Containership owner Global Ship Lease, in which CMA CGM has a sizeable interest, has obtained a third loan waiver from its banks while the two sides continue to negotiate amendments to an $800m credit facility.
Containership owner Global Ship Lease, in which CMA CGM has a sizeable interest, has obtained a third loan waiver from its banks while the two sides continue to negotiate amendments to an $800m credit facility.
Dispensation has been extended for another month until the end of August, but GSL chief executive Ian Webber hopes to have a deal in place well before then.
?We"re in the final stages (of discussions) and I think we are close to agreement,? he said today.
At issue are ship prices, with bankers concerned about the decline in values since GSL arranged the credit line.
Loan-to-value terms are based on charter-free ship prices, whereas all GSL"s vessels are fixed long-term.
The value of ships with firm employment has also fallen, although less so. But with the sale and purchase activity relatively thin, it has become increasingly difficult to establish accurate price levels, whether with or without a charter.
However, 12,000 teu ships scheduled for delivery next year were being privately offered for sale recently at some $35m-$40m below their contract price.
Mr Webber would not divulge the demands of banks, but the pending purchase of the CMA CGM Berlioz is forming part of the discussions with lenders.
GSL, which was originally set up by the French line as a ship investment vehicle and then spun off, is due to buy the 2001-built, 6,600 teu vessel from CMA CGM in September for $82m, with a 12 year charter contract attached. But this acquisition is contingent on the necessary financing.
The New York-listed shipowner had initially been required by banks to submit vessel valuations in April, and received a waiver until June that was extended a second time until the end of July.
Mr Webber noted that all of the company"s vessels remain secured on long-term contracts, with hire payments up to date.
GSL currently owns 16 vessels and has contracted to purchase an additional three including the CMA CGM Berlioz.
The company also has contracts in place to buy two newbuildings from German interests for approximately $77m each, which are scheduled for delivery in the fourth quarter of 2010 with charters to Zim.
Mr Webber said there had been no change to the status of those commitments, despite Zim"s well-publicised problems that have left it in breach of loan covenants and asking shipyards to cancel newbuilding orders.
Once all of the contracted vessels have been delivered by the end of 2010, GSL will have a 19-strong fleet with total capacity of 74,797 teu, a weighted average age at that time of 6.1 years and an average remaining charter term of approximately eight years.
All of the vessels, including those contracted for future delivery, are fixed on long-term charters.
GSL said it would not be paying dividends during the extended waiver period. The facility will bear an unchanged interest margin of 2.75%.
Negotiations are taking longer than anyone had expected because of the uncharted territory in which container shipping finds itself, but vacations had also contributed to the delay in reaching agreement, said Mr Webber.
CMA CGM, charterer of the 16 GSL ships now in service, is having similar differences with Korea Eximbank over valuation issues, as are other lines.
The Korean bank is applying market valuation tests to shipfinance terms, and demanding additional equity from owners for newbuildings that are ready to be delivered on the grounds that ship values are below the contract price.
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