Greek tanker owner Top Ships led by Evangelos Pistiolis has entered into five sale and leaseback financing agreements with three major Chinese financiers.
The Nasdaq-lister shipowner said the refinancing deals are for two 157,000 dwt suezmax tankers, the Eco West Coast and Eco Malibu (already concluded), two 300,000 dwt VLCC tankers, the Julius Caesar and Legio X Equestris (already concluded), and one 50,000 dwt MR product tanker, the Eco Marina Del Ray which is expected to be concluded between March and May of 2024.
The duration of the financing for the suezmaxes is for ten years and the company has continuous options, after the first year for the Eco Malibu ship and after the second year for Eco West Coast, to buy back the vessels at purchase prices stipulated in the suezmax financing agreements. At the end of the ten-year period Top Ships has an obligation to buy back the vessels for a consideration of $19m per vessel.
The agreements bear an interest rate of 2.65% plus term SOFR for Eco West Coast and 2.5% plus term SOFR for Eco Malibu and have an amortization schedule of $2.2m per annum per vessel.
The consideration from the financing deals amounts to $41m per vessel or $82m in total, $61.2m of which was used to repay the vessels’ previous financing facilities.
The Evangelos Pistiolis-led firm also revealed that the duration of the financing agreements for the VLCCs, the Julius Caesar and Legio X Equestris, is for eight years and has continuous options, after the first year, to buy back the vessels at purchase prices stipulated in the VLCCs financing agreements.
At the end of the eight-years, Top Ships has the obligation to buy back the vessels for a consideration of $37.5m per vessel. The agreements for the VLCCs have a fixed bareboat hire rate of $7.3m per annum and include both interest and repayment. The consideration from the agreements amounted to $125m ($62.5m per vessel), $97.9m of which was used to repay the vessels’ previous financing facilities.
The final vessel the Nasdaq-listed company has signed a leaseback financing agreement was the 50,000 dwt MR product tanker Eco Marina Del Ray.
The duration of this agreement is seven years and after the first year, the company has options to buy back the vessel. At the end of seven years, Top Ships has the option to buy back the vessel for a consideration of $14m.
The agreement bears an interest rate of 2.6% plus term SOFR and has an amortization schedule of $2m annually. The consideration will amount to $28m, the majority of which will be used to repay the vessel’s existing financing facility.
According to the company, the proceeds after repayment of previous debt of the already-concluded financings amount to $47.9m, $43.9m of which was used to fully redeem the company’s outstanding ‘Series F’ perpetual preferred shares, held by a related party.
Evangelos Pistiolis, president, chief executive and director, said: “The amount of cash released from the concluded deals corresponds to about 77% of the current market capitalization of the company. Taking into account the new debt levels of our fleet following the refinancings, the leverage of the fleet remains at a very conservative level of about 45%.”
