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