June 14, 2007
Ship Finance inks boxship newbuild contracts
Ship Finance International Limited (NYSE:SFL) has signed shipbuilding contracts for a total of five container vessels with scheduled delivery in 2010.
Two 2,500 TEU container vessels will be built at Jiangsu Yangzijiang Shipbuilding Co. Ltd., China and three 1,700 TEU container vessels will be built at Guangzhou Wenchong Shipyard Co. Ltd., China. The aggregate construction cost for the vessels will be approximately $190 million, and will be paid according to the work in progress schedule as specified in the shipbuilding contracts.
Including newbuildings, the company's container fleet will then consist of 12 vessels, of a total fleet of 65 vessels. The new vessels will be marketed for medium to long-term contracts, consistent with our strategy.
Lars Solbakken, CEO of Ship Finance Management AS, said in a comment: "We are very pleased with these newbuilding contracts, where a combination of very attractive construction cost for the vessels and a positive outlook for the container market is expected to generate premium returns for Ship Finance and a higher long-term dividend capacity when the vessels commence trading."
Solbakken said the investments in the newbuildings will initially be financed through existing credit lines and "will thereby not restrict the dividend capacity until delivery. These investments verify the company's strategy to grow and diversify the asset base, and we anticipate further growth opportunities in the container segment."