Top Ships, a Greek tanker owner listed in New York, intends to acquire four MR product tankers with Ice Class 1A. The newbuilds are being constructed at Guangzhou Shipyard International and have already been chartered to an oil company for seven years each.
The Athens-based tanker shipping company has entered into an agreement to acquire four shipping companies that hold construction contracts for vessels, each with a deadweight tonnage of 50,000 dwt. Deliveries are scheduled for between June 2029 and March 2030. The seller is a party affiliated with Top Ships, which is not named in detail in the announcement.
The purchase price for all the shares in the four companies totals approximately $34.95 million and is payable by the end of the current year. This figure represents the price for the company shares, not the total construction cost of the tankers. Completion of the transaction is subject, amongst other things, to the planned financing agreements being finalised.
Leasing to cover 85% of construction instalments
The shipping companies are currently finalising leasing agreements with a major Chinese leasing firm. The financing arranged by the seller is expected to cover around 85 per cent of all shipbuilding instalments. Top Ships has not disclosed the name of the financing partner.
As this is a transaction with a related party, the acquisition was approved by a special committee comprising independent, impartial board members. The committee had the reasonableness of the purchase price assessed by an independent financial adviser.
Time charter contracts have already been agreed for all four newbuilds with a major oil company, which has also not been named. These contracts commence upon delivery of the respective vessels and have a fixed term of seven years. The charterer may extend the charter for up to a further three years. If all options are exercised, Top Ships estimates the gross charter revenue from the four vessels to total around $316.9 million.
Newbuild programme expands to 14 MR tankers
Upon completion of the acquisition, the shipping company’s MR newbuild programme would grow to 14 vessels. Deliveries of the ten newbuilds agreed to date, each with a deadweight tonnage of 50,000 dwt, are scheduled between the second quarter of 2028 and the fourth quarter of 2029. The latest transaction is set to increase the number of ice-class vessels in the fleet to seven.
The acquisition is in line with the announced reallocation of capital to the core tanker business, the company’s management explained. At the same time, Top Ships is expanding its client base to include another major oil company. The ice class enhances the vessels’ operational flexibility, whilst the long-term charter contracts secure employment well into the next decade.
For all 14 new MR-class vessels, Top Ships anticipates potential gross charter revenue of around $997 million following completion of the transaction. Including the existing fleet and the proportionate charter volume of the vessels held as a 50% joint venture, the total volume amounts to around $1.24 billion. Both figures include optional charter periods and are therefore not fully secured by fixed terms.
The active tanker fleet comprises one product tanker of 50,000 dwt, one Suezmax tanker of 157,000 dwt and two VLCCs, each of 300,000 dwt. Through a joint venture, Top Ships also holds a 50% stake in each of two further product tankers, each with a deadweight tonnage of 50,000 dwt.
