Ocean Yield splashes $576 million on up to ten Newcastlemax newbuildings

Norwegian shipowner Ocean Yield AS is continuing its shopping spree now targeting the acquisition of up to ten Newcastlemax dry bulk newbuildings for a total consideration of up to $576 million.

Illustration; Image credit: GOGL

Upon delivery, the vessels will commence 15-year bareboat charters to an unnamed dry bulk operator with purchase obligations at the end of the charter period. Ocean Yield expects to take delivery of the vessels between Q1 2025 and Q2 2026.

Details on the vessel design and their shipbuilder/s were not disclosed.

The final transaction scope will be a minimum of five and a maximum of ten vessels, to be determined at a later stage. Assuming a transaction scope of ten vessels, the transaction will add around $950 million to the Company’s EBITDA backlog,” Ocean Yield said.

The large deal is being revealed on the back of a recent investment in the company’s third methanol-ready containership. The 5,500 TEU newbuilding container vessel is under construction at HJ Shipbuilding, Korea, and it will be a sister vessel to the two vessels bought on 10 June 2022 and 18 July 2022, respectively. All three ships have been designed to enable conversion to dual fuel operation with methanol as fuel.

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The trio is slated for delivery during 2023, upon which they are set to commence 7-year time-charter contracts to ZIM Integrated Shipping Services. Ocean Yield said that these investments contribute approximately $240 million to its EBITDA backlog.

The shipowner plans to finance the methanol-ready boxships with a combination of long-term debt and cash, and expects to sign loan agreements in the fourth quarter of this year under ‘attractive terms’.

Ocean Yield closed the third quarter of this year with an EBITDA of $48.8 million and EBITDA adjusted for finance lease of $ 77.0 million. Net profit for the period was $ 23.4 million.

“Despite volatile markets and increasing macro uncertainty, the third quarter was another solid quarter for Ocean Yield with stable performance across our fleet of vessels on long term charters. As we continue to invest in modern, future-proof vessels, we are pleased with the continued support from our senior financing providers, enabling us to execute attractive financing for both new transactions and re-financings of the existing fleet,Andreas Røde, CEO of Ocean Yield, said in a comment.

The company’s investment strategy remains focused on modern tonnage and newbuildings within the conventional shipping segments, in particular vessels with long-term charters.