MPC Container Ships ASA (MPCC) announced earlier today the following company update:
- MPCC has contracted two carbon-neutral 1,300 TEU newbuildings at Chinese-based shipyard Taizhou Sanfu Ship Engineering for delivery in the second half of 2024.
- The vessels come with a dual fuel engine setup which enables operation on methanol as well as conventional MGO, allowing MPCC to take a significant leap forward in its commitment to use carbon-neutral solutions in regional container trades together with strong partners.
- The vessels come with 15-year time charters to North Sea Container Line AS (NCL), backed by CoAs from various parties, including a 15-year CoA with Norwegian industrial group Elkem ASA.
- The contract price of USD 39m per vessel is covered by the contracted cash flows from the 15-year time charter with NCL at an initial rate of EUR ~16,300/day, before inflationary adjustment mechanisms.
- The transaction will provide earnings visibility into 2040 supporting MPCC’s distribution policy, with no negative impact on expected distributions in 2022/2023.
- The project has been awarded NOK 13.7 million by Enova, owned by the Norwegian Ministry of Climate and Environment, and NOK 60 million from the NOx fund, the Norwegian business sector’s fund to reduce emissions.
- The vessel owning entities will be majority owned by MPCC (90.1%) together with Topeka MPC Maritime AS (9.9%), a joint venture between Topeka Holding AS (zero emission shipping company owned by Wilhelmsen Group) and MPC Capital AG.
CEO Constantin Baack comments in relation to the announcement: “I am excited to announce the order of two carbon-neutral newbuildings with long-term time charters. Together with our partners NCL and Elkem, this project allows us to set up a green transportation corridor in Northern Europe, proving our ability to identify and execute on opportunities that are accretive whilst allowing us to make the right move towards a further decarbonisation of the fleet. It also demonstrates that we can meet ambitious environmental goals by joining forces with like-minded partners and we are looking forward to facilitating a green container shipping supply chain along the Norwegian coastline.
We believe that regional container trades with their specific features such as predictable trading profiles and manageable investments in fuel infrastructure will likely become the first truly green shipping trades.
With this project we continue to execute our selective growth strategy whilst mitigating residual value risk and renewing our fleet. The economics of this deal will support MPCC’s distribution potential from 2024 onwards.
With the most recent USD 71m dividend payment, MPCC has YTD 2022 distributed a total of USD 271m to its shareholders, emphasizing our strong commitment to returning capital to investors, which will remain our key priority going forward.”