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Danaos Corporation Announces $1 Billion in Incremental Contracted Revenues and Sale Proceeds Through New Charter Arrangements for 11 Vessels and the Agreement to Sell 2 Vessels
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Rhea-AI Sentiment
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Rhea-AI Summary
Danaos Corporation (NYSE: DAC) announced new charter agreements for 11 vessels, enhancing cash flow visibility and increasing the contracted revenue backlog by approximately $870 million. The charters have an average contract duration of 4.7 years and will commence from February 2022 to April 2023. Additionally, the company agreed to sell two older vessels for $130 million, expected to be delivered in November 2022. These strategic moves aim to strengthen liquidity and maximize shareholder value.
Positive
New charter agreements for 11 vessels increase contracted revenue backlog by approximately $870 million.
Average contract duration of 4.7 years enhances cash flow visibility.
Sale of two older vessels for $130 million indicates strong profit potential.
Negative
None.
ATHENS, Greece--(BUSINESS WIRE)--
Danaos Corporation (the "Company") (NYSE: DAC), one of the world’s largest independent owners of containerships, announced today that it has entered into new charter arrangements for 11 of its vessels ranging between 2,500 to 10,000 TEU with major liner companies, that significantly improve cash flow visibility and charter coverage. These charters, which have a revenue weighted average contract duration of 4.7 years commence on the expiration of the vessels’ existing charters between February 2022 and April 2023 and extend up to May 2028.
The new charters increase the Company’s contracted revenue backlog by approximately $870 million, or by approximately $700 million in contracted EBITDA. Inclusive of these charters, total contracted operating revenue was $2.8 billion as of December 31, 2021, with a remaining average contracted charter duration of four years, weighted by aggregate contracted charter revenue. Additionally, contract coverage in terms of operating days is now 95% for 2022, 77% for 2023 and 57% for 2024.
The Company has also entered into an agreement to sell two 20-year-old 6,422 TEU vessels for a total consideration of $130 million and are expected to be delivered to their buyer in November 2022. The Company acquired these two vessels as part of the consolidation of Gemini Shipholdings Corporation on July 1, 2021, based on a fair value of $73 million, and expects to book a healthy profit when the sale is completed.
The Company’s CEO, Dr. John Coustas commented:
“We are very pleased to announce the continued improvement of our contracted backlog with multi-year charters for 11 of our vessels and the profitable sale of two older vessels. The combined result is up to $1 billion of contracted revenue accretion and sales proceeds. These transactions significantly improve our liquidity and cash flow visibility for the next several years and further strengthen our balance sheet. We will continue to work to maximize our profitability and secure more accretive transactions with a focus on creating value for our shareholders.”
About Danaos Corporation
Danaos Corporation is one of the largest independent owners of modern, large-size containerships. Our current fleet of 71 containerships aggregating 436,589 TEUs ranks Danaos among the largest containership charter owners in the world based on total TEU capacity. Our fleet is chartered to many of the world's largest liner companies on fixed-rate charters. Our long track record of success is predicated on our efficient and rigorous operational standards and environmental controls. Danaos Corporation's shares trade on the New York Stock Exchange under the symbol "DAC".
Investor Relations and Financial Media:
Rose & Company New York Tel. 212-359-2228
E-Mail: danaos@rosecoglobal.com
Source: Danaos Corporation
FAQ
What is the significance of Danaos Corporation's new charter agreements?
Danaos Corporation's new charter agreements for 11 vessels are significant as they increase the contracted revenue backlog by approximately $870 million, providing improved cash flow visibility.
When will the new charters for Danaos Corporation commence?
The new charters will commence between February 2022 and April 2023.
How much revenue is expected from the sale of the two vessels?
The sale of the two older vessels is expected to generate $130 million.
What is Danaos Corporation's ticker symbol?
Danaos Corporation's stock is traded under the ticker symbol DAC on the New York Stock Exchange.
What is the contracted revenue backlog of Danaos Corporation as of December 31, 2021?
As of December 31, 2021, Danaos Corporation's total contracted operating revenue was approximately $2.8 billion.
