French shipping giant CMA CGM has decided to charter four vessels from containership charter owner, Poseidon Containers.
Under the deal, Poseidon Containers, which recently entered a definitive merger agreement Global Ship Lease, will charter the 6,927 TEU boxships to CMA CGM for a period of five years.
The charters for the containerships Mary, Kristina, Katherine and Alexandra were signed “at levels substantially above their prior contracted rates,” Global Ship Lease said, adding that the charters would deliver incremental annualized EBITDA of around USD 11 million compared to third quarter 2018 contracted rates.
The new charter for Mary commenced recently, and the remaining three new charters are set to commence upon expiry of their existing charters during the first half of 2019. The company added that the new five-year charters would generate total EBITDA of USD 135 million over the five-year contract period.
“Upon closing our transformational combination with Poseidon Containers, the enhanced long-term visibility through 2024 from contracted revenue and cashflow from these charters will strengthen GSL’s balance sheet and contribute to further deleveraging, which, together with increased EBITDA, will drive improvements in financial leverage,” Ian Webber, Chief Executive Officer of Global Ship Lease, said.
“We are excited about joining forces with Poseidon Containers; as illustrated by these new charters, the combination will significantly increase our scale and ability to capitalize on favorable fundamentals in the mid-sized and smaller containership segments,” Webber concluded.