Business Context and Reporting Period
This Form 6-K filing by Costamare Inc. (NYSE: CMRE) is dated January 24, 2011. The company is a leading owner and provider of containerships for charter, operating a fleet of 51 vessels with a total capacity of 256,972 TEU. The filing primarily announces the completion of financing for newbuilding contracts and the acquisition of three secondhand vessels.
Key Financial Metrics and Transactions
- Newbuild Financing: Finalized financing for three new containerships (approx. 9,000 TEU each) at a contract price of $95,080,000 per vessel.
- Charter Agreements: Time charter agreements secured with MSC for the newbuilds at a daily rate of $43,000 for ten years, commencing immediately upon delivery (scheduled between November 2013 and January 2014).
- Secondhand Acquisitions: Acquired three vessels using own funds:
- 2,020 TEU vessel (built 1991) for $7,500,000 (delivered Jan 7, 2011).
- 1,162 TEU vessel (built 1995) for $8,300,000 (expected delivery end of Jan 2011).
- 1,504 TEU vessel (built 1996) for $9,500,000 (expected delivery before end of March 2011).
- Recent Activity: Over the last four months, the company acquired a total of 10 vessels with a combined capacity exceeding 45,000 TEUs.
Material Changes and Outlook
The filing highlights significant fleet expansion and revenue growth potential. Management projects the three newbuild vessels will contribute approximately $460 million in contracted revenues. The company expects to charter the newly acquired secondhand vessels at rates comparable to younger tonnage based on their technical specifications and operational track record.
Management commentary indicates a strategy of significant but prudent growth, supported by the company's balance sheet, cash flow from operations, and access to undrawn credit lines and bank debt.
Risks and Contingencies
The press release includes a forward-looking statement disclaimer. Actual results may differ materially from anticipated results due to inherent uncertainties and factors outside the company's control. Investors are directed to the "Risk Factors" section of the company's Registration Statement on Form F-1 (File No. 333-170033) for a detailed discussion of risks.
Investor Verification Checklist
- Verify the specific terms and covenants of the financing arrangements with Chinese and European financial institutions.
- Confirm the delivery schedules for the three newbuild vessels and the three secondhand acquisitions.
- Review the "Risk Factors" in the Form F-1 Registration Statement regarding market volatility and charter rate sustainability.
- Assess the impact of the $25.3 million total acquisition cost for secondhand vessels on current liquidity and cash reserves.