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Danaos Stock Gains On New Charter Arrangements

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  • Danaos Corp (NYSE: DAC) has entered into new charter arrangements for 11 vessels ranging between 2,500 to 10,000 TEU with major liner companies.

  • These charters have a revenue weighted average contract duration of 4.7 years, commencing on the expiration of existing charters between February 2022 and April 2023 and extending to May 2028.

  • The new charters increase Danaos' contracted revenue backlog by ~$870 million or ~$700 million in contracted EBITDA. Inclusive of these charters, the total contracted operating revenue was $2.8 billion as of December 31, 2021.

  • Contract coverage in terms of operating days is now 95% for 2022, 77% for 2023, and 57% for 2024.

  • The company also agreed to sell two 20-year-old 6,422 TEU vessels for $130 million and are expected to be delivered to their buyer in November 2022.

  • "We are very pleased to announce the continued improvement of our contracted backlog with multi-year charters for 11 of our vessels and the profitable sale of two older vessels. The combined result is up to $1 billion of contracted revenue accretion and sales proceeds. These transactions significantly improve our liquidity and cash flow visibility for the next several years and further strengthen our balance sheet," said CEO John Coustas.

  • Price Action: DAC shares are trading higher by 6.58% at $78.92 on the last check Tuesday.

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