OET Acquires ECO Suezmax Tanker Pair
Greek shipping company Okeanis Eco Tankers (OET) intends to exercise an option to acquire two ECO scrubber-fitted Suezmax tankers under construction at South Korean Hyundai Samho Heavy Industries.
Okeanis will spend almost $130m to buy the two 158,000 dwt scrubber-fitted vessels from its chief executive Ioannis Alafouzos' private company.
As Suezmax values have risen and newbuilding delivery timelines extended into 2021 in the period since its granting, the option is presently well in-the-money and accretive to NAV.
In addition, with the recent dramatic firming of the tanker spot and time charter markets and the availability of low cost, high LTV financing (discussed below), OET is highly confident that exercise of the option will require no new issuance of equity.
"Accordingly, OET is pleased to announce that its Board of Directors has resolved to exercise the option," said a press release.
OET has received firm indications for low cost, high LTV pre- and post-delivery financing from multiple large and reputable financial institutions.
Additionally, in connection with the option exercise, OET and Sponsor have agreed to extend the maturity of the USD 15 million revolving credit facility (which remains undrawn at the date hereof) from Glafki Marine Corp. (Glafki, an affiliate of the Sponsor) by six months, to December 2020.
Lastly, OET and Sponsor have agreed that repayment of ten percent of the Option Vessels’ total contract price settled between the Sponsor and the shipyard in April 2019 may be deferred, at OET’s sole discretion, to any date before the end of September 2021 with no interest, cost or penalty accruing on any outstanding amount during the period.
The Board of Directors believes that the increased financial flexibility resulting from these measures should obviate the need for an equity issuance even under unexpectedly negative market scenarios.
OET possesses among the youngest, highest quality, scrubber-fitted tanker fleets assembled specifically to benefit from the strength in freight rates and asset prices expected to result from the firming tanker market fundamentals and IMO 2020 regulations.
In line with its strategy and consistent with its Discount Control Mechanism, the Company intends to capitalize on such strength by returning resulting cash from operations and well-timed asset sales to shareholders in the most tax-efficient manner possible.
