MPCC continues fleet renewal, secures new charter contracts

Norwegian container tonnage provider MPC Container Ships (MPCC) is continuing its fleet renewal with the acquirement of four 3,800 TEU wide beam eco-design vessels at a total price of $180 million. Separately, the company has agreed on new 24-26-month charter contracts for vessels AS Anne and AS Pamela.

The activities are aimed at further optimizing MPCC’s portfolio and enhancing its fleet composition, thereby strengthening the company’s backlog and improving earnings visibility.

The four 3,800 TEU vessels are expected to be handed over from the current owner in Q4 2024, and according to MPCC, will continue to run under current charter agreements until Q2 2025. Thereafter, the vessels will enter into a new pre-agreed 35-month time charter contracts, plus 12 months option, with a “top-tier” liner company.

These vessels are anticipated to generate aggregate revenues of approximately $150 million over the firm charter period, MPCC said, adding that under the agreed charters, the new ships are expected to generate EBITDA between $110-120 million.

Subject to the successful completion of the transactions, the acquisition is intended to be funded through a conservative mix of equity and debt, where the debt shall be covered by the associated EBITDA backlog, MPCC noted.

As for AS Anne and AS Pamela, their contracts are said to be fixed approximately three months forward on average, and the vessels will be delivered into new charters during Q4 2024 and Q1 2025.

In total, the new charter agreements, including the newly acquired vessels, are expected to add approximately $200 million to the company’s revenue backlog and increase contract coverage to 99% of open days remaining in 2024, 81% in 2025 and 50% in 2026.

MPCC’s CEO Constantin Baack commented: “The acquisition of the four 3,800 TEU wide-beam eco-design vessels is a continuation of our selective fleet renewal strategy. The transaction underscores our strong competitive position and our ability to acquire attractive vessels and secure long-term employment with top-tier liner companies. This not only strengthens our partnership with a leading industry player, but it also enhances our revenue visibility, contributing to our long-term growth and shareholder value creation.”

The company is said to be committed to making its fleet more environmentally friendly. A significant part of the fleet is eco-design or to be retrofitted. Specifically, according to MPCC, there are 21 vessels in the retrofit program.

To remind, at the beginning of 2024, as part of new strategic initiatives aimed at accelerating the company’s long-term journey towards fleet renewal and decarbonization, MPCC partnered with Danish short sea operator Unifeeder in a joint investment for the construction of a 1,250 TEU dual-fuel methanol newbuilding.

What is more, as part of the retrofit program, MPCC entered into joint retrofit agreements with various charter customers. Under the agreements, both the charterer and MPCC will share the costs of retrofit investments followed by an extension of the vessels’ time-charter contracts.

At the time, the company stated: “Through these selective investments, MPCC not only aims to reduce its carbon footprint but also to create long-term shareholder value by extending charters and enhancing the long-term competitiveness of its fleet, while remaining committed to its low-leverage strategy and distribution policy.”