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DHT secures financing to fund two VLCC newbuilds

Crude oil tanker firm DHT has secured bank financing for the two 318,000 dwt VLCCs newbuilds scheduled to be delivered in July and September 2018 from Hyundai Heavy Industries.  

The financing will cover about 50% of the contract price with the remainder being financed by the company. 

In a briefing, DHT revealed that it does not intend to issue any stock to finance the two vessels. 

The financing has a five year tenor and its 20 year repayment profile is “in support of DHT's low cash break-even levels,” said the company.    

DHT estimates that the average cash break-even for each vessel to cover OPEX, interest and debt repayment to be about $16,800 per day. The bank financing has a margin of 250bps above LIBOR and 50% of the financing is structured as a revolving credit facility. 

DHT has hit the headlines in recent times as a war of words has escalated between the firm and Frontline, which has made efforts to buy DHT.

DHT said Frontline turned down an offer to meet its co-ceos after it rejected the revised takeover proposal from the Norwegian tanker company.

DHT said its board of directors had unaminously rejected Frontline’s revised offer of 0.8 Frontline shares for each DHT share describing it as “wholly inadequate and not in the best interests of DHT and shareholders”.

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