NYSE-listed Danaos Corp has launched a new joint venture to acquire second-hand container ships at the bottom of the cycle.
The joint venture, Gemini Shipholdings, is 49% owned by Danaos and 51% owned by Danaos founder Dr. John Coustas. Danaos paid USD7.35 million for its Gemini stake.
Gemini has acquired three container ships at “attractive discounts to market values”, said Danaos on 23 September. The three vessels are the 6,422 teu, 2001-built NYK Lodestar; the 5,610 teu, 2002-built Suez Canal; and the 5,544 teu, 2002-built Genoa.
The NYK Lodestar was acquired from NYK and has been chartered back to the Japanese carrier for two years “at an above-market rate”, said Danaos. Both the Suez Canal and Genoa were taken by Gemini on seven-year bareboat charters with a purchase obligation at the end of the employment period.
Danaos has the right to purchase the remaining 51% interest in Gemini at fair market value after 31 December 2018, or earlier if its credit agreements permit.
According to Coustas, the Gemini joint-venture structure “will allow Danaos to resume its growth strategy as weakness in the container-ship market presents compelling value”. He emphasised that the Gemini platform allows for acquisitions “without diluting our shareholders”.