Mosvold Orders Two Newbuildings, Arranges Shipping Spinoff with Progress

In a major restructuring move, Mosvold Shipping has transferred all of its shipping interests to Danish affiliate D/S Progress. A forthcoming Extraordinary General Meeting of Progress will be asked to vote on a proposal involving the sale of ships for shares. Under the terms of the deal, Mosvold will transfer its shipping interests to Progress, against the payment of shares in the Danish company. Progress will thus take control of key Mosvold shipping investments, notably the entire capital of the English joint-stock companies Thornhope Shipping, and the group’s technical management company, Hudson Steamships. The company will also increase its stake in Nor-OBO Shipping from 20.4% to 53.1%.

The Mosvold spin-off will add an additional 262,000 dwt to the Progress fleet. The ships to be transferred from Norwegian management include five multi-purpose vessels, ranging from 15,000 to 22,000 dwt, and three handy sized bulk carriers all owned by Nor-OBO, and two bulk carriers and a multipurpose vessel owned by Thornhope. Most of the ships are trading on the spot market. The 24,700 dwt bulk carrier Mosbay has been sold recently to make way for two newbuildings just ordered at the Daewoo shipyard in South Korea. The 66,000 dwt vessels, which will cost $28.1m each, are scheduled for delivery in October 1992. Continue Reading

GE Loan Brings Soviet Ships To Light

In an international ship financing coup, General Electric Capital Corp. has broken into the Soviet market with a deal to finance three new product tankers for AKP Sovcomflot.  GECC is providing a $60.9m loan for three double hull tankers, each with a capacity of 47,000 dwt. The first mortgage financing will cover 60% of the cost of the new ships, which are being built at Halla Engineering and Heavy Industries in South Korea. The ships are part of a series of eight vessels. Five were built with other financing.

The loan is to a subsidiary of Fiona Trust and Holding Corp., the offshore flag subsidiary of Sovcomflot which has over 80 ships in its fleet. The loan is secured by first mortgages on the three tankers which are owned by single shipowning subsidiaries of the borrower.   Continue Reading

Fednav Expands with Houston Takeover

The Montreal based dry bulk operator Fednav has bought a controlling interest in Texas American Shipping Corp. (TASC) of Houston, which is mainly involved in contract and industrial shipping. Using chartered tonnage, TASC specializes in the carriage of project cargoes between the US Gulf Coast and the Middle East and Southeast Asia and West Africa. Fednav also has a strong portfolio of industrial shipping business, and was the first company to transport railway equipment for the channel tunnel. However, it is known for shipping bulk cargoes from the Great Lakes to Europe on a semi-liner basis.    Continue Reading

Greek Reefer Owner Buys Shipyard

In a remarkable commitment to the reefer trades, the Greek Restis Shipping Group has bought the Perama shipyard, with a view to transforming it into a specialist reefer repair facility. The yard, currently run by Hellenic General Enterprises Co., is capable of accommodating vessels of up to 120,000 dwt for repairs and conversion work. It has also had a minor involvement in shipbuilding, producing small craft such as ferries and fishing boats.    Continue Reading

Container Carriers Think Twice About New Orders

Uncertainty about trade growth and concern about a review of shipping policy in the US is resulting in some container carriers holding back on orders for new ships.  A presidential commission in the United States is investigating the effect of the Shipping Act of 1984 and has heard several witnesses call for elimination of the immunity from anti-trust laws which make it possible for steamship lines in the US to set prices in conferences.

Conrad Everhard, the chairman of Cho Yang Line (USA) who is a member of the commission, says uncertainty about the complexion of the US liner business is making some companies cautious about ordering ships even though their fleets are aging. The average container ship is 15 years old, he says, but some owners are holding back to see what happens in the US before making orders. Continue Reading

Claims Surge and Market Contraction Send Owners Premiums Soaring

The abrupt rise in insurance costs this year has come as a nasty shock to shipowners, after the traumas of the Gulf crisis.  In many cases, premiums for both hull and liability insurance have shot up by well over 100%, and not just for the high risk owners with “rust buckets.”   Reputable companies with strong fleets and sound credentials are also being hard hit. For example Troodos Shipping, one of the world’s largest and most respected tanker owners, is paying an additional $7m on its entire fleet.  With 40 ships, the additional cost per ship is $175,000.  Director Polys Haji-Ioannou told Marine Money that the company’s insurance premiums have risen by 100% during the current year.

