SFL Wants More Exposure in Tanker Market, Finalizing Financing for Boxship Acquisitions

Bermuda-based ship owner Ship Finance International Limited (SF) would like to increase its exposure in the tanker segment and is looking into acquisition opportunities.

Since April this year, the company acquired a total of 22 ships, adding more to USD 800 million to the charter backlog. Majority of deals were done in the containership sector. In May the company took delivery of its second 19,200 TEU containership and acquired three more 14,000 TEU boxships. The purchase of three additional 10,600 TEU vessels, with long term time charters to Maersk Line, followed in August.

Ship Finance has partially financed the three recently acquired 10,600 TEU container vessels with a USD 200 million intermediary bank financing.

“We are in the process of arranging long-term financing of the vessels at very attractive terms, which is expected to close in the fourth quarter,” Herald Gurvin, SFL’s Chief Financial Officer, said.

“We’ve done most of deals this year in the containership space. But we have certainly looked at a lot of opportunities in other sectors too. And it’s, of course, a long term objective to balance the segments, by doing it deal by deal and doing the right deals,” Ole Hjertaker, CEO of Ship Finance Management AS, said in an earnings conference call.

However, the company continues to see opportunities in the liner segment as illustrated by the recent acquisitions.

Hjertaker added that the company would like to do deals in the tanker space, especially now that the tanker market is in the recovery mode. One of the potentially attractive segments is LNG.

“If there’s one segment that you can say you’re missing from our portfolio maybe it’s LNG simply because that’s the segment where you see long-term charters to solid counterparties and we haven’t got anything in the portfolio,” Hjertaker added.

SFL’s CEO explained that 45 percent of the company’s backlog is now in the liner segment, up from around 25 pct at year-end 2017, comprising 43 containerships and two car carriers. The tanker segment has been reduced from nearly 20 pct to around 8 pct and offshore segment also came down from more than 40 pct at the end of 2017 to 34 pct at the end of the third quarter.

“Ship Finance has invested nearly USD 900 million so far in 2018, far outweighing the divestment of older assets. And of a fleet totaling 84 vessels and rigs, only one vessel will soon remain from the initial fleet in 2004. This demonstrates our ability to continuously renew, diversify and increase our portfolio of assets and charters, supporting a long term distribution capacity,” Hjertaker added.

The company reported an operating revenue of USD 111 million and net income of USD 30 million in the third quarter of the year.

World Maritime News Staff