are very pleased with this transaction. It expands our business in an interesting segment of shipping. It provides growth for our company and diversifies our fleet risk as well as the client portfolio. The project is financed with approximately 75% non recourse debt, and it gives our shareholders a very solid return on the equity invested.”
“We are delighted to work with Horizon Lines, a true market leader, as they expand their presence in the Pacific market and dynamically position themselves for further growth,” concluded Troeim.