MPC Container Ships ASA entered into a share purchase agreement to acquire Songa Container AS for an aggregate purchase price of USD 210.25 million on a debt and cash-free basis, says a press release published on PRNewswire.
Songa’s fleet
With this latest acquisition, Songa’s fleet will comprise 11 container vessels with an average size of 2,250 TEU and an average age of 11.9 years (the “Songa fleet”) under the assumption of Songa having completed the sale of its vessels Songa Haydn, City of Hong Kong, and FS Ipanema.
Scrubber fitted
It was noted that nine of the acquired vessels are fitted with scrubbers while three are equipped with the highest ice-class and hence well suited for Baltic trades.
Sustainable container market
Constantin Baack, Chief Executive Officer of MPC Container Ships ASA commented “This transaction is backed by our strong belief in the sustainable container market fundamentals and the desire to take advantage of the significant lag between asset values and rates. The structure of the transaction creates an immediate and accretive impact to our earnings in a container market that continues to strengthen by the day.”
Significant operating leverage
With the Transaction, MPCC aims to reinforce its position as the leading intra-regional container tonnage provider with a combined fleet of 75 ships and a total capacity of ~158,000 TEU.
The Transaction will add significant scale and operating leverage to the MPCC platform in a persistently strong container market, with rates, charter durations, and asset values strengthening on a continuous basis.
“We are pleased to welcome renowned shareholders like Arne Blystad, Canomaro Shipping and Klaveness Marine to MPCC. This is a milestone transaction for MPCC and we are particularly excited about the cash flow prospects of the combined fleet which will come to the benefit of our existing and new shareholders in the coming years”, CEO Constantin Baack added.
Estimated EBITDA backlog
The Songa fleet has an estimated EBITDA backlog of USD 22.5 million with an average charter length of about 9 months. On a proforma basis, MPCC currently expects revenues for the combined fleet in the range of USD 290-315 million and an EBITDA in the range of USD 170-180 million for FY 2021.
EBITDA for 2022
Based on the combined charter portfolio and assuming charter renewals at around current market rates and periods, the MPCC fleet is positioned to potentially generate an EBITDA of above USD 350 million for 2022, with USD 70-75 million of this generated by the Songa fleet.
Assumptions for 2023 EBITDA
On the basis of the same assumptions for 2023 EBITDA for this year could exceed USD 450 million with USD 80-90 million generated by the Songa fleet.
Refinancing outstanding debt
It is agreed that approximately USD 115 million of the purchase price will be settled in cash. This amount includes the refinancing of the outstanding debt. The remaining portion will be settled by way of issuing approximately 48-50 million new shares in MPCC.
Such consideration shares in MPCC shall be of the same class as MPCC’s ordinary shares and shall be listed on the Oslo Stock Exchange, and subject to a customary lock-up agreement for a period of 3 months from completion of the Transaction.
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Source:PRNewswire
