Sale – Leaseback with a Twist

Last November, NewLead Holdings Ltd concluded a sale-leaseback transaction with Lemissoler Maritime Company W.L.L. (“Lemissoler”) which involved the sale of four dry bulk vessels, including three Capesize bulkcarriers, the Brazil (built 1995), the Australia (built 1993) and the China (built 1992) as well as the Panamax, Grand Rodisi (built 1990). Total consideration for the sale was $86.8 million, based upon a sales price of $94.3 million less the sellers’ credit of $7.5 million. The bareboat charter-back is for eight years with a step-down payment structure. For months 1-36, the charter hire for the four vessels is $1,216,000 net per month ($39,978/day) which becomes $729,600 net per month ($23,987/day) for months 37-96. For accounting purposes, the transaction is treated as a capital lease.

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