Danaos announced that it has exercised its option to acquire the remaining equity interests in its joint venture Gemini Shipholdings Corporation (“Gemini”). The purchase price for the 51% of Gemini not already owned by the Company is $86.7 million in cash, while the net cash outflow for the Company will be approximately $72.3 million, which is the purchase price net of $14.4 million of the Gemini cash balance on June 30, 2021.
Gemini owns a fleet of five containerships, with an aggregate capacity of 32,531 TEU, each of which is employed on a time charter. Contract coverage for the Gemini vessels stands at 100% for the next 12 months while the weighted average contract duration of the Gemini fleet is 3.8 years, weighted by contracted revenues.
Upon completion of the acquisition, the Company will own 100% of Gemini and consolidate Gemini within its financial results. The consolidation of Gemini will increase the Company’s contracted revenue by approximately $160 million and the Company’s contracted EBITDA by approximately $117 million in total. For the next 12 months, all of Gemini’s vessels are employed on time charters and expected to contribute contracted EBITDA of $31 million through June 30, 2022. Gemini’s total debt and net debt, which will be assumed and consolidated by the Company, was $45 million and $30.6 million, respectively, as of June 30, 2021.
Gemini has a solid credit and business profile with a Net Debt / NTM EBITDA ratio of 1x and strong contract coverage which provides significant stability and visibility.
Clarksons Platou Securities acted as financial advisor to an independent committee comprised solely of independent and disinterested members of the Company’s Board of Directors, which approved the transaction.