Press release from Ship Finance International Limited, March 14, 2008
Ship Finance International Limited (NYSE:SFL) (“Ship Finance” or the “Company”), today announced that it has agreed to acquire two 17,000 dwt chemical tankers newbuildings based on a total purchase price of $60.2 million, or $30.1 million per vessel.
The vessels are expected to be delivered from the shipyard in March and August 2008, and will then commence a 10 year bareboat charter to Bryggen Shipping & Trading AS (“Bryggen” or the “Charterer”), a Norwegian-based privately owned chemical tanker company. The agreed bareboat charter rate will be $8,000 per vessel per day, and at the end of the charter period, Bryggen is granted a fixed price purchase option of $20 million per vessel.
Bryggen has sub-chartered the vessels for 10 years on a bareboat charter to Sinochem International (holding) Co. Ltd. (“Sinochem”), a leading China-based chemical logistics provider, listed in Shanghai.
The transaction will be financed with a 10-year senior loan facility of USD 49 mill. and an equity contribution of USD 11.2 mill. The interest rate has been swapped to fixed rate for the entire loan period and the average annual net cash contribution after estimated interest expense and debt repayment is estimated to approximately $1.4 mill.
This transaction is another verification of Ship Finance’s strategy to diversify both the asset base and the customer portfolio with new profitable transactions. These vessels are the first chemical tankers in our portfolio, and we anticipate further growth opportunities in this segment.
March 14, 2008
The Board of Directors
Ship Finance International Limited
Lars Solbakken: Chief Executive Officer, Ship Finance Management AS
+47 2311 4006 / +47 9119 8844
Ole B. Hjertaker: Chief Financial Officer, Ship Finance Management AS
+47 2311 4011 / +47 9014 1243
About Ship Finance
Ship Finance is a major ship owning company listed on the New York Stock Exchange (NYSE: SFL). Including newbuildings and announced acquisitions/disposals, Ship Finance has a fleet consisting of 72 vessels, including 35 crude oil tankers (VLCC and Suezmax), 2 chemical tankers, 8 oil/bulk/ore vessels, 13 container vessels, 3 dry bulk carriers, 2 jack-up drilling rigs, 6 offshore supply vessels and 3 seismic vessels. The fleet is one of the largest in the world with a total cargo capacity of more than 11 million dwt. and most of the vessels are employed on long term charters.
More information can be found on the Company’s website: www.shipfinance.org
Cautionary Statement Regarding Forward Looking Statements
This press release may contain forward looking statements. These statements are based upon various assumptions, many of which are based, in turn, upon further assumptions, including Ship Finance management’s examination of historical operating trends. Although Ship Finance believes that these assumptions were reasonable when made, because assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond its control, Ship Finance cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions.
Important factors that, in the Company’s view, could cause actual results to differ materially from those discussed in this presentation include the strength of world economies and currencies, general market conditions including fluctuations in charter hire rates and vessel values, changes in demand in the tanker market as a result of changes in OPEC’s petroleum production levels and world wide oil consumption and storage, changes in the Company’s operating expenses including bunker prices, dry-docking and insurance costs, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, and other important factors described from time to time in the reports filed by the Company with the United States Securities and Exchange Commission.