MPC Container Ships (MPCC) has revealed one of its boxships has been declared a constructive total loss (CTL) - and that it will use the insurance payout to fund new scrubber retrofits.
The Oslo-listed company said the 1,341-teu AS Fortuna (built 2009), entered with the UK P&I Club, grounded in September 2018. It is lying off Ningbo, China.
Insurance cash amounts to $6.5m, while it has also banked another $1.8m from selling the ship.
This will be put towards a $17m bill for fitting scrubbers to five boxships owned by subsidiary MPC Container Ships Invest (MPCCSI).
The parent is also supplying the rest of the money as equity worth $8.7m.
The work will be done by 31 January, 2020.
Bond waiver needed
As a result, MPCCSI is seeking a waiver from holders of its senior secured $200m bonds maturing in 2022.
It has called a bondholders meeting in Oslo for 5 July, at which a two-thirds majority is needed.
Bond terms currently stipulate that the proceeds from a CTL be applied either towards redemption of the bonds or for reinvestment in additional ships.
The scrubbers will automatically become part of the transaction security when the installations have been completed.
MPCC said: "The vessels which will be equipped with scrubbers will become more attractive for charterers and are expected to generate higher charter earnings.
"The parent supports the expected total scrubber investments of approximately $17m by providing equity of approximately $8.7m to partly finance the acquisition and installations of scrubbers."
