Rubico expands MR tanker newbuilding programme through Top Ships agreement
Rubico Inc. has entered into an agreement to acquire two companies holding shipbuilding contracts for MR chemical and product tankers from related-party Top Ships Inc., expanding its planned fleet and its portfolio of long-term charter commitments.
The two vessels, each with a deadweight capacity of 47,499 tonnes, are under construction contracts with Guangzhou Shipyard International and China Shipbuilding Trading. They are scheduled for delivery in the fourth quarters of 2028 and 2029, respectively, and have secured time charter employment with Trafigura Maritime Logistics.
Each charter has a firm duration of seven years from vessel delivery, with options available to Trafigura to extend the employment period by a further four years. According to Rubico, the two contracts represent approximately $150.9 million in potential gross revenue, including the optional extension periods.
The acquisition involves the purchase of 100% of the shares in two special purpose companies for an aggregate consideration of $14.5 million. Payment may be made in cash or, at Rubico’s discretion, partly or entirely through the issuance of Series G perpetual convertible preferred shares.
Completion is expected by March 31, 2027, subject to customary closing conditions.
Newbuilding financing and charter commitments
Both companies have arranged sale-and-leaseback financing with a major Chinese leasing institution, covering 85% of the instalment payments under their respective shipbuilding contracts. The initial $6.8 million shipbuilding instalment for each vessel has already been paid.
The financing arrangements carry interest at Term SOFR plus 1.80%. Following delivery, Rubico will make quarterly payments of $500,000 per vessel over ten years, with a final balloon payment of $18.2 million for each tanker.
Rubico and Top Ships will also provide corporate guarantees to the leasing company. The arrangements introduce continuing financing obligations alongside the vessels’ contracted charter income.
Because Top Ships is a related party, the acquisition was reviewed and approved by a special committee of independent and disinterested Rubico directors. The committee also obtained a fairness opinion from an independent financial adviser concerning the proposed consideration.
Potential charter backlog increases
Rubico estimates that, upon completion of the acquisition, its five MR tanker newbuildings will represent approximately $377.1 million in potential gross charter revenue, including available extension options.
When existing time charter commitments for its operating fleet are included, the company’s total potential gross revenue backlog would reach approximately $523.1 million, representing an increase of around 40%.
The figures include charter periods that remain subject to the charterers exercising their extension options and therefore should not be interpreted as fully guaranteed future revenue or profit.
The transaction forms part of Rubico’s strategy to expand its tanker operations through newbuilding investments supported by long-term employment agreements. The company currently operates two Suezmax tankers and holds interests in three MR tanker newbuildings, with the two additional vessels expected to join its development portfolio following completion of the proposed acquisition.
The agreement would increase Rubico’s exposure to the product tanker market while extending its future charter commitments. However, the company’s projected revenue backlog remains dependent on the completion of the acquisition, vessel deliveries and the performance and duration of the underlying charter contracts.
