MPC Container Ships ASA secures new financing facility, agrees on sale of six vessels and provides update on charter fixtures
Oslo, 20 October 2021 – MPC Container Ships ASA ("MPCC" or the "Company", and together with its subsidiaries, the "Group") is pleased to announce the following measures that will increase the Company’s balance sheet flexibility in order to execute on the Group’s plan to commence returning capital to investors. These changes are consistent with the Company’s guidance in previous quarters:
- New bank facility of USD 180 million with HCOB at LIBOR + 335 bps
- More than 30 unencumbered vessels post-closing
- Sale of six vessels between 1,000 and 1,500 TEU agreed for in total USD 135 million
- Seven additional multi-year charter fixtures concluded in historically strong charter market
- EBITDA backlog from 1 July 2021 onwards currently above USD 700 million
New credit facility
The Company has agreed a USD 180 million five-year senior secured credit facility (the “Facility”) with Hamburg Commercial Bank (“HCOB”) at attractive terms. The Facility consists of a USD 130 million term loan and a revolving credit facility of USD 50 million.
Constantin Baack, Chief Executive Officer of MPC Container Ships ASA commented: “We have executed on various measures in order to become a low leverage and high dividend paying stock. The new financing with HCOB constitutes another important step of optimizing the balance sheet structure, reducing our cost of debt and extending debt maturities into 2026. In addition, it creates high flexibility and optionality based on more than 30 unencumbered vessels following the refinancing. We appreciate the agility, professionalism and support by HCOB in arranging the Facility, which puts MPCC in a unique position to fulfil corporate goals.”
Sale of vessels
In order to optimize the fleet composition take advantage of historically high container ship asset prices, the Group has agreed to sell six smaller vessels with an average size of 1,200 TEU for a total of USD 135 million, which implies a significant premium to the current MPCC share price. MPCC's total fleet will consist of 68 vessels once the six vessels have been handed over to their new owners.
During Q4 2021, the Company intends to use the Facility, together with parts of the proceeds from the agreed vessel sales to refinance the existing DNB acquisition financing, as well as the outstanding USD 204 million bond financing. As a consequence, the previous acquisition financing with DNB and the outstanding senior secured bonds will be repaid in full and a significant number of vessels owned by the Company will subsequently be unencumbered.
Well positioned to return capital to shareholders
“Following our strategy of prudent and rational capital allocation, these measures are important steps for MPCC to transition from a growth phase to a very strong value proposition of significant cash generation, good earnings visibility with strong dividend capacity and a low risk profile. We are very pleased that the Company is now well positioned to return capital to its shareholders”, CEO Constantin Baack added.
Subsequent to the Q2 reporting on 19 August, the Company has fixed an additional seven vessels with long periods and attractive rates. The EBITDA backlog has subsequently increased to above USD 700 million, demonstrating a continuously strong charter market.
Once executed, the new financing structure of the Group will allow for high flexibility in capital allocation and a solid foundation for implementing a sustainable dividend policy. Following the sequencing of repayment and successful handover of the sold vessels in Q4 2021, the Company expects to enter a new era of returning capital to shareholders as of Q1 2022 by distributing up to 75% of net profit by way of dividends and/or share buybacks.
This press release does not constitute a notice of voluntary early redemption for the outstanding bonds, which will be issued in accordance with the terms of the outstanding bonds.
For further details on the Facility, vessel sales and for an operational update on the Company please refer to the attached presentation. An investor call will be hosted on Wednesday 20 October at 10:00 CEST. Please see below for call-in details. The Facility is subject to customary conditions for documentation and is expected to be completed by the end of October 2021.
This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
This stock exchange announcement was published by Andreas Nguyen, Investor Relations at MPC Container Ships ASA, on 20 October 2021 at 07:00 CEST.
Investor call and webcast:
The Company will host a webcast for the investor call commencing on Wednesday 20 October 2021 at 10:00 hours CEST. The presentation will be made available on the Company’s webpage (https://www.mpc-container.com/investors-and-media/press-releases/). There will be a Q&A session after the presentation.
The event is being streamed. It is recommended that you listen via your computer speakers. Please note that for optimal viewing, it is recommended not to use VPN, but instead to connect directly to the internet. Please disable pop-up blockers in order to view the content in its entirety.
The live webcast can be accessed through the following link:
Alternatively, participants may dial in to the earnings call using the below dial-in information:
Norwegian LocalCall Dial-In (Oslo): +47 23 96 02 64
US LocalCall Dial-In (New York): +1 (631) 510-7495
International/Toll Attendee Dial-In: +44 (0) 2071 928000
Conference ID: 2055597
Further information and contact:
For further information, please contact email@example.com.
About MPC Container Ships ASA:
MPC Container Ships ASA (ticker code "MPCC") is a leading container tonnage provider with a focus on the feeder segment below 5,000 TEU. Its main activity is to own and operate a portfolio of container ships serving intra-regional trade lanes on fixed-rate charters. The Company is registered and has its business office in Oslo, Norway. For more information, please see our website: www.mpc-container.com.
This announcement includes forward-looking statements. Such statements are generally not historical in nature, and specifically include statements about the Company's plans, strategies, business prospects, changes and trends in its business, the markets in which it operates and its restructuring efforts. These statements are made based upon management's current plans, expectations, assumptions and beliefs concerning future events impacting the Company and therefore involve a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, which speak only as of the date of this news release. Consequently, no forward-looking statement can be guaranteed. When considering these forward-looking statements, you should keep in mind the risks described from time to time in the Company's regulatory filings and periodical reporting. The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for the Company to predict all of these factors. Further, the Company cannot assess the impact of each such factor on its business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement.