Markets take off

Feb 14 2014

There have been a few mega deals reported recently, as sellers look to cash in on a rising market and buyers seek to increase their fleets.

For example, Diamond S Shipping is negotiating to buy 10 MRs newbuildings from Metrostar, being built at SPP for $38.5 mill each. They are due for delivery between 2014-2016.

This deal is subject to Diamond S Shipping’s recently announced IPO successfully raising the cash. Up to $100 mill worth of common stock could be sold in the offering, led by Jefferies and by BA Merrill Lynch, it was believed.

The company owns 33 product tankers- 30 of which were said to be timechartered out at firm rates in the $16,000’s, before profit sharing, with many tied up through 2015. Many of the vessels were purchased in 2011, from cash-strapped Cido Shipping.

In another large deal, Stena Bulk/Stena Weco, together with partner Golden Agri Resources (GAR), is to buy six 17,000 dwt chemical tankers for a total of about $100 mill.

Golden Stena Weco, which is a joint venture between Stena Weco and GAR, will be responsible for the commercial management of the vessels.

The main aim of the investment is to ensure that Golden Stena Weco has the necessary resources to meet its own transport needs and, by means of efficient commercial and operational management, to make shipments profitable despite the current relatively low market levels, Stena said.

The tankers were built at Samho Shipbuilding in 2008-2009. They have been renamed ‘GSW Forward’, ‘GSW Fabulous’, ‘GSW Frontier’, ‘GSW Fortune’, ‘GSW Future’, and ‘GSW Fighter’ and will join the’ Golden Avenue’ and her sister the ‘Golden Adventure’ in the jointly owned fleet.

“With the new investment in this segment, we are entering a new chapter in our collaboration with Golden Agri-Resources. These tankers will transport chemicals and vegetable oils on an international basis”, said Erik Hånell, president and CEO of Stena Bulk and Stena Weco president.

Meanwhile, the OSG vessels thought to be under negotiation for a sale to Euronav are the VLCCs – ‘Overseas Kilimanjaro’, ‘Overseas McKinley’ and ‘Overseas Everest’, plus the Aframaxes ‘Overseas Yellowstone’ and ‘Overseas Yosemite’.

Other sales reported recently by broking sources include MISC’s 1999-built sisters ‘Bunga Melati 3’ and ‘Bunga Melati 4’, sold to Wilmar Tankers on private terms. They have been renamed ‘Melati 3’ and ‘Melati 4’ respectively.

Scorpio was believed to have sold the 2008-built Aframax ‘STI Spirit’ to interests connected with NG Moundreas for $31 mill and the 1997-built Suezmax ‘Al Dawha’ was said to have been sold to Eastern European buyers for $12.5 mill.

There was also plenty of activity reported in the newbuilding market this week.

Brokers reported that Navig8 had invested in five, plus three optional LR1s at STX and four, plus four options at SPP, all for 2016 delivery.

Greek-based Oceanbulk was said to have ordered two VLCCs at HHI for $97 mill each, also for 2016 deliveries and Neda Maritime was thought to have ordered two, plus one option, LR1s at Sumitomo for 2H15 deliveries.

Maersk Tankers confirmed that the two MRs it had on options at Sungdong have been converted into firm orders. These follow four orders placed earlier. All of the vessels are expected to be delivered in 2016-2017.

Morten Engelstoft, CEO Maersk Tankers, said; “We believe that the product segments have a reasonable chance of returning to attractive rates in the coming years and in order to stay relevant and attractive in these markets, we need to gradually renew our fleet to maintain a suitable average age.”

In the timecharter sector, Tsakos has confirmed a charter extension has been signed on a 2004-built Handysize for another 12 months.

The new charter extension commenced this month and is expected to generate gross revenues of about $6 mill during the period, TEN said without naming the vessel, or the charterer.

Concordia Maritime has signed an agreement with Shell Tankers Singapore covering the employment of the P-MAX tankers ‘Stena Penguin’ and ‘Stena Progress’.  The rate was not revealed.

Also reported fixed were the LR1s ‘Stena Chios’ and ‘Stena Chronos’ to Cape Tankers for 12 months’ trading at $14,250 per day each.

BP was thought to have fixed the VLCC ‘Maersk Sara’ for 15-16 storage duties for $25,000 per day.

Cargill was said to have fixed the MR ‘STI Opera’ for a four month timecharter at $19,000 per day and also took the MR ‘Ardmore Seavaliant’ for 12 months at $17,100 per day. These are confirmations of earlier reports.

Koch was thought to have extended the MR ‘Prisco Elizaveta’ for another 12 months at $14,850 per day.

In the Handysize sector, Trenaco was thought to have fixed the ‘Andreas’, ex ‘Atlantic Liguria’ for 12 months at $13,250 per day, while Shell was believed to have fixed the ‘Faquet’ for 12 months, option 12 months, for $12,500-$13,500, respectively.

Reported leaving the fleet was the 1993 VLCC ‘New Vitality’. No other details revealed. Another VLCC, the 1989-built ‘Sri Qadriah 1’ was believed committed to unknown breakers for $430 per ldt on the basis of ‘as, is’ Singapore.

The 1994-built Handysize ‘Breeze A’ was said to have been sold to breakers on the basis of ‘as, is’ Nakhodka.

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