New York-listed Ship Finance International Limited has agreed to build two 114,000 dwt LR2 oil product carriers at an undiclosed shipyard in Korea.
The vessels are scheduled to be delivered during the second half of 2017 and will thereafter commence long term time-charters to a US based investment-grade energy company.
The company said that the charter period will be minimum seven years with options to extend the charter period by up to two years, and the aggregate annual EBITDA contribution from the vessels is estimated to approximately USD 11 million on average during the firm period of the charter.
“We are very pleased to further expand our presence in the tanker market with long term time-charters to one of the leading oil majors. The transaction demonstrates our standing in the market as a high quality provider of transportation services for our customers, and we continue building our fleet and charter backlog with accretive acquisitions,” said Ole B. Hjertaker, CEO of Ship Finance Management AS.
In a separate announcement, SFL said that it has agreed with Frontline Ltd. to an early redemption of notes issued to Ship Finance in connection with the sale of five older tanker vessels in 2013 and 2014.
Ship Finance will receive approximately USD 113 million in cash from Frontline, representing the full nominal value of the notes. The transaction will take place in the fourth quarter and is expected to have a positive book effect.
SFL has a fleet of more than 70 vessels is split between tankers, bulkers, container vessels and offshore assets.