SOURCE: Danaos Corporation

November 29, 2006 16:05 ET

Danaos Enters Into Agreement to Acquire Three Containerships Expanding Its Fleet to 31 Vessels

Vessels to Be Time Chartered by A.P. Moller-Maersk Group for Five Years

ATHENS, GREECE -- (MARKET WIRE) -- November 29, 2006 -- Danaos Corporation (NYSE: DAC) today announced that it has signed contracts to acquire three 4,814 TEU vessels from A.P. Moller-Maersk Group. These vessels, the MC Kinney Maersk, the Mayview Maersk and the Madison Maersk, were delivered to A.P. Moller-Maersk Group from the Odense Staalskibsverft shipyards in 1991. Upon delivery to Danaos these vessels will be renamed to Maersk Marathon, Maersk Messologi and Maersk Mytilini respectively.

The acquisition cost will be $43.15 million per vessel and they are expected to be delivered to Danaos on December 11, December 17, and December 21, 2006 respectively. The acquisition will be financed through existing credit facilities and own funds. Subsequent to the acquisition of these three vessels, Danaos' total fleet will increase to 31 containerships aggregating 140,137 TEU. Furthermore, the company has on order 15 additional containerships aggregating 75,124 TEU with scheduled deliveries up to the end of 2009.

Danaos also announced that it has arranged five-year time charter agreements for all three vessels with A.P. Moller-Maersk Group at the rate of $23,450 per vessel per day. After the initial five-year time charter periods, A.P. Moller-Maersk Group will have four consecutive one-year options to re-charter each ship for $22,400 per day, $21,400 per day, $20,400 per day and $20,400 per day respectively.

Each new vessel is expected to contribute, in the first twelve months following acquisition, approximately $8.4 million in incremental revenues and approximately $6 million in incremental EBITDA. For this purpose, EBITDA, a non-GAAP measure, shall mean net earnings before interest, un-drawn credit facility fees, taxes, depreciation and amortization of deferred financing fees. All three vessels have already performed their five-year dry-docking planned maintenance in 2006.

"This acquisition marks a further step in our development," said Dr. Coustas, Chief Executive Officer of Danaos. "We are pleased to further expand our long standing relationship with A.P. Moller-Maersk Group, the largest carrier in our market. Given our operational track record, we feel confident that we will be able to operate these vessels in a very efficient manner. This acquisition will be immediately accretive to cash flow upon vessel delivery. Our detailed physical inspections of these vessels have verified the A.P. Moller-Maersk Group reputation for designing and building excellent vessels and maintaining them to a superior standard. Further, we believe these vessels to have improved re-chartering value as, due to their power regeneration systems, they have superior fuel saving capabilities. It is Danaos' plan to continue to grow our business through accretive acquisitions in order to grow our distributable cash flow and this acquisition demonstrates our commitment to our corporate goals. The 4,814 TEU vessel size perfectly fits into our fleet which is comprised by Panamax and Post Panamax size vessels."

About Danaos Corporation

Danaos Corporation is an international owner of containerships, chartering its vessels to many of the world's largest liner companies. Upon delivery of the three vessels that Danaos has agreed to acquire, its fleet will consist of 31 containerships aggregating 140,137 TEUs ranking Danaos among the largest containership charter owners in the world based on total TEU capacity. Danaos is the largest US listed containership company based on fleet size and market capitalization. Furthermore, the company has on order 15 additional containerships aggregating 75,124 TEU with scheduled deliveries up to the end of 2009. The company's shares trade on the New York Stock Exchange under the symbol "DAC."

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Contact Information

  • For further information please contact:

    Company Contact:

    Dimitri Andritsoyiannis
    Chief Financial Officer
    Danaos Corporation
    Athens, Greece
    Tel: +30 210 419 6481

    Iraklis Prokopakis
    Chief Operating Officer
    Danaos Corporation
    Athens, Greece
    Tel. +30 210 419 6400

    Investor Relations and Financial Media:
    Nicolas Bornozis
    Capital Link, Inc.
    New York
    Tel. 212-661-7566