OCTOBER 28, 2016—In a move designed to prepare the company for “a subdued market situation” and increase its liquidity, , tanker operator Concordia Maritime is selling the 158,000 dwt Suezmax tanker Stena Supreme to “one of Japan’s largest ship owning companies.”
Senior debt funding for the transaction will be supplied by one of Japan’s “Mega Banks.” This is another sale and leaseback transaction, which in this case means that Stena Supreme will be chartered back on a bareboat basis (i.e., without crew) for 12 years, with annual purchase options from year three onwards.
The sale gives rise to an accounting profit of about $1.8 million and a positive liquidity effect of about $22 million. The transaction is scheduled for late November.
“We are very happy with the agreement,” says Kim Ullman, CEO of Concordia Maritime. “It’s a good price, while the leaseback arrangement means that we can continue employing Stena Supreme in the successful Stena Sonangol Suezmax pool for many years to come. Just as with Stena Image, the transaction is a way of preparing ourselves for a subdued market situation and good business opportunities that may arise. We are not sitting still, but are actively working on the fleet’s structure and disposition,” says Ullman.
Ola Helgesson, CFO of Concordia Maritime says, “With the agreement, we are taking a further step into the Japanese financing market. Once again, the terms of the transaction are highly competitive and the agreement will have a substantial positive cash effect for us. We have now conducted two transactions in a short space of time and we are continuously evaluating the possibility of similar arrangements.”
Fearnley Securities AS has acted as financial advisor to Concordia Maritime for the transaction.