Norwegian container ship owner MPC Container Ships ASA (MPCC) has signed a three-year revolving credit agreement with U.S. financial holding company CIT Group on attractive terms.
As previously announced, an initial drawdown of $40 million has been used to refinance existing debt. As a result, the previous term loans with Beal Bank and CIT have been repaid in full.
Further drawdowns on the credit facility will bolster free liquidity and can be used for vessel upgrades, investments or general corporate purposes.
“Having secured a significant charter portfolio, we are pleased to add a flexible instrument to our capital structure while adhering to our strategy of moderate leverage. By securing the facility, we are able to reduce our funding costs and extend the maturity,” commented the company’s CEO Constantin Baack.
“The agreed structure frees up collateral and improves financial flexibility going forward.”
The company recently signed a share purchase agreement to acquire compatriot Songa Container AS for $210.25 million on a debt-free, cash-free basis.
The consolidation move comes at a time of extremely favorable market conditions in the container shipping sector, with strengthened rates, charter durations and asset values.
The transaction is expected to add significant scale and operating leverage to MPCC, with a combined fleet of 75 vessels and a total capacity of 158,000 TEU.
