Danaos Buys Six Secondhand Containerships

Danaos Corporation on Wednesday announced it has entered into an agreement to acquire six secondhand 5,466 TEU container vessels en bloc for $260 million.

The vessels, which have an average age of 6.8 years, were built at Hanjin Subic Bay shipyard and are on time charter contracts with a weighted average charter duration of approximately two years.

The acquired vessels, which are expected to be gradually delivered to the company by the end of the third quarter of 2021, are eco-design wide beam vessels with improved fuel consumption and load efficiency characteristics when compared to conventional designs, the company said.

The acquisition will increase the company's contracted revenue by approximately $71 million and the company's contracted EBITDA by approximately $39 million in total and will be funded by cash at hand, Danaos said, adding it is evaluating debt financing alternatives to finance part of the purchase price.

Danaos' CEO, Dr. John Coustas, said, “We are very pleased to announce an immediately accretive acquisition of a modern fleet at a fraction of the newbuilding cost and considerably lower than its charter free market value. The purchase price and contracted revenue associated with the vessels significantly reduce the residual risk of this transaction. Also, the targeted vessel segment has very favorable supply dynamics, and the vessels’ staggered charters with durations between one and three years provide re-chartering upside.

“Danaos is uniquely positioned to capitalize on the strength of our balance sheet to pursue this type of growth opportunity, and we are firmly committed to continuing to take actions to create value for our shareholders.”