Global Ship Lease agreed to purchase 12 containerships from Borealis Finance for an aggregate purchase price of $233.9 million.

The 12 containerships have an average size of approximately 3,000 TEU and a weighted average age of 11 years. The ships are all on charter with liner operators, with remaining charter durations of three to 25 months. With these additions, Global Ship Lease’s fleet will comprise 62 containerships with a total capacity of 322,770 TEU, making Global Ship Lease the eighth largest non-operating owner of containerships by TEU capacity, according to the company.

The 12 vessels are scheduled for delivery during Q3/21. Global Ship Lease expects to fund the purchase price with cash on hand, the proceeds of new bank debt and the issuance of $35 million of its existing 8% senior unsecured notes to the sellers.

Based on the existing charters and assuming renewals at current market rates for the four charters that come open prior to mid-2022, the newly acquired ships are expected to contribute approximately $60.5 million of adjusted EBITDA in the first 12 months. This represents an increase of approximately 36% on adjusted EBITDA for the 12 months ended March 31 and implies a strongly accretive purchase price/annual adjusted EBITDA multiple of approximately 3.9 times. The ships are anticipated to add approximately $1.09 of earnings per share in the first 12 months, based on outstanding share count on June 8, LIBOR on June 8 and other assumptions, representing an increase of approximately 70% compared with adjusted earnings per share for the 12 months ended March 31.

“We are pleased to announce the agreement to acquire these 12 ships, which are cash flow positive from the first day without any additional issuance of common shares,” George Youroukos, executive chairman of Global Ship Lease, said. “The vessels have an appealing combination of existing medium-term charter cover and upside potential in the relative near term from charter renewals in one of the strongest ever containership charter markets, in which both charter rates and durations are significantly above the levels of recent years. These additions to the GSL fleet will increase our exposure to the workhorse feeder and handy size segments, which are currently commanding record-high charter rates, stemming from strong demand and effectively full employment, and discussions are already underway to secure additional forward cover on terms reflecting these superior market conditions. We have also further strengthened our financial position recently by completing the refinancing of our debt facility previously falling due mid-2022, thereby eliminating all material debt maturities before late 2024. Looking forward, we remain highly optimistic about both the prospects for mid-sized and smaller containerships and GSL’s ability to continue executing an accretive, charter-attached growth strategy that improves our earnings and forward visibility while minimizing residual value risk and giving additional long-term support to our dividend-paying capabilities.”

Clarksons Platou Securities acted as sole advisor to Global Ship Lease, while Seward & Kissel represented the company as legal counsel.