D’Amico: Sale and Leaseback of New 75,000 dwt LR1 Product Tanker

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  • D’Amico International Shipping will be chartering the MT Cielo di Houston for sale and leaseback.
  • This vessel is under construction at Hyundai-Mipo and sold at a consideration of US$ 38.6 million.
  • At the time of delivery around US$ 10.2 million in cash is expected to be generated.
  • D’Amico Tankers will maintain full control and may repurchase the vessel, after approximately 5-7 years of the charter period.

D’Amico International Shipping S.A. has signed a memorandum of agreement and bareboat charter contract for the sale and leaseback of the MT Cielo di Houston, a 75,000 dwt LR1 product tanker vessel, says a press release.

What is in the contract?

The vessel is currently under construction at Hyundai-Mipo, South Korea (at their Vinashin facility in Vietnam) and expected to be delivered in January 2019. The international marine transportation company operating in the product tanker market sold this vessel for a consideration of US$ 38.6 million.

Expected Revenue

This transaction allows d’Amico Tankers to generate at the vessel’s delivery around US$ 10.2 million in cash, net of commissions and additional costs, relative to financing the vessel through the previously committed loan facility, contributing to the liquidity required to complete DIS’ fleet renewal program and allowing the Company to benefit from the anticipated market recovery.

Choice to Repurchase

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.

“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.”, said the company chairman Paolo D’Amico.

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Source: The Medi Telegraph

 

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