Euroseas Buys Two 4,250 TEU Container Ships for $37M

Container ship operator Euroseas said Tuesday it had agreed to buy  M/V Seaspan Manila and M/V Seaspan Melbourne intermediate size container vessels with a capacity of 4,250 TEU each, built in 2007 and 2005, respectively.

The vessels are being acquired for a combined price of $37 million. Euroseas will also assume the existing charter arrangements of the vessels. Both acquisitions will be initially financed with the company’s own funds.

Aristides Pittas, Chairman and CEO of Euroseas said:"We are pleased to announce the acquisition of M/V Seaspan Manila and M/V Seaspan Melbourne, two intermediate containerships built in 2007 and 2005, respectively, along with their existing approximately two years and three quarters long charters. These charters are expected to contribute in excess of about $20 million of EBITDA, bringing the cost basis of the vessels to scrap price levels by the end of the charters while providing a significant contribution to our profitability. 

"Furthermore, depending on the market after the end of the charters in early 2025, we may enjoy significant additional upside if the containership markets are even just at historically average levels. As we have stated in the past, our fleet growth strategy is focused on acquisitions with such a low-risk profile alongside our newbuilding program. 

M/V Seaspan Manila is expected to be delivered to Euroseas in July 2022 and has a charter contract until February 2025 at a rate which is $20,250 per day until April 2024 and, subsequently, based on the CONTEX index with a floor of $13,000 per day and a ceiling of $21,000 per day until the end of the charter period.

M/V Seaspan Melbourne is expected to be delivered to the company in June 2022 and has a charter contract until March 2025 at a rate of $19,000 per day. 

Following the delivery of the two vessels, Euroseas will have a fleet of eighteen containerships on the water and a newbuilding program of seven feeder containerships which are expected to be completed between the first quarter of 2023 and the second quarter of 2024.

Back in March, Euroseas signed a contract for the construction of three 1,800 TEU feeder containerships from Hyundai Mipo Dockyard Co. in South Korea.