Ship Finance converts boxships to bulkers.
SHIP Finance International Ltd has converted four containership newbuildings into seven handysize bulkers, and unveiled a $675m syndicated loan refinancing that is expected to close before the end of March.
The John Fredriksen company said its conversion of the feedership-sized newbuilding quartet into 32,000 dwt-34,000 dwt bulkers, which in today"s market were earning much better rates, was an ?opportunistic? move to maximise shareholder value.
SFI chief financial officer Ole Hjertaker said the switch would entail SFI committing an additional $30m towards the bulkers. However, this is balanced by better chartering and easier financing prospects for the bulkers.
Three of the seven bulkers are firm orders for 32,000 dwt ships, and four ships of 34,000 dwt where final contracts are not yet signed.
This would leave SFI with only one 1,700 teu containership newbuilding in the pipeline, due for delivery later this year and which does not have charter cover.
Mr Hjertaker said the switch did not mean SFI had lost confidence in the containership market, and said the feedership segment remained ?interesting?. SFI would choose between spot and charter for the 1,700 teu ship depending on market conditions at the time of delivery.
Separately, SFI revealed it was close to refinancing a syndicated bank loan related to 26 ships, and enthusiastic lenders had ?significantly over-subscribed? the competitively-priced new $675m facility that the company hoped to close during the first quarter of 2010.
?It is very encouraging to see the overwhelming interest from banks. This is a confirmation of our standing in the financing market, where our conservative business approach and diversified asset portfolio gives Ship Finance a competitive edge when others struggle.?
The news came as SFI unveiled a fourth-quarter net profit of $62.4m for 2009, compared with $3.1m a year ago.
The 2009 figure included a cash gain of $24m recorded on the suezmax newbuilding Glorycrown.
SFI invested $2.5bn in new assets in 2008. The company said it had emerged from 2009 with its robust financial profile intact.
The company had $84m in cash at the end of 2009, and with no re-financing crises in the short term, full compliance with covenants, and low capital commitments in the coming quarters, it is ready for 2010.