FSL TRUST ACQUIRES TWO CRUDE OIL TANKERS FOR US$140 MILLION
• Transaction significantly accretive to DPU; raises quarterly distribution by
11.6% compared to 4Q 2007
• Total asset acquisitions of US$298 million in just over 12 months since
listing; Trustee-Manager on track to meet US$300 million FY 2008 target
Singapore, 21 April 2008 – FSL Trust Management Pte. Ltd. (“FSLTM”), Trustee-Manager
of First Ship Lease Trust (“FSL Trust”), announced today that it has acquired two crude oil
tankers on Friday, 18 April 2008, from privately held and Turkey-based Geden Lines
(“Geden”) for a total consideration of US$140 million. Geden is Turkey’s largest shipping
company with a total of 77 ships trading or on order at various shipyards. Geden is part of
the Turkish Cukurova conglomerate which is ultimately controlled by the prominent
Karamehmet family.
The acquired vessels have been concurrently leased back to the seller for a lease term of 10
years. The lease payments are on a floating basis resetting on a quarterly basis in line with
changes in the 3-month US$ Libor rate. For each vessel, the lease agreement contains a
total of four purchase options for the lessee with the earliest one on the fourth anniversary of
the contract.
Significant accretion to DPU
The acquisition of the two crude oil tankers will be significantly and immediately accretive to
FSL Trust’s distribution per unit (“DPU”). Assuming no change in the equity structure of FSL
Trust and after deducting estimated incentive fees attributable to the Trustee-Manager, the
acquisition is projected to generate an additional DPU of US0.16¢ for the quarter ending 30
June 2008, and an additional DPU of US0.28¢ for each full calendar quarter thereafter.
Rationale for the acquisition
Mr Philip Clausius, Chief Executive Officer of FSLTM, said: “We are very pleased to have
entered into this agreement with Geden, Turkey’s largest shipping company. Apart from
diversifying our customer base further, we are also entering a new market segment through
the acquisition of our first crude oil tankers.
“This US$140 million transaction brings our total asset acquisitions to US$298 million in just
over a year since our listing in March 2007. Its size is obviously very meaningful in the
context of our acquisition target of US$300 million for FY 2008, which we continue to be very
confident of meeting. Equally important, we are delighted to again be able to deliver very
substantial and immediate DPU accretion to our unitholders. The acquisition will raise the
projected quarterly DPU by 11.6% compared to the US2.42¢ distributed for the last quarter
of 2007.”
Funding
The acquisition of the two ships was fully funded upon closing by drawing from FSL Trust’s
two revolving credit lines which are each arranged by The Bank of Tokyo-Mitsubishi UFJ
Co., Ltd., Singapore Branch and Bayerische Hypo- und Vereinsbank AG, Singapore Branch.
These facilities are provided on a floating rate basis, which for this transaction provide a
substantially natural hedge for the floating rate lease income. After the funding of this
transaction, the undrawn portion of FSL Trust’s credit facilities is about US$150 million.
FSL Trust press release
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