- TOP Ships Inc. announced the delivery of scrubber-fitted, 300,000 dwt newbuilding scrubber-fitted, VLCC vessel M/T Julius Caesar.
- M/T Julius Caesar was constructed at the Hyundai Heavy Industries shipyard in South Korea.
- TOP Ships has also entered into an agreement to sell to unaffiliated third parties its 2 MR product tankers M/T Eco Los Angeles and M/T Eco-City of Angels.
TOP Ships Inc. (the “Company”), an international owner and operator of modern, fuel-efficient “ECO” tanker vessels, announced today the delivery of the very high-specification, scrubber-fitted, 300,000 dwt newbuilding Very Large Crude Carrier (VLCC) vessel M/T Julius Caesar constructed at the Hyundai Heavy Industries shipyard in South Korea, says a press release published in GlobeNewswire.
About the vessel
The vessel has commenced its previously announced time charter employment with a major oil trader for three years with two yearly extensions at the charterer’s option. The revenue backlog expected to be generated by this fixture, assuming all options are exercised, is about $68.8 million. For 2022 alone, this charter is expected to contribute $12.5 million in revenue.
Sale of 2 Product Tankers
The company also announced today that it has entered into an agreement to sell to unaffiliated third parties its 2 MR product tankers M/T Eco Los Angeles and M/T Eco-City of Angels. The vessel sales are subject to customary closing conditions and are anticipated to be concluded during the first quarter of 2022.
Depending on when the closing of the sales takes place, the Company estimates net proceeds after debt repayment of about $17.5 million and intends to use these funds towards its current newbuilding program, including repayment of the Unsecured Financing described below.
Secured Financing of M/T Julius Caesar
In relation to the delivery of M/T Julius Caesar, the Company drew down $54.0 million from its secured credit facility (in the form of a sale and leaseback transaction) with a major international financier entered into in November 2021, and has bareboat chartered back the vessel for a period of eight years at a bareboat hire rate consisting of 32 consecutive quarterly installments of $0.7 million and a balloon payment of $32.4 million payable together with the last installment, plus interest based on the 3 months USD LIBOR (or the applicable LIBOR replacement rate), plus 2.60% per annum. As part of this transaction, the Company has continuous options to buy back the vessels at purchase prices stipulated in the bareboat agreements. The facility contains customary financial and other covenants including with respect to a change in voting control of the Company.
M/T Legio X Equestris
The Company has in place a facility with the same financier with substantially similar terms for the M/T Legio X Equestris (Hull No. 3214) which is expected to be delivered during the 1st quarter of 2022.
M/T Eco Oceano CA
The Company also announced that it has entered into a non-binding term sheet with a major international financier for up to $48.4 million for the financing, in the form of sale and leaseback, of the newbuilding vessel M/T Eco Oceano CA (Hull No. 871), subject to credit committee approval.
According to the terms, the credit facility will be repayable in 40 consecutive quarterly installments of $0.7 million commencing from the date of delivery of the vessel, plus a balloon installment equal to $20.4m. The credit facility will bear interest based on the 3 month USD LIBOR (or the applicable LIBOR replacement rate), plus a margin of 3.50% per annum.
Subject to the approval of the term sheet relating to the financing of the M/T Eco Oceano CA, in combination with the Unsecured Financing and the sale of Series F Preferred Shares described below, the Company’s remaining newbuilding program, consisting of the VLCC vessel M/T Legio X Equestris (Hull No. 3214) and the Suezmax vessel M/T Eco Oceano CA (Hull No. 871), will be fully funded.
Unsecured Financing
The Company also announced that it has entered into an unsecured credit facility for up to $20 million with an affiliate of its CEO in order to finance part of the shipbuilding cost of the 2 VLCCs. To date, $9 million has been drawn down.
The company shall repay the principal amount of this facility in cash via one or multiple installments at its discretion by December 31, 2022. The principal terms of the loan include an arrangement fee of 2%, interest of 12% per annum, and a commitment fee of 1.00% on the undrawn part of the facility.
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Source: GlobeNewswire
