Top Ships has entered into several new agreements to fund its recently delivered Very Large Crude Carrier (VLCC) and the rest of the build program.
Regarding the recent delivery of the VLCC Julius Caesar by Hyundai Heavy Industries of South Korea, the company drew $54 million on its secured credit facility in the form of a sale-leaseback and chartered the vessel bareboat for eight years. The loan comes with financial and other covenants, including with respect to a change in voting control of the company and the option for Top Ships to buy the vessel.
The company has set up a facility with the same financier with substantially similar terms for the VLCC Legion X Equestris, which is expected to be delivered during the first quarter of 2022. In addition, Top Ships has entered into a non-binding term sheet with a major international financier for financing of up to $48.4 million, in the form of an assignment- lease, of the new suezmax building Eco Oceano CA. The credit facility will be repayable in 40 consecutive quarterly installments of $0.7 million from the date of delivery of the vessel, plus a lump sum payment equal to $20.4 million.
The Nasdaq-listed Greek shipowner has also obtained a loan of up to $20 million from a subsidiary of its CEO, Evangelos Pistiolis, to finance part of the construction cost of the 2 VLCCs. To date, $9 million has been drawn. Top Ships has stated that it will repay the principal amount of this facility in cash via one or more installments at its discretion by December 31, 2022. Meanwhile, in January this year, Top Ships entered into an agreement to purchase of shares with Pistolis subsidiary for sale of up to approximately 7.56 million newly issued preferred shares in exchange for $48 million in shipbuilding costs for its new builds and settlement of remaining payment obligations relating to the acquisition in September of last year of an additional 65% interest in the new building construction contracts for its 2 VLCCs, for an amount of up to $27.6 million.
Subject to the approval of Eco Oceano CA financing, in combination with the unsecured financing and the sale of preferred shares, the remainder of the company’s new construction program will be fully financed. the Julius Caesar began his time charter job with a major oil trader for three years, with two annual extension options that are expected to potentially generate around $68.8 million if all options are exercised. The company also confirmed the sale of two one-year MR product tanks, Eco Los Angeles and Eco City of Angels, Extra splash reported earlier. The deal is expected to close in the first quarter of 2022, delivering $17.5 million that Top Ships intends to use for its current build program, including the repayment of unsecured financing.
