I.M. Skaugen ASA has confirmed its decision to order two more LPG/E vessels of 10,000 cbm size at the Hudong- Zhonghua yard in China.. A final agreement with the Hudong-Zhonghua yard has been signed and is now only subject to our final confirmation, that we and our partner GATX Capital Corporation (www.gatxcapital.com), are satisfied with details in the final financing arrangements. The vessels will cost USD 21.5 mill each and will be delivered during 1H03. This brings the total number of newbuildings for the joint venture to six vessels totalling 54,000 cbm. This will increase the NGC fleet of ethylene carriers by about 54% when all units are delivered in 2003.
The project is fully financed and with 15% equity to be paid. The weighted average cash cost of capital for this new project, including all the related risk capital, but excl. the possible dilution cost for the IMS equity, is estimated by us to be approx. 7.18%. The cost of dilution to the IMS shareholders due to a convertible bond to be sold is estimated to be 3% against a valuation based on the book value of the IMS shares.
The IM Skaugen ASA group expects an overall improvement in earnings in 2Q01 compared to the earnings level for the group over the prior 6 months period. The earnings improved in SPT and with a corresponding reduced cost of operation in all our business segments enable us to record a substantial improvement in the net results compared to 1Q01. The Group now expects that the EBITDA earnings of 2Q01 will be about MUSD 4 mill higher than the EBITDA earnings level for 1Q01. The EBITDA earnings for 1Q01 were reported at MUSD 5 and with a corresponding net loss for the Group of MUSD 0.2 in 1Q01. Total EBITDA result for 2Q01 is thus expected to be about MUSD 9 and with a total estimate of an EBITDA result of MUSD 14 for the 1H01. The EBITDA earnings for the full year of 2000 were recorded at MUSD 24.3 and 1H00 EBITDA at MUSD 11.3.