LC Logistics (02490) has signed a series of agreements to monetise and charter back a 14,000 TEU container ship (Hull H2871) via a sale-and-leaseback structure, classifying the transaction as a major disposal under Hong Kong Listing Rules.
Deal structure • Bal Container Line, an indirect subsidiary, will assign its shipbuilding contract to Tianjin Green Ocean-V Leasing (SPV of China Development Bank Financial Leasing). • Total consideration capped at the lower of 70% of the contractual purchase price (US$144.80 million) or 60% of market value. Based on an independent valuation of US$170.59 million, the final consideration is US$101.36 million. • LC Logistics’ unit BAL Athena Shipping will bareboat-charter the vessel for 120 months, paying quarterly fixed hire equal to 1/40th of the amount exceeding a 30% “Balloon” plus variable hire at SOFR + 2.0%. • A purchase obligation requires LC Logistics to buy back the vessel at lease expiry for the outstanding Balloon (30% of owner’s costs) and any remaining balance; purchase options are available after delivery with step-down fees.
Financial impact • The disposal will be accounted for as a financing transaction; no gain or loss will be recorded. • Both total assets and total liabilities are expected to rise by approximately US$101.36 million. • Net proceeds: US$86.88 million to pay the shipyard’s remaining construction cost and US$14.48 million for working capital.
Security package • A standby charter allows the parent company to assume charter obligations if necessary. • Charterer’s Assignment and Manager’s Undertaking provide additional security over insurance, earnings and vessel management.
Shareholder approval • Majority shareholders holding 55.39% of issued shares (including Lecang Altitude, Lecang Fantasy, Glorious Sailing, Lecang Shining and Lecang Flourishing) have given written approval, satisfying Listing Rule 14.44; no general meeting will be convened.
Rationale The Board states the transaction provides cost-effective financing, optimises capital structure, preserves operational control of the vessel during the 10-year charter, and secures repurchase rights.
Timing Delivery of the vessel and commencement of the bareboat charter are expected immediately after handover from Jiangnan Shipyard, targeted for 28 July 2026. The sale-and-leaseback remains subject to customary conditions precedent.