Navig8, Ocean Yield in Chemical Tanker Deal
Norway’s Ocean Yield has bought eight chemical tanker newbuildings for $306.8m from Navig8 Chemical Tankers Inc, which will lease the vessels back on 15-year "hell and high" bareboat charters.
Navig8 Chemical Tankers has options to buy the vessels during the charter period, with the first option exercisable after five years.
The Oslo-listed ship-owner Ocean Yield will provide Navig8 Chemical Tankers with a pre-delivery loan matching the remaining yard installments for the STX vessels. The Norwegian company said the transaction will be funded by bank financing for 69% of the price, a seller’s credit for 10% and the rest with existing cash and other debt.
The first four vessels are 37,000-dwt IMO II chemical carriers, being built by Hyundai Mipo in South Korea, and are scheduled for delivery in Q2 and Q3 this year. STX Korea is building the other four vessels, which are 49,000-dwt IMO II chemical carriers, scheduled for delivery in Q1 to Q3, 2016.
Navig8 has also completed a private placement. Gross-proceeds are $ 65 million, which equates to 527 million. It shall issue 5,701,754 new ordinary shares at a subscription price of $ 11.40 per share.
Navig8 Chemical Tankers was established in 2013 as a joint venture by Oaktree and Navig8 Group.
Ocean Yield has secured fully underwritten bank financing for about 69% of the gross purchase price, plus a seller’s credit of about 10% and the remaining amount with other debt and existing cash.
Ocean Yield ASA's Chief Executive Officer Lars Solbakken said in a comment: "We are pleased to announce the investment in 8 newbuilding chemical tankers as it allows us to further diversify our portfolio of vessels and the transaction fits very well with our strategy to invest in modern vessels with long term charters. Due to our strong balance sheet the transaction is done without raising any new equity and the new investment will therefore have a very positive effect on both earnings and dividend capacity per share."
