Press release from Ship Finance International Limited, November 3, 2010
Ship Finance International Limited (NYSE:SFL) (“Ship Finance” or the “Company”), today announced new time-charters for the four remaining 34,000dwt Handysize bulk carriers under construction in China. The Company has agreed to charter the vessels to a large privately-owned Chinese industrial conglomerate at a net rate of approximately $14,000/day per vessel. The charter period is five years and expected delivery from the shipyard is currently between 3Q 2011 and 1Q 2012.
The Company has also secured bank financing for two of its recently announced 57,000dwt Supramax bulk carrier acquisitions. SFL Hudson was delivered to Ship Finance in October 2010 and SFL Yukon is expected to be delivered from the shipyard in December 2010. Both vessels are on long-term charters to an investment-grade Asia-based logistics company.
The new loan will be approximately $54 million, or 80% of the contract price of the vessels, and will have a tenor of eight years. Ship Finance will only provide corporate guarantees for a limited part of the outstanding loan amount. The equity contribution per vessel will be approximately $7 million, and the net cash flow after expected operating expenses, interest and loan amortization is projected to be on average approximately $1 million per year per vessel.
Following the above chartering agreements, Ship Finance has secured medium to long-term charters for all vessels under construction. To date all payments relating to newbuildings have been funded from the Company’s cash position and the Company is in dialogue with financing institutions for the long-term funding of the remaining vessels under construction.
November 3, 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 70 vessels, including 30 crude oil tankers (VLCC and Suezmax), two chemical tankers, eight oil/bulk/ore vessels, 11 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.