Safe Bulkers, an international provider of marine drybulk transportation services, announced that the Company has entered into sale and leaseback agreements with respect to eight vessels. The proceeds from the sale and leaseback agreements are being used to refinance loan facilities of $105.2 million with terms expiring between 2023 and 2025 and for general corporate purposes.
The aggregate gross proceeds to the Company in connection with the sale and leaseback arrangements are $158.3 million. Under the arrangements, two vessels were leased back, under bareboat charter agreements, for a period of six years and six vessels were leased back under bareboat charter agreements, for a period of eight years. Four of such arrangements contemplate a purchase obligation at the end of the bareboat charter period and purchase options commencing three years following commencement of the bareboat charter period, and the remaining four arrangements contemplate a purchase option five years and nine months following commencement of the bareboat charter period, all at predetermined purchase prices. The Company has assessed that these transactions will be recorded as financing transactions.
The sale and leaseback agreements provide additional liquidity of $53.1 million. The agreements contain financial covenants in line with the existing loan and credit facilities of the Company. The repayment schedule of the Company on a pro-forma basis taking into account the refinancing transactions, in relation to the repayment schedule as of September 30, 2019 is presented in Table 1.
Table 1: Repayment Schedules on an Annual Basis (Including Purchase Obligations)
($ in millions)
|Repayment Schedule as of September 30, 2019||5.0||65.0||90.7||89.0||73.7||196.2||32.9||1.3||14.4||568.2|
|Pro-forma Repayment Schedule After Refinancing||2.6||64.8||91.7||90.3||78.7||185.7||65.1||14.4||26.6||619.9|
In addition, the Company has entered into a three-year unsecured revolving credit facility providing for a draw down capacity of $15 million.
As of January 15, 2020, the Company had liquidity of $143.6 million consisting of $113.8 million in cash and bank time deposits, $14.8 million in restricted cash and $15.0 million available under the unsecured revolving credit facility.
Dr. Loukas Barmparis, President of the Company, said: “These recent financing arrangements have strengthened our liquidity position, which now exceeds $140 million, and provide us with financial flexibility to take advantage of opportunities that may arise.”