South Korea’s SM Line has quashed talk that the company is quitting the liner business, although it acknowledged it is aiming to sell a trio of neo-panamaxes.
The containership newcomer said it is in the market to stay and is looking for the right partner and opportunity to expand its trade lanes.
Reports that SM Line has sold the neo-panamax trio have sparked market speculation that the South Korean company may be winding up its box business.
But an SM Line executive denied that the company has sold the 8,586-teu SM New York (built 2010), SM Norfolk and SM Savannah (both built 2011) to International Far Eastern Leasing Co of China for $100m.
Intent to sell
“The three containerships have not been sold. But we have the intention to sell them,” he said. “Our company hopes to profit from the increased asset value of boxships.”
SM Line acquired the trio two years ago from bankrupt Hanjin Shipping.
It bought the Hyundai Samho Heavy Industries-built neo-panamax containerships with the intention to deploy them on trades to the US East Coast. However, the trade loop requires at least 10 vessels to operate.
“The containership market was also not good, as a result we postponed the plan to launch the US East Coast service route,” the executive said.
He added that the looming IMO 2020 regulations is another reason that motivates it to sell the three boxships.
“To be compliant with the new IMO sulphur regulations, the containerships will need to be fitted with scrubbers and ballast water treatment systems. These are extra costs to the company,” said SM Line executive. “The future direction for the company is also to use larger ships of 10,000 teu to 12,000 teu for the US East Coast trade.”
Meanwhile, SM Line confirmed that it has sent two handysize containerships, the 1,641-teu SM Hochiminh (built 1998) and 1,620-teu SM Bangkok (built 1999), to the breakers. Cash buyer GMS was reported to have paid just over $6m for the duo.
“The sale of these two vessels was part of the company’s fleet renewal plan,” said SM Line. “We have replaced them with chartered vessels temporarily.”
Expansion plan
SM Line said the ultimate plan is to replace the pair with newbuildings or to acquire secondhand ships.
The company is the liner arm of Samra Midas Group, which also owns Korea Line Corp and Korea Shipping Corp, formerly Samsun Logix. It was established in 2017 and operates 21 containerships on intra-Asian and transpacific services.
Many of the vessels it owns or operates were formerly part of the fleet of collapsed South Korean operator Hanjin Shipping.
