Danaos Corporation (NYSE: DAC) extended its shipbuilding contracts with China Shipbuilding Trading Company, Limited to include one more 8,530 TEU vessel, bringing the total number to five vessels. All five Post Panamax containerships will be built by the Shanghai Jiangnan Changxing Heavy Industry Company Limited
and are expected to be delivered to Danaos between August 2010 and February 2011. Danaos has also arranged for a large international liner company to charter all these vessels for 12 years each at accretive rates.
For the first full year of operation, this five vessel block addition to Danaos' fleet of containerships is expected to contribute approximately $65 million of EBITDA. For this purpose, EBITDA, a non-GAAP measure, shall mean net earnings before interest, un-drawn credit facility fees, taxes, depreciation and amortization of deferred dry-docking charges and financing fees.
According to schedule, Danaos also delivered back to its charterer, the APL Holland
, on August 3, 2007, as a result of the exercising of the purchase option APL had on this vessel. Furthermore, Danaos took delivery of the Hyundai Advance on August 20, 2007, the Hyundai Stride on September 5, 2007, and the new building YM Seatle on September 10, 2007.
"We believe our growth strategy has paid off," said Dr. Coustas, Chief Executive Officer of Danaos. "Danaos' strong balance sheet has made it possible to place new-building orders for which a charter may not be arranged concurrently, allowing us to explore a wider array of opportunities regarding vessel deployment at the proper time. In this context, further to the initial order of four containerships, we have been able to secure an order for an additional 8,530 TEU Post Panamax containership increasing the total number of vessels to be built by Shanghai Jiangnan Changxing Heavy Industry Company Limited to five. We have also just arranged 12 year charters at accretive rates with one of the largest liner companies in the world for all five of these vessels scheduled to be delivered to us in 2010 and the beginning of 2011. With this deal we have not only managed to increase our total fleet to 63 containerships, but also secure long term charters for all vessels of our contracted fleet. In conclusion, we have increased our contracted revenue to $5.2 billion."