Ship Finance International Limited (NYSE:SFL) (“Ship Finance” or the “Company”), today announced that it is has agreed to acquire two newbuilding Capesize dry bulk vessels from Golden Ocean Group Limited (“Golden Ocean” or the “Charterer”) based on a total delivered price of $160 million, or $80 million per vessel.
The vessels will have a cargo capacity of around 170,000 dwt each, and will be constructed by Daehan Shipbuilding Co. Ltd. in South Korea. Delivery from the shipyard is scheduled in 4Q 2008 and in 1Q 2009.
Upon delivery from the shipyard, the vessels will commence 15 year bareboat contracts to Golden Ocean, and the charter rate per vessel is agreed as follows:
Year 1-5: $27,450 per day
Year 6-10: $22,600 per day
Year 11-15: $19,750 per day
The Charterer has been granted fixed price purchase options for each of the vessels after 5, 10 and 15 years at $61 million, $44 million and $24 million, respectively. The charter contracts are on bareboat basis and Golden Ocean will therefore be responsible for all operating and maintenance costs during the charter period.
We expect to finance around 75% of the purchase price through a bank loan, and in case there are material differences between the bank financing terms and the financing assumptions agreed with Golden Ocean, the charter rate will be adjusted accordingly. Similar to all our recent acquisitions, the purchase of the vessels and corresponding financing will be in subsidiaries with only limited guarantee obligations from Ship Finance.
Golden Ocean has secured profitable sub-charters for the two vessels to a third party charterer. The vessels will have 5 year fixed employment and Golden Ocean will receive a net T/C-rate of around $36,800 per day per vessel in this period.
The transaction is in line with the Company’s strategy to diversify the asset base and customer portfolio. Including the dry bulk vessel acquired in 2006 and our 8 oil/bulk/ore (“OBO”) vessels, currently configured to carry dry bulk cargos only, Ship Finance will have 11 vessels on long-term charters in the dry bulk market.
Including newbuildings and adjusted for recently announced sales, the Company’s fleet will consist of 57 vessels, essentially all on medium to long term charters.
February 6, 2007
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