Seanergy Maritime Holdings Corp. announced that it has successfully completed the refinancing of a previous loan facility secured by M/Vs Lordship and Knightship. Both vessels are Capesize bulk carriers built in 2010 in South Korea, purchased by Seanergy in 2016. The original maturity of the Facility was December 2019.
M/V Knightship was refinanced in June 2018 through a sale and leaseback transaction with AVIC International Leasing Co., Ltd., a major Chinese state-owned financing institution. Seanergy sold and chartered the vessel back on a bareboat basis for an eight year period, having a purchase obligation at the end of the eighth year. The Company has the option to repurchase the vessel at any time following the second anniversary of the bareboat charter party.
M/V Lordship was refinanced in June 2018 through a senior secured loan facility, which was provided by Blue Ocean maritime lending funds managed by EnTrustPermal, one of the world’s largest alternative investors regularly engaged in shipping finance activities. The earliest maturity date of the facility is in 2023 and can be extended until 2025 subject to certain conditions. The new facility does not include any financial covenants or value maintenance provisions, and features a put option for the Company for the sale of the vessel to the lender for a pre-agreed price at the initial or extended maturity date.
The combined effect of the M/V Knightship and the M/V Lordship refinancing, concluded on June 29, 2018 and June 13, 2018, respectively, was a capital release in excess of $10 million, of which approximately $1.3 million will be restricted cash under the new agreements.
Stamatis Tsantanis, the Company’s Chairman & Chief Executive Officer, stated:
“I am very pleased to announce these milestone transactions for our Company that are significantly enhancing our liquidity position. We achieved the $10 million capital release while maintaining the operation of the vessels at lower break-even rates at a time when the market fundamentals are improving considerably. In addition, our Company is now considered one of AVIC’s key business partners in the maritime industry which creates significant business development opportunities in China. In addition, the two refinancings will support future cash flow generation through the extension of the underlying debt maturities. The released capital from the two refinancings may be used for additional vessel acquisitions and for general working capital purposes.
The significant appreciation in the market values of the two Capesize vessels acquired in 2016 allowed us to enter into these lucrative financing arrangements that are beneficial for our shareholders.”