Tanker company Euronav has entered into a [ds_preview]five-year sale and leaseback agreement for four VLCC vessels with investment vehicles advised by Wafra Capital Partners, a private equity partnership. The four VLCCs are the »Nautilus« (2006), »Navarin« (2007), »Neptun« (2007) and »Nucleus« (2007). The transaction assumes a net en-bloc purchase price of 186 mill. $.
According to the company the transaction produced a capital gain of about 37 mill. $ and the transaction should be booked as an operating lease under IFRS. As per Euronav dividend policy, this capital gain will not be eligible for dividend distribution. After repayment of the existing debt, the transaction generated in excess of 100 mill. $ free cash. The vessels were delivered to their new owners, the investment vehicles advised by Wafra Capital Partners Inc. on 22 December 2016.
Euronav has leased back the four vessels, which were built by Dalian Shipbuilding Industry Co. (DSIC) under a five year bareboat contract at an average rate of 22,000 $ per day per vessel and at the expiry of each contract the vessels will be redelivered to their new owners.
Pareto Securities advised Euronav on this transaction.
Hugo De Stoop, Euronav‘s Chief Financial Officer, said: »Euronav is very pleased to have executed this transaction in what have been challenging conditions for asset values in shipping markets. This transaction has the advantage of increasing our liquidity position for 2017 whilst maintaining our exposure to a market that, we believe, will be interesting over the next five years.«
Wafra Capital Partners, a United Sates registered investment adviser that is indirectly beneficially majority owned by an autonomous agency of the government of Kuwait, provides investment advisory services to its clients and principally focuses on structuring and advising investment vehicles on a Shari‘ah-compliant basis in the asset-based and structured finance arenas.
