Press release from Ship Finance International Limited, November 9, 2010
Ship Finance International Limited (NYSE:SFL) (“Ship Finance” or the “Company”), today announced that it has agreed to acquire two additional newbuilding 57,000dwt Supramax bulk carriers for a total purchase price of approximately $61 million.
The vessels will be chartered to an investment-grade, Asia-based logistics company with which we have previously agreed to charter three similar Supramax bulk carriers. The new time charters have a tenor of 10 years with an average daily net charter rate of approximately $16,500 net per vessel. Expected delivery from the shipyard in China is scheduled for the second and third quarters of 2011. Financing has not yet been finalized, but we have received indications from banks for 80% of the purchase price.
The Company also announced that Golden Ocean Group Limited (“Golden Ocean”) has exercised a purchase option for the 1997-built Panamax bulk carrier Golden Shadow in combination with a sale of the vessel to an unrelated third party. Ship Finance acquired the vessel from Golden Ocean in 2006 in combination with a 10-year bareboat charter back, and as part of that transaction Golden Ocean was also granted certain fixed-price purchase options. The vessel sale is expected to be concluded in December 2010, with a sale price of approximately $21.5 million pursuant to the option agreement. Net cash proceeds to the Company will be approximately $4.5 million after prepayment of related financing.
Ole B. Hjertaker, CEO of Ship Finance Management AS, said in a comment: “We are very pleased to expand our long-term relationship with a large investment-grade industrial player, and it demonstrates our ambition to continue building and renewing our fleet and charter backlog with modern assets and high-quality counterparts. Including this new transaction, our aggregate charter backlog now stands at approximately $6.8 billion with a weighted average term of approximately 12 years.”
November 9, 2010
The Board of Directors
Ship Finance International Limited
Ole B. Hjertaker: Chief Executive Officer, Ship Finance Management AS
+47 23114011 / +47 90141243
Magnus T. Valeberg: Vice President, Ship Finance Management AS
+47 23114012 / +47 93440960
About Ship Finance
Ship Finance is a major ship owning company listed on the New York Stock Exchange (NYSE: SFL). Including newbuildings, the Company has a fleet of 71 vessels, including 30 crude oil tankers (VLCC and Suezmax), two chemical tankers, eight oil/bulk/ore vessels, 12 dry bulk carriers, nine container vessels, six offshore supply vessels, one jack-up drilling rig and three ultra-deepwater drilling units. The fleet is one of the largest in the world and most of the vessels are employed on long-term charters. The Company has declared a cash dividend for 26 consecutive quarters.
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 worldwide 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.