Sale-and-purchase activity for secondhand tankers is switching away from VLCCs, either due to freight rates for such ships rapidly deteriorating or simply because the market has run out of available candidates.
At least a dozen VLCCs changed hands in reported or confirmed deals in April. Buyers and sellers, however, apparently paused, with one S&P broker acknowledging that the number of obvious sales candidates had reduced.
As the market entered the week on 4 May, aframax crude tankers and LR2 product tankers, which are the same size, have been the focus of reported activity instead.
In the biggest such deal reported, Eastern Pacific Shipping is said to have sold the 105,600-dwt Barents Sea (built 2000) to undisclosed buyers. Some brokers say the vessel fetched around $28m.
Eastern Pacific has been trading the ship ever since taking delivery of it as a newbuilding from Hyundai Heavy Industries. Company managers did not respond to a request for comment