Performance Shipping Inc. (NASDAQ: PSHG) (“we” or the “Company”), a
global shipping company specializing in the ownership of tanker
vessels, today announced that, through a separate wholly-owned
subsidiary, it has entered into a sale and leaseback agreement with
an unaffiliated Japanese third party for a previously announced
newbuild LR2 Aframax tanker vessel (the “Vessel”). As announced on
March 8, 2023, the newbuilding LNG-ready, scrubber-fitted, Tier III
LR2 Vessel of approximately 114,000 dwt is expected to be delivered
to the Company in the fourth quarter of 2025.
The bareboat financing amount totals US$44.25
million and as part of this agreement, the Vessel will be sold and
chartered back on a bareboat basis for an eight-year period from
delivery at bareboat charter rates equivalent to 96 monthly
installments of US$7,132 per day and a balloon payment of
approximately US$23.7 million payable together with the last
installment, with an implied interest rate of Term SOFR plus 2.425%
per annum. The Company has continuous options to repurchase the
Vessel at predetermined rates following the second anniversary of
the bareboat charter.
As previously announced on March 12, 2024, the
Vessel has been chartered to Clearlake Shipping Pte Ltd. for a
period of five years, upon delivery of the Vessel, at a rate of
US$31,000 per day and an option to extend for a 6th and 7th year at
a base rate plus profit sharing if declared by the charterer.
Andreas Michalopoulos, the Company’s Chief
Executive Officer, stated:
“We are very pleased to have started a
relationship with this highly reputable Japanese leasing house,
which opens up valuable new financing opportunities for us in Asian
markets. We have secured very attractive terms to finance our first
newbuilding vessel, ordered at a price of US$63.25 million, whose
value has since appreciated considerably. This agreement provides
the Company with a high advance rate at a very attractive cost,
while retaining the option to repurchase the Vessel at any time
after the second anniversary. Our remaining capital expenditures
for the Vessel are US$19.0 million prior to delivery, with a final
payment of US$34.8 million upon delivery. The daily cashflow
breakeven, including lease payments, is estimated at about
US$25,000 based on current expenses, which compares favorably with
the US$31,000 daily charter rate secured for the first five years.
We are also in advanced discussions with lessors for our other
newbuild LR2 Aframax tankers.”
About the Company
Performance Shipping Inc. is a global provider
of shipping transportation services through its ownership of tanker
vessels. The Company employs its fleet on spot voyages, through
pool arrangements, and on time charters.
Cautionary Statement Regarding
Forward-Looking Statements
Matters discussed in this press release may
constitute forward-looking statements. The Private Securities
Litigation Reform Act of 1995 provides safe harbor protections for
forward-looking statements in order to encourage companies to
provide prospective information about their business.
Forward-looking statements include, but are not limited to,
statements concerning plans, objectives, goals, strategies, future
events or performance, and underlying assumptions and other
statements, which are other than statements of historical facts,
including with respect to the delivery of the vessels we have
agreed to acquire, future market conditions and the prospective
financing and employment of our vessels. The words “believe,"
“anticipate," “intends," “estimate," “forecast," “project," “plan,"
“potential," “will," “may," “should," “expect," “targets,"
“likely," “would," “could," “seeks," “continue," “possible,"
“might," “pending” and similar expressions, terms or phrases may
identify forward-looking statements.
The forward-looking statements in this press
release are based upon various assumptions, many of which are
based, in turn, upon further assumptions, including, without
limitation, our management’s examination of historical operating
trends, data contained in our records and other data available from
third parties. Although we believe that these assumptions were
reasonable when made, because these assumptions are inherently
subject to significant uncertainties and contingencies which are
difficult or impossible to predict and are beyond our control, we
cannot assure you that we will achieve or accomplish these
expectations, beliefs, or projections.
In addition to these important factors, other
important factors that, in our view, could cause actual results to
differ materially from those discussed in the forward-looking
statements include, but are not limited to: the strength of world
economies, fluctuations in currencies and interest rates, general
market conditions, including fluctuations in charter rates and
vessel values, changes in demand in the tanker shipping industry,
changes in the supply of vessels, changes in worldwide oil
production and consumption and storage, changes in our operating
expenses, including bunker prices, crew costs, drydocking and
insurance costs, our future operating or financial results,
availability of financing and refinancing including with respect to
vessels we agree to acquire, changes in governmental rules and
regulations or actions taken by regulatory authorities, potential
liability from pending or future litigation, general domestic and
international political conditions, the length and severity of
epidemics and pandemics, including COVID-19, and their impact on
the demand for seaborne transportation of petroleum and other types
of products, changes in governmental rules and regulations or
actions taken by regulatory authorities, general domestic and
international political conditions or events, including “trade
wars”, armed conflicts including the war in Ukraine and the war
between Israel and Hamas, the imposition of new international
sanctions, acts by terrorists or acts of piracy on ocean-going
vessels, potential disruption of shipping routes due to accidents,
labor disputes or political events, vessel breakdowns and instances
of off-hires and other important factors. Please see our filings
with the US Securities and Exchange Commission for a more complete
discussion of these and other risks and uncertainties.
Corporate Contact:
Andreas Michalopoulos
Chief Executive Officer, Director and Secretary
Telephone: +30-216-600-2400
Email: amichalopoulos@pshipping.com
Website: www.pshipping.com
Investor and Media Relations:
Edward Nebb
Comm-Counsellors, LLC
Telephone: + 1-203-972-8350
Email: enebb@optonline.net
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