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Danaos Acquires Six Secondhand Containerships for $260 Million

Mike Schuler
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July 14, 2021

Greek containership owner and charterer Danaos Corporation (NYSE: DAC) has entered into an agreement to acquire six 5,466 TEU containerships on the secondhand market.

The “eco-design wide beam ships” have an average age of 6.8 years and were built en bloc Hanjin Subic Bay shipyard in the Philippines. All are are on time charter contracts to “leading liner companies” with a weighted average charter duration of approximately 2 years.

Danoas reports the ships come at a purchase price of $260 million funded by cash at hand, although the company said it was evaluating debt financing alternatives to finance part of the purchase price.

The acquisition is expected to generate $71 million in contracted revenue and increase contracted EBITDA by approximately $39 million in total. Delivery of the vessels is expected gradually concluding in the third quarter of 2021.

Danaos’ fleet currently consists of 65 modern, large-size containerships representing total capacity of 403,793 TEUs (not counting the six ships just announced), making it one of the largest containership charter owners in the world based.

“We are very pleased to announce an immediately accretive acquisition of a modern fleet at a fraction of the newbuilding cost and considerably lower than its charter free market value,” said Danaos’ CEO, Dr. John Coustas. “The purchase price and contracted revenue associated with the vessels significantly reduce the residual risk of this transaction. Also, the targeted vessel segment has very favorable supply dynamics, and the vessels’ staggered charters with durations between one and three years provide re-chartering upside. Danaos is uniquely positioned to capitalize on the strength of our balance sheet to pursue this type of growth opportunity, and we are firmly committed to continuing to take actions to create value for our shareholders.”

Earlier this month, Danaos said it had exercised its option to acquire the remaining 51% equity in its joint venture Gemini Shipholdings Corporation, adding five containerships with an aggregate capacity of 32,531 TEU to its feet.

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