Belships ASA (OSE: BEL) has entered into two letters of intent for the acquisition of two Ultramax bulk carriers.
One 10 year bareboat charter for a 64,000 dwt Ultramax bulk carrier newbuilding. The vessel will be delivered by a Japanese shipyard during the second half of 2020. The estimated cash breakeven for the vessel upon delivery is about USD 10,750 per day including operational expenses. Belships will pay a sum of USD 3 mill upon signing contract, expected to occur during the first quarter of 2020. The agreement comes with purchase options below current market values and can be exercised after the fourth year until the end of the charter.
A second-hand Ultramax bulk carrier built in 2017 by a Japanese shipyard will be acquired for a price of USD 24.5 million. Delivery is expected during the second quarter of 2020, after having passed its intermediate drydocking survey. The payment for the vessel will be settled by issuing new shares equilvalent to 50 per cent of the purchase price at a subscription price of NOK 7.15 per share, and the remaining in cash upon delivery. The vessel is planned to be financed by utilising the previously announced Accordian Tranche equivalent to approximately 60 per cent of the purchase price. Hence, the transaction will have a positive cash effect of about USD 2.45 million.
Both agreements are conditional upon certain subjects being lifted by the parties involved. Conclusion is expected within January 2020.
Following the announcement made earlier, the BELEAST has been delivered to its charterer for the agreed bareboat charter and subsequent sale in accordance with the agreement.
"This is another significant milestone for Belships. We continue to expand and modernise our fleet whilst maintaining capital discipline in our quest to develop the company further. The goal of this growth remains focused on creating value for our shareholders and increasing the attractiveness of trading our shares," said Belships CEO, Lars Christian Skarsgård.
Following the transactions, the Belships fleet will count 24 Supramax/Ultramax bulk carriers, with an average age of about 5 years, including newbuildings to be delivered in 2020 and 2021. Belships strategy going forward is to grow accretively as a fully integrated shipowner and operator of geared bulk carriers.