NYSE-listed Ardmore Shipping has agreed a $64m senior secured term loan with Credit Agricole Corporate and Investment Bank to help reduce its finance costs and improve surplus cash flow.
Some $39m of the new loan will be used to refinance two existing vessels. The remaining $25m commitment will provide additional financing.
Since 2016 began, Ireland-based Ardmore has refinanced a total debt of $408m and has extended its loan maturities to 2022, which it says will provide flexibility and “additional borrowing capacity to support accretive growth”.
The refinancing is expected to reduce Ardmore’s interest expenses by around $2.2m during 2016 and improve its surplus cash flow by approximately $6.7m this year.
“This completes the current phase of refinancing and positions the company for continued growth by increasing our financing capacity, while at the same time decreasing our cost of capital,” Anthony Gurnee, Ardmore’s CEO, said in a release today.
“We are firmly committed to both building and returning value to our shareholders. As a central component of that approach, we pay out 60% of earnings from continuing operations each quarter in the form of a dividend. By linking the dividend directly to our earnings, we have increased our fourth quarter dividend by 30%, and increased our total dividend payment by 120% since introducing the policy in third quarter 2015.”
Gurnee added that Ardmore expects the MR product tanker market, in which the company specialises, to remain “strong” throughout 2016 and beyond.
