The South Korean shipping company Hyundai Merchant Marine negotiated 20% cut in five chartered container ships from Capital Product Partners, as part of the ongoing restructuring program. The daily charter rates of the post-panamax carriers Hyundai Prestige, Hyundai Paramount, Hyundai Premium, Hyundai Platinum and Hyundai Privilege was reduced from 29,350 USD to 23,480 USD for three-year period. The re-agreed charter is commencing this month until the end of December 2019. Hyundai Merchant Marine will reduce its costs by 37 million USD in result from the charter rates reduction, which is very important for the restructuring of the finance troubled shipping company.
The five container ships are chartered until 2025 and after expiration the discounted agreement, the charter rates will return to previously agreed dayrate. Capital Product Partners will be compensated for the exchanged rate cuts, which will be either Hyundai Merchant Marine shares or unsecured loan to shipping company for 37 million USD, which will accrue 3% interest per annum plus any other amounts to be determined.
“While the impact of the HMM vessels’ charter rate reduction will adversely affect our cash flows until the end of 2019, when the charter rate under the respective charter parties is expected to be restored to the original rate, we believe that the reduced charter rate and the charter reduction compensation that we expect to receive represents a more favorable outcome given the alternative employment opportunities in the current depressed container charter market”, said the CEO and CFO of Capital Product Partners, Jerry Kalogiratos.
The concerned container ships of Hyundai Merchant Marine are post-panamax carriers Hyundai Prestige, Hyundai Paramount, Hyundai Premium, Hyundai Platinum and Hyundai Privilege. The vessels are sisters with overall length of 255.40 m, moulded beam of 37.40 m and maximum draft of 10.00 m. The deadweight of the ship is 63,010 DWT, gross tonnage of 52,467 GRT and capacity for 5,023 TEU.