Top Ships Inc. has finalized a $207 million sale‑and‑leaseback financing that covers its two 300,000‑dwt VLCCs (M/T Julius Caesar and M/T Legio X Equestris), its 157,000‑dwt Suezmax (M/T Eco Oceano CA), and its 50,000‑dwt MR product tanker (M/T Eco Marina Del Ray). The deal was arranged with a major Chinese financier whose identity has not been disclosed publicly. Gross proceeds of $27.2 million, after fees and related expenses, were earmarked to repay existing debt and provide working capital, giving the company a fresh liquidity cushion.
Under the bare‑boat charter terms, Top Ships will lease the VLCCs and Suezmax for ten years and the MR tanker for seven years, paying monthly installments of $0.25 million for each VLCC and $0.18 million for the MR and Suezmax. At the end of each lease, purchase obligations of $38.5 million per VLCC, $20.0 million for the Suezmax, and $13.0 million for the MR tanker will be due. The financing carries an interest rate of 3‑month SOFR plus 1.95 % per annum, and Top Ships has committed guarantees for the obligations of its subsidiaries and Rubico Inc., creating a cross‑default risk that will be monitored closely.
The transaction leaves the company’s leverage ratio at roughly 52 %, unchanged from the prior period, indicating a stable debt structure while freeing up capital for operational needs. The cash infusion supports Top Ships’ broader strategy of fleet expansion and diversification into new markets, aligning with its focus on modern, fuel‑efficient “ECO” tankers.
Top Ships’ management highlighted that the sale‑and‑leaseback is a key step in improving liquidity and maintaining a conservative leverage profile. The company’s history of similar transactions—such as the February 2024 sale‑and‑leaseback of the Julius Caesar and Legio X Equestris—shows a recurring strategy to convert asset ownership into secured financing when market conditions are favorable.
While the refinancing strengthens the balance sheet, the cross‑default provision tied to Rubico Inc. introduces a contingent liability that could trigger a default if Rubico faces financial distress. Additionally, the tanker market remains volatile, with freight rates fluctuating and new environmental regulations increasing operating costs. Nonetheless, the deal positions Top Ships to capitalize on favorable market conditions and pursue growth opportunities while maintaining a disciplined debt profile.
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