Sale and Leaseback Agreement
Performance Shipping Inc. (NASDAQ: PSHG) (“we” or the “Company”), a global shipping company specializing in the ownership of tanker vessels, today announced that, through a separate wholly-owned subsidiary, it has entered into a sale and leaseback agreement with an unaffiliated Japanese third party for a previously announced newbuild LR2 Aframax tanker vessel (the “Vessel”). As announced on March 8, 2023, the newbuilding LNG-ready, scrubber-fitted, Tier III LR2 Vessel of approximately 114,000 dwt is expected to be delivered to the Company in the fourth quarter of 2025.
The bareboat financing amount totals US$44.25 million. As part of this agreement, the Vessel will be sold and chartered back on a bareboat basis for an eight-year period from delivery at bareboat charter rates equivalent to 96 monthly installments of US$7,132 per day and a balloon payment of approximately US$23.7 million payable together with the last installment, with an implied interest rate of Term SOFR plus 2.425% per annum. The Company has continuous options to repurchase the Vessel at predetermined rates following the second anniversary of the bareboat charter.
Charter Agreement with Clearlake Shipping
As previously announced on March 12, 2024, the Vessel has been chartered to Clearlake Shipping Pte Ltd. for a period of five years, upon delivery of the Vessel, at a rate of US$31,000 per day and an option to extend for a 6th and 7th year at a base rate plus profit sharing if declared by the charterer.
Andreas Michalopoulos, the Company’s Chief Executive Officer, stated: “We are very pleased to have started a relationship with this highly reputable Japanese leasing house, which opens up valuable new financing opportunities for us in Asian markets. We have secured very attractive terms to finance our first newbuilding vessel, ordered at a price of US$63.25 million, whose value has since appreciated considerably. This agreement provides the Company with a high advance rate at a very attractive cost, while retaining the option to repurchase the Vessel at any time after the second anniversary. Our remaining capital expenditures for the Vessel are US$19.0 million prior to delivery, with a final payment of US$34.8 million upon delivery. The daily cashflow breakeven, including lease payments, is estimated at about US$25,000 based on current expenses, which compares favourably with the US$31,000 daily charter rate secured for the first five years. We are also in advanced discussions with lessors for our other newbuild LR2 Aframax tankers.”
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Source: Globe News Wire
