April 12, 2006
Horizon Lines completes box ship deal
Horizon Lines, LLC, has closed definitive long-term charters and related agreements with John Fredriksen's Ship Finance International Limited (NYSE: SFL - News) and its subsidiaries to lease five newly- built, U.S.-flag container vessels. The subsidiaries of Ship Finance will acquire the vessels from third parties for a sum of approximately $280 million.
The five sister vessels are being built at the Hyundai Mipo shipyard in Korea and are scheduled to be delivered over the course of a five-month period commencing at the beginning of 2007. The vessels have a capacity of 2,824 TEUs and are capable of a service speed of 23 knots.
Horizon Lines will operate the vessels in its expanded TP1 service from the U.S. West Coast to Guam and Asia. The term of each bareboat charter will be 12 years with a 3-year renewal option on the part of Horizon Lines. Horizon Lines will have the option to buy the vessels after 5, 8, 12 and 15 years. Additional information regarding this transaction will be included in the Form 8-K to be filed with the SEC on April 17, 2006.
Chuck Raymond, President and CEO of Horizon Lines said, "The addition of these five new vessels commences our long-term vessel replacement strategy in a very cost effective and capital efficient manner. This transaction will benefit our customers, partners and shareholders, while reducing the age of our operated fleet to one of the lowest in the markets we serve. We look forward to our mutually beneficial relationship with Ship Finance International Limited."