Knightsbridge Shipping Limited (“KSL” or the “Company”) (Nasdaq: VLCCF) is pleased to announce that it has entered into an agreement with RWE Supply & Trading GmbH, a wholly owned subsidiary of RWE AG (a major European energy company), for chartering out a total of 15 Capesize vessels on long term contracts.
The basis of the transaction is to employ the vessels on index linked contracts. The earning of each vessel is decided through a pre-agreed premium on top of the prevailing spot market (Baltic Cape Index 4 T/C), reflecting the better performance of the new generation Capesize vessels.
The vessels will be delivered over the coming five quarters starting first quarter 2015. The transaction is done on a “to be nominated” (“tbn”) basis where the Company will deliver vessels on a fairly evenly spread basis through until the first quarter of 2016. The duration of each charter contract is approximately five years.
KSL has an option to convert the floating rate into a fixed rate at any time and for any duration at a price to be agreed reflecting the market at the time.
The Company is pleased to be entering into a close relationship with RWE Supply & Trading GmbH, and believes the transaction will give the benefits of full time employment for the vessels, the opportunity for earnings to correlate with the market and the possibility to convert the floating contracts into fixed rate ones at a later stage.
The Board of Directors
Knightsbridge Shipping Limited
January 7, 2015