Singapore’s DBS Bank has moved swiftly to auction two handysize product tankers that last traded for failed oil trader and tanker operator Coastal Oil.
The 24,200-dwt Babylon (built 2017) and Atalanta (built 2015) are set to be sold via a sealed bidding process, with offers due in at the Sheriff of Singapore’s office at 3pm on Tuesday next week.
Successful bidders will have to pay an additional SGD 327,700 ($242,200) for bunkers onboard the Atalanta and SGD 247,200 for bunkers onboard the Babylon.
Court-mandated surveys describe both Cosco Dalian-built tankers as being in structurally sound, serviceable condition and free of any significant damage. VesselsValue estimates the Babylon to have a market value of $17m and the Atalanta to be worth $15.2m.
DBS Bank arrested both ships in January after filing mortgage claims of about $18m in total against them. They had been operating for Coastal Oil subsidiary Coastal Logistics in the Asian regional tanker trades.
Financial difficulties
Coastal Oil, whose main business was supplying bunker fuel to ships calling at Singapore, as well as to other bunker suppliers operating in South East Asian waters, ran into financial difficulties last year.
It had accumulated debts in the region of $354m owed to lenders including DBS Bank, OCBC Bank, United Overseas Bank and Standard Chartered Bank (Hong Kong).
After filing for voluntary liquidation in December 2018, it attempted to sell its fleet of tankers, which included the two handysizes, as well as four smaller bunker tankers operated by subsidiary Heng Tong Fuels & Shipping, but creditor banks stepped in and arrested most of its ships.
Two of the bunker tankers were subsequently sold. The 5,500-dwt Coastal Neptune (built 2014) went to Redwise Maritime Services of the Netherlands and the 5,500-dwt Coastal Jupiter (built 2013) to Singapore’s Hong Lam Marine in what appear to have been bank-driven sales conducted outside of the judicial process.
Two other bunker tankers, the 2,300-dwt Coastal Mercury and 2,200-dwt Coastal Saturn (both built 2012) remain anchored off Singapore, although an arrest warrant filed against the Coastal Mercury at the end of March has since been lifted.
TradeWinds understands from Singaporean broking sources that Coastal Oil’s creditors are trying to sell the ships without resorting to judicial sales as they have more control over the price that can be obtained.
