SHIP FINANCE INTERNATIONAL LIMITED - Purchase of vessels
Press release from Ship Finance International Limited - 12.05.2005
Ship Finance International Limited (the "Company" or "Ship Finance") is pleased to advise that the Company has acquired two new building 1,700 teu Containerships, which will be delivered from Wenchong Shipyard in China in May and November this year. The purchase price for each ship is USD 49.25 million. The first ship has already been chartered out to the Korean containership operator Heung A for a period of four years from delivery at a rate of approximately USD 28,000 per day. Ship Finance also intends to charter out the second vessel on a medium term charter. Several interesting offers have been received and are under consideration.
The purchase price includes 1.50 % commission payable to Seatankers, an affiliate of the Company's main shareholder Hemen Holding Ltd. This commission relates to arranging the vessel acquisitions and the charter.
Ship Finance's Chairman, Tor Olav Troim, says in a comment: "This transaction is an important milestone for Ship Finance in its strategy to become a leading global ship financier. It will be the first vessel owned by Ship Finance, which will be on charter to a non-Frontline affiliated party. It will also be Ship Finance's first investment outside the tanker segment. The container market offers great opportunities for our Company. It is a market with strong growth where medium to long term charters are in high demand by major operators. The initial four year charter period will write down a 20 - 25 year life span asset to approximately 50 % of cost. This limits the financial risk for Ship Finance."
The transaction, which will be funded by a combination of bank loans and internal liquidity, will increase cash flow as well as earnings per share and is expected to build significant value for our shareholders.