China Development Bank Financial Leasing (CDB Leasing) has emerged as the buyer of two LNG carriers from Norway’s Awilco LNG.
The Hong Kong-listed lessor is paying a total of $200m for the 156,000-dwt tri-fuel diesel-electric WilForce and WilPride (both built 2013), according to a regulatory filing.
Awilco LNG has agreed to take the duo back on lease for a total of 144 months, or 12 years, for total lease payments of $117.8m, CDB Leasing said.
The company has the option to buy them back upon expiration of the lease period for a price not exceeding $44m, the lessor added.
CDB Leasing assesses the ships as worth around $300m combined.
The WilForce is on a $150,000 per day time charter to Osaka Gas in Japan for 18 months, while the WilPride has a three-year deal for a $26m lump sum with a European charterer.
The Norwegian shipowner informed investors late last year that it had agreed a fresh sale-and-leaseback deal for the two ships.
However, it failed to disclose the identity of the counterparty, describing it only as a “major leasing company based in Asia”.
On Friday, the owner said the new facility bears a longer amortisation profile and a longer tenor.
The floating interest rate structure also has a lower margin, all of which “substantially” reduces Awilco LNG’s running costs and cash breakeven level.
The company will book the remaining capitalised expenses related to the previous financing in the first quarter of 2024.
This is compensated for by the $10,000 per day reduction in cash breakeven with the new financing for each ship.
Chief executive Jon Skule Storheill said: “We are pleased to mark the start of our long-term relationship with CDB Leasing with this transaction and are at the same time pleased to see our finance cost improve and support the company’s commercial strategy.”
Last December, Awilco LNG exercised purchase options for the two ships from another Chinese leasing company, CCB Financial Leasing, which had originally acquired them in January 2020 for $175m each, with 10-year bareboat charters back at $45,000 per day.
This is CDB Leasing’s first confirmed sale-and-leaseback deal involving ships in more than a year, based on disclosures to the Hong Kong Stock Exchange.
The last ship-related transaction it completed was in March 2023, when it acquired two LNG carriers from Peter Livanos-backed GasLog and GasLog Partners.
It agreed to acquire the 155,000-cbm GasLog Saratoga (built 2014) and GasLog Sydney (built 2013) for a combined total of $284m.
GasLog and GasLog Partners agreed to lease back the GasLog Saratoga and GasLog Sydney, respectively, under five-year deals with no purchase option or obligation, but including a profit-share mechanism.
While CDB Leasing is expanding its exposure to the LNG market, the sector makes up only a minor part of its fleet. The group had 262 ships in operation at the end of 2023.
