Oslo-based MPC Container Ships (MPCC) has entered into an agreement to acquire Songa Container AS and its fleet of 11 container smaller containerships for $210 million.
The ships have an average size of 2,250 TEU and an average age of 11.9 years. Nine of the acquired vessels are fitted with scrubbers, while three are equipped with the highest ice-class making them suited for Baltic trades.
The eleven vessels included in the sale assume Songa will have sold three vessels by the time the transaction closes, expected in the end of July.
With the acquisition, MPCC says it aims to its position as the leading intra-regional container tonnage-provider with a combined fleet of 75 ships and a total capacity of around 158,000 TEU.
According to MPCC, Songa’s fleet has an estimated EBITDA backlog of $22.5 million with an average charter length of about 9 months. On a proforma basis, MPCC said it expects revenues for the combined fleet in the range of $290-315 million and an EBITDA in the range of $170-180 million for FY 2021.
Looking further ahead, MPCC estimates its fleetcould potentially generate an EBITDA of above $350 million for 2022, including $70-75 million generated by the addition of the Songa fleet, assuming charter renewals at around current market rates and periods. Based on the same assumptions for 2023, EBITDA could exceed $450 million with $80-90 million generated by the Songa fleet, MPCC said.
“This transaction is backed by our strong belief in the sustainable container market fundamentals and the desire to take advantage of the significant lag between asset values and rates. The structure of the transaction creates an immediate and accretive impact to our earnings in a container market that continues to strengthen by the day.”
MPCC said $115 million of the purchase price will be settled in cash, while the remaining portion will be settled through the issuance of approximately 48-50 million new shares in MPCC on the Oslo Stock Exchange. DNB Bank ASA has committed to providing $127.5 million in financing related to the cash consideration.
“The container market continues to be strong and MPCC has become a compelling reflection of the underlying container market fundamentals,” said Arne Blystad, Chairman of Songa Container AS. “We are happy to contribute to the consolidation in the container market and build a leader in the regional container segment. Prior to this transaction we were already a shareholder in MPCC and we will become a more significant one post this transaction.”