SFL - Termination of charters for five container vessels
(Thomson Reuters ONE) -
Press release from Ship Finance International Limited, April 10, 2012
Ship Finance International Limited (NYSE:SFL) ("Ship Finance" or the "Company"),
today announced that it has agreed to terminate chartering agreements with
Horizon Lines, LLC ("Horizon Lines") relating to five of its vessels. Ship
Finance will receive as termination compensation $40 million in second lien
notes issued by Horizon Lines and warrants exercisable into ten percent of the
common stock of Horizon Lines, Inc. as part of the restructuring outlined below.
The 2,824teu vessels were built in Korea in 2006 and 2007, and have been
chartered to Horizon Lines for an average of approximately 5 years. The original
bareboat charter term was for 12 years, but following the termination of the
Horizon Lines charters, Ship Finance will employ the vessels in the time-charter
market instead. The break-even rate per day per vessel (after interest, debt
amortization and estimated operating expenses) will be approximately $10,500 for
the first 18 months and thereafter approximately $14,500 per day for the next
66 months.
The issuance of the $40 million of notes is part of a comprehensive
restructuring of Horizon Lines. The notes will be part of a total of
approximately $140 million of second lien notes, and junior to approximately
$225 million of first lien notes. The notes will mature in October 2016 and
interest is payable semi-annually, first time in October 2012. The annual
interest rate will be 13% if paid in cash, 14% if paid 50/50 in cash and newly
issued bonds and 15% if paid in newly issued bonds only.
As security for the bonds, Horizon Lines has pledged essentially all of its
assets, including 12 owned vessels in its U.S. Jones Act business. Horizon
Lines will have the option to redeem the notes at 106% starting in October
2013, at 103% starting in October 2014 and at par starting in October 2015.
In addition, as part of Horizon Lines' overall restructuring, holders of its
remaining $228 million of Convertible Senior Secured Notes converted their notes
into common stock (or warrants for non-U.S. citizens). Following this conversion
of Convertible Senior Secured Notes and the issuance of the $40 million of notes
to Ship Finance, Horizon Lines, Inc.'s total funded debt will be reduced from
approximately $593 million as of March 31, 2012 to approximately $404 million.
CEO of Ship Finance Management AS, Ole B. Hjertaker, said in a comment: "We are
pleased with the outcome of this comprehensive restructuring of Horizon Lines.
The vessels are only five years old on average and of good quality and design.
Even though the container chartering market currently is soft, we believe there
is a good potential for improvements from current levels and our break-even
rates are significantly below the historical average."
Mr. Hjertaker continued: "The redelivery of the five vessels to Ship Finance
will enable Horizon Lines to focus entirely on its core domestic U.S Jones Act
container market, and Horizon Lines should be well positioned to deliver
positive results going forward. Ship Finance will become a large stakeholder in
the restructured Horizon Lines and expects to benefit from both the interest on
the notes as well as the value of securities received."
April 10, 2012
The Board of Directors
Ship Finance International Limited
Hamilton, Bermuda
Questions should be directed to:
Harald Gurvin, Chief Financial Officer, Ship Finance Management AS
+47 23114009 / +47 97520363
Ole B. Hjertaker, Chief Executive Officer, Ship Finance Management AS
+47 23114011 / +47 90141243
About Ship Finance
Ship Finance is a major ship owning company listed on the New York Stock
Exchange (NYSE: SFL). Including newbuildings, the Company has a fleet of 69
vessels, including 25 crude oil tankers (VLCC and Suezmax), two chemical
tankers, five oil/bulk/ore vessels, 11 drybulk carriers including two
newbuildings, 15 container vessels including four newbuildings, six offshore
supply vessels, one jack-up drilling rig, one ultra-deepwater drillship and two
ultra-deepwater semi-submersible drilling rigs. The fleet is one of the largest
in the world and most of the vessels are employed on long-term charters.
More information can be found on the Company's website: www.shipfinance.org
Cautionary Statement Regarding Forward Looking Statements
This press release may contain forward looking statements. These statements are
based upon various assumptions, many of which are based, in turn, upon further
assumptions, including Ship Finance management's examination of historical
operating trends. Although Ship Finance believes that these assumptions were
reasonable when made, because assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible to predict and
are beyond its control, Ship Finance cannot give assurance that it will achieve
or accomplish these expectations, beliefs or intentions.
Important factors that, in the Company's view, could cause actual results to
differ materially from those discussed in this presentation include the strength
of world economies and currencies, general market conditions including
fluctuations in charter hire rates and vessel values, changes in demand in the
tanker market as a result of changes in OPEC's petroleum production levels and
worldwide oil consumption and storage, changes in the Company's operating
expenses including bunker prices, dry-docking and insurance costs, changes in
governmental rules and regulations or actions taken by regulatory authorities,
potential liability from pending or future litigation, general domestic and
international political conditions, potential disruption of shipping routes due
to accidents or political events, and other important factors described from
time to time in the reports filed by the Company with the United States
Securities and Exchange Commission.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Ship Finance International Limited via Thomson Reuters ONE
[HUG#1601184]
Unternehmensinformation / Kurzprofil:
Datum: 10.04.2012 - 14:48 Uhr
Sprache: Deutsch
News-ID 133444
Anzahl Zeichen: 7164
contact information:
Town:
Hamilton
Kategorie:
Business News
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