Most of the renewals on the Bergesen fleet are not due for about another year, as Norway’s premier tanker operator has negotiated long term cover.  However, the company is bracing itself for hefty price increases.  Its premium calls from P&I Clubs have risen by up to 100%, and a spokesman for the company told Marine Money that, if present trends continue, insurance could be the biggest component of operating costs in the near future.  At present, crewing accounts for the largest proportion.  One owner contacted by Marine Money said that people were lucky to get away with 100% rises, and that 150% was commonplace. Continue Reading

Chemteam Packs Up After Financial Problems

The lifespan of the ill-fated Chemteam Tanker has come to an end after just over a year’s trading. Managing director Per Hahn told Marine Money, “We have decided to cease trading, following losses sustained during the poor markets, and in view of the uncertain prospects ahead. We are anxious to ensure an orderly dissolution of the business because, if we continue, there is a danger that the company could go down the drain. The company is in the process of completing voyages and discharging cargoes.”

Chemteam was set up in 1990 as a chemical tanker venture by Hahn and Alan Milligan, both former executives with Stolt Nielsen. However, the controlling owners are the Norwegian chemical tanker group, Arnt J. Morland, Cob Shipping of Canada and Seapartners. The company shot to prominence with plans to buy 12 ships from Greek owner Adriatic Tankers for $140m. But the deal was never consummated, and Chemteam opted for chartered tonnage instead. With the exception of the 22,000 dwt Orkanger, the six ship fleet now consists entirely of ships of around 10,000 dwt. They include two Russian controlled vessels built in Spain and directly owned by Cypriot domiciled companies. Two of the vessels have been covered by contracts of affreightment, but most have been exposed to the disastrous spot market for petrochemicals, which may have contributed to the company’s early demise. Continue Reading

$540m Venezuelan Newbuilding Program

A major newbuilding program has been launched by Petroleos de Venezuela (PDVSA), worth an estimated $540m. The new investment will involve the construction of eight new Aframax tankers to be  built at the South Korean yard of Hyundai Merchant Marine. The project is being 100% financed by a syndicated loan from four Japanese trading houses, headed by Mitsubishi Corp., for 12 years at the rate of LIBOR + 1.5% for the first five years, with a slight increase thereafter. Mitsubishi’s George Kasei told Marine Money, “The facility is a floating rate loan, with the mortgages secured on an assignment of freight and the 86,000 dwt vessels. The dollar loan, including principal and interest, will be fully paid out at end of the loan period.” The actual borrower is a newly formed PDVSA subsidiary, Venfleet, registered in Bermuda, with payments guaranteed by the parent company.
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Sabine, Valley Line on the Block

Sequa Corp. has put up for sale its Valley Line inland barge subsidiary and Sabine Towing and Transportation Co., a US flag operator of tankers and tanker barges.

Reportedly, Sabine may have been put on the market because of concerns about unlimited liability being imposed by some states on carriers in the event of an oil spill. There is said to be interest by at least a half dozen companies in Sabine, with owners hoping to form relationships with customers that could be kept in place if they order new, double skin tonnage.  Continue Reading

OPA Concerns Curb Sale and Purchase Activity in Tanker Market

The implications of OPA 90 and concern over vessel quality have curtailed sale and purchase activity in the tanker market. In the latest report published by PF Bassoe A/S, the Norwegian shipbrokers note that prices are some 20% lower than before the outbreak of the Gulf crisis, despite the high level of earnings during the past year and the generally positive outlook for the future. According to Bassoe, the main reason lies in the fear of pollution liability, represented by OPA, and the possibility of substantial expenditures required to bring ships up to an acceptable standard, has inhibited buyers.

A Bassoe spokesman told Marine Money, “The problem with older vessels is that, after one fault has been rectified, another tends to arise. This view was echoed by Eric Andersen, head of the RS Platou Economic Research Unit, who said that the older ships were taking longer to sell because of technical concerns in the light of OPA legislation. Moreover, he indicated it was unlikely that owners looking for tanker tonnage would switch their attentions to other ships, as has been suggested.  Continue Reading