From the presentation material published in the context of the first quarterly report, MPC Container Ships announced in Oslo that the container ship “AS Fortuna” was classified as a “constructive total loss” following a landing off the coast of Ecuador in September last year, reports News Beezer.
The report further goes on to illustrate how this resulted in net insurance proceeds of $ 6.5 million. In addition, the sale of the damaged ship brought in $ 1.8 million.
Insurance Money for Scrubbers Investment
In June, the container shipping company announced that it would use the total of $ 8.3 million to partially finance the purchase and installation of five gas scrubbers. But the bondholders of the company had to send a clear signal.
At a bondholders’ meeting on Friday, 94.1 percent voted in favor of the proposal, which was accepted.
How will it be done?
- In order to use the insurance money for Scrubber, after the thumbs-up from the investors on Friday, changes will be made to the loan agreement for the company’s senior secured loan of $ 200 million in September 2022 is due.
- The original loan terms mean that the amount of such an event is either for the repayment of bonds or for investment in new ships
- In total, the investment in gas scrubbers is estimated at 17 million USD or just under 147 million NOK. The shipowner finances the remaining share with equity.
- The retrofitting of the gas scrubbers on the five ships must be completed by 31 January 2020.
- DNB Markets and Fearnley Securities were hired as financial advisors.
Big savings
The new IMO regulations on limiting sulfur emissions from shipping will enter into force after the new year.
In this regard, the MPC has already decided to install on 10 of the 68 vessels of the fleet scrubber.
Depends on price difference between low-sulfur and high-sulfur fuel Estimated fuel savings of between $ 1 and $ 4 million per year, per ship. In container shipping, in principle, the charterers pay the fuel bill, but in 6 out of 10 contracts, MPC has used sharing mechanisms to save the scrubbers. In addition, it is expected that ships with gas scrubbers will be able to conclude longer contracts at higher rates.
Investment in gas scrubbers and thus higher and more stable cash flows will increase the security of bondholders, the company concludes.
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Source: News Beezer
