Norwegian shipowner J Ludwig Mowinckels Rederi has retained Fearnley Securites to push a $53m private placement aimed at financing its order for up to four suezmaxes at China’s New Times Shipbuilding.
The offering, under the flag of Mowinckel Crude Tankers, indicates the Norwegian owner will take 25% of the equity — or $13.2m — on the deal for two firm orders, with two options set for delivery in 2022.
Offering documents confirm a TradeWinds report from 3 June that indicated Mowinckels had signed a letter of intent with New Times for a contract price of $52.1m.
However, the all-in project price for the two firm 156,500-dwt vessels is $57.7m, and the units will have a cost break-even of $18,000 per day.
Delivery would be by August 2022 for the firm units and December 2022 for the options, with 20% of payment due at the contract signing.
Strategic partner
Mowinckels is proposing to either sell the tankers prior to delivery or to take and operate them before divesting at a later date.
Commercial management would be through Mowinckels Rederi or a strategic partner.
Fearnleys is negative on the near-term prospects for the tanker market but is taking a positive view around dynamics for the 2022 delivery window.
Backers are citing a historically low orderbook of 7%, the smallest since the 1990s, and owners are reluctant to place new orders based on uncertainty over propulsion systems owing to IMO carbon reduction mandates.
There is also potential for the highest vessel phase-outs since the first phase for single hulls under the Oil Pollution Act of 1990, backers said.
“The current scenario is very intriguing as one of two scenarios is likely to follow,” Fearnleys said.
“Newbuilding activity will pick up as the prices are low. This will lead to upward pressure
on prices — sell for profit. [Or] owners continue to be reluctant to build.
“This will create a positive imbalance in the market and charter rates will increase providing an attractive dividend-yield case.”
The tankers would use conventional fuel under a design about 40% more efficient than comparable vessels, and ready to use ammonia after modifications.
The contract price does not include exhaust-gas scrubbers, which can be added for $1.5m each, documents show.
Financing assumes 50% to 70% loan to valuation from a Norwegian bank at a margin of 375 basis points and a 12-year profile.
As TradeWinds has reported, some suspect Mowinckels will work with a partner such as Norway’s Viken Shipping on the order, but there is no mention of a specific ally in the prospectus.
