Ocean Yield ASA has entered into newbuilding contracts for three LEG (Liquefied Ethylene Gas) carriers of 36,000 cbm capacity, to be built at Sinopacific Offshore & Engineering, China.
The vessels are scheduled for delivery in August, October and December 2016 respectively, and will after delivery be chartered on 15-year “hell and high water” bareboat charters to the Hartmann Group, Germany, where the first ten years have a fixed charter rate and the last five years a floating charter rate.
Hartmann has sub-chartered the vessels for a 10 year period on Time Charter basis with additional five one-year options to a strong counterparty.
The total investment is estimated to be approximately USD 243 million. Hartmann will have an opportunity to buy into 1/3 ownership of the vessels at the end of year 10 at depreciated value, or alternatively receive a 1/3 profit share from year 11 to year 15.
Ocean Yield ASA’s Chief Executive Officer Lars Solbakken said: “We are pleased to announce this transaction as it marks Ocean Yield’s entry into the gas segment. We have now committed to investments of more than USD 1 billion since the establishment in March 2012.
The transaction increases our annual EBITDA by USD 31.5 million after delivery of the three vessels and provides comfort that Ocean Yield will continue to grow its quarterly dividends.”
Press Release, May 8, 2014