Costamare Invests in Fleet Expansion
Costamare Inc. (NYSE: CMRE) announced that it has contracted with Sungdong Shipbuilding & Marine Engineering Co., Ltd. for the construction and purchase of two newbuild containerships, each of about 9,000 TEU capacity. The two newbuildings are expected to be delivered by the end of 2012. The Company has entered into time charter agreements with MSC for the employment of each vessel immediately upon delivery, for duration of ten years.
Both the contract price and the daily charter rate are similar to those recently agreed regarding the three 9,000 TEU vessels contracted with China Shipbuilding Trading Company Limited and Shanghai Jiangnan Changxing Heavy Industry Co., Ltd. and chartered to MSC for a period of 10 years.
The acquisition is expected to be financed by own funds and a new credit facility, without using any currently available credit lines.
The Company also announced that it has entered into the following agreements:
(a) To purchase a 2,024 TEU vessel, built in 1992
(b) To purchase a 2,023 TEU vessel, built in 1991
(c) To purchase a 2,023 TEU vessel, built in 1991
(d) To sell the 1977 built 1,654 TEU c/v MSC Namibia
(e) To sell the 1976 built 1,630 TEU c/v MSC Sudan
(f) To sell the 1977 built 1,630 TEU c/v MSC Sierra
The total acquisition cost for the first three vessels is $30 million and the total sale price for c/v's MSC Namibia, MSC Sierra and MSC Sudan is approximately $21 million.
All three secondhand vessels have been acquired with own funds.
The newly acquired vessels are expected to be delivered before the end of March 2011 and will substitute the MSC Namibia, MSC Sudan and MSC Sierra in their respective charter party agreements.
Gregory Zikos, Chief Financial Officer of the Company said: "We are pleased to further strengthen our highly valued relationship with MSC. The two newbuildings are expected to contribute in excess of $300 million of contracted revenues".
"At the same time we are implementing our fleet renewal and expansion strategy. With an incremental cost of approximately only US $ 3 million per vessel we are substituting older assets with three vessels 14 to 15 years younger, which are larger and have better specifications, enhancing our earnings potential and rechartering upside. We expect to realize book gains of approximately US $ 11 million from the above disposals."