d’Amico Tankers Signs Sale and Leaseback Deals for New Tanker
The marine transportation company operating in the product tanker market d’Amico International Shipping (DIS) has secured a first in the Japanese market, signing an operating lease transaction for one of its LR1 newbuildings.
d’Amico Tankers D.A.C. (Ireland), the subsidiary of DIS, has signed a memorandum of agreement and bareboat charter contract for its newbuilding LR1 vessel, said a release.
Under the deal, the company agreed a sale and leaseback of the 75,000 dwt MT Cielo di Houston, currently under construction at South Korea’s Hyundai Mipo Dockyard.
The vessel, which is expected to join the fleet in January 2019, was sold for a consideration of USD 38.6 million, allowing d’Amico Tankers to generate around USD 10.2 million in cash from the transaction.
Thistransaction allows d’Amico Tankersto generate at the Vessel’s delivery around US$ 10.2 million in cash, net of commissions and additional costs, relative to financing the Vessel though the previously committed loan facility, contributing to the liquidity required to complete DIS’ fleetrenewal programand allowing the Company to benefit from the anticipated market recovery.
In addition, through this transaction d’Amico Tankers will maintain full control of the Vessel, since a 10.2-year bareboat charter agreement was also concluded with the buyer. Furthermore, d’Amico Tankers has the option to repurchase the Vessel, after approximately 5 years and after approximately 7 years of the charter period, at a competitive cost of funds.
As of today, DIS’ fleet comprises 48.5 double-hulled product tankers (MR, Handysize and LR1) with an average age of about 6.9 years (of which 24 owned, 17.5 chartered-in and 7 bareboat chartered. DIS has also 4 vessels in commercial management).
Currently, d’Amico Tankers has also shipbuilding contracts with Hyundai Mipo Dockyard Co. Ltd., for the construction of 2 LR1s (Long Range) product tankers expected to be delivered in Q1 2019.
Paolo d’Amico, Chairman of d’Amico International Shipping, stated: “I am glad to announce the conclusion of this transaction with a large Japanese financial institution, which will generate net cash proceeds of approximately US$ 10.2 million for DIS, relative to financing the vessel through the previously committed bank loan."
Paolo added: "This is our first JOLCO (Japanese Operating Lease with Call Option) transaction; it is a pioneering deal for a non-Japanese ship-owner, providing us with a new source of capital with enhanced economics relative to conventional Japanese sale-leasebacks.”