Danaos Corporation Announces $1 Billion in Incremental Contracted Revenues and Sale Proceeds Through New Charter Arrangements for 11 Vessels and the Agreement to Sell 2 Vessels
Danaos Corporation, one of the world’s largest independent owners of containerships, announced that it has entered into new charter arrangements for 11 of its vessels ranging between 2,500 to 10,000 TEU with major liner companies, that significantly improve cash flow visibility and charter coverage. These charters, which have a revenue weighted average contract duration of 4.7 years commence on the expiration of the vessels’ existing charters between February 2022 and April 2023 and extend up to May 2028.
The new charters increase the Company’s contracted revenue backlog by approximately $870 million, or by approximately $700 million in contracted EBITDA. Inclusive of these charters, total contracted operating revenue was $2.8 billion as of December 31, 2021, with a remaining average contracted charter duration of four years, weighted by aggregate contracted charter revenue. Additionally, contract coverage in terms of operating days is now 95% for 2022, 77% for 2023 and 57% for 2024.
The Company has also entered into an agreement to sell two 20-year-old 6,422 TEU vessels for a total consideration of $130 million and are expected to be delivered to their buyer in November 2022. The Company acquired these two vessels as part of the consolidation of Gemini Shipholdings Corporation on July 1, 2021, based on a fair value of $73 million, and expects to book a healthy profit when the sale is completed.
The Company’s CEO, Dr. John Coustas commented:
“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. We will continue to work to maximize our profitability and secure more accretive transactions with a focus on creating value for our shareholders.”
Aon and Willis Towers Watson (WTW) Take Important Step Toward the Close of Proposed Combination with Agreement to Sell Set of WTW Assets to Gallagher
Aon plc (NYSE: AON) and Willis Towers Watson (NASDAQ: WLTW) announced they have signed a definitive agreement to sell Willis Re and a set of Willis Towers Watson corporate risk and broking and health and benefits services to Arthur J. Gallagher & Co. (Gallagher). These businesses will be divested for a total consideration of $3.57 billion.
The agreement resolves questions raised by the European Commission and is intended to address certain questions raised by regulators in certain other jurisdictions. Aon and Willis Towers Watson continue to work toward obtaining additional regulatory approval in all relevant jurisdictions, including the United States, where regulators are conducting an independent review of the Aon and WTW combination.
“This agreement demonstrates strong momentum on the path to close our proposed combination with Willis Towers Watson,” said Greg Case, Aon’s CEO. “We’ve used this time to align our future leadership team around a one-firm culture that will create new opportunities for colleagues, accelerate innovation on behalf of clients and deliver shareholders the long-term value creation they have come to expect from our team.”
Aon remains positioned to further build on the firm’s track record of over a decade of progress on key financial metrics and achievement of external commitments. The pending combination with Willis Towers Watson is expected to deliver:
Revenue growth, margin expansion through delivery of better solutions, increased cash flow and earnings growth and a strong balance sheet, to generate attractive returns for shareholders in the future.
$800 million of cost synergies1, taking into account this divestiture and other potential remedies.
Allocation of any divestiture proceeds according to Aon’s ROIC framework, in which the firm expects that share buyback will continue to be its highest return activity.
Accretion to adjusted EPS, reflecting the synergy potential of the combination, consistent with initially announced accretion projections in year three and over the long term.2,3
Aon and Willis Towers Watson continue to progress with their integration planning, most recently highlighted by the announcement of the future leadership team that, following the close of the combination, will collaborate to deliver new sources of value to clients and create new opportunities for colleagues.
“We announced this combination knowing that the complementary capabilities of our two firms would allow us to deliver more value to clients and opportunities for colleagues. The events of the last year have only reinforced that rationale, and this announcement is an important step toward realizing that potential,” said John Haley, Willis Towers Watson’s CEO. “We appreciate the extraordinary value these colleagues have delivered to our clients and our company. We are confident they have a bright future at Gallagher.”
Gallagher is a global leader in insurance, risk management and consulting services – generating more than $6 billion in 2020 revenue. The company is headquartered in Rolling Meadows, Ill. and has more than 34,000 employees in 56 countries.
Gallagher has agreed to purchase a group of businesses from Willis Towers Watson that includes:
Willis Re operations globally, excluding operations in mainland China and Hong Kong;
Global cedent facultative reinsurance, excluding operations in mainland China and Hong Kong;
Corporate Risk and Broking business unit known as Inspace globally and certain business undertaken for Aerospace Manufacturing clients;
Corporate Risk and Broking services in certain countries in Europe (France, Germany, the Netherlands and Spain), excluding Affinity; Bermuda; cyber in the UK; and certain accounts in the Houston and San Francisco offices in the U.S.;
Corporate Risk and Broking services for Property & Casualty and Finex insurance in the European Economic Area, UK, U.S., Brazil and Hong Kong relating to certain large multinational companies headquartered in France, Germany, the Netherlands and Spain;
Corporate Risk and Broking Finex accounts relating to certain large multinational companies headquartered in the UK; and
Health & Benefits business units in France, Spain and Germany.
The transaction with Gallagher is contingent on the completion of the pending Aon and Willis Towers Watson combination, as well as other customary closing conditions. While Aon and WTW are working to complete their combination as soon as possible during the third quarter of 2021, the completion remains subject to the receipt of required regulatory approvals and clearances, including with respect to United States antitrust laws, as well as other customary closing conditions.
1 There are various material assumptions underlying the synergies, which may result in the synergies and other cost reductions being materially greater or less than estimated. The estimates should therefore be read in conjunction with the bases and assumptions for these synergy numbers, which are set out in Appendix I of the Rule 2.5 Announcement made on March 9th, 2020, along with the reports accompanying such statements in Appendix 4 and Appendix 5 to the Rule 2.5 Announcement.2 This statement should not be construed as a profit forecast or interpreted to mean that the profits or earnings of Aon will necessarily match or be greater than or be less than those for the relevant preceding financial period or any other period.3 Statements in this announcement that the combination of Aon and Willis Towers Watson is accretive to adjusted EPS should not be interpreted to mean that Aon earnings per share in the current or any future financial period will necessarily match or be greater than or be less than those for the relevant preceding financial period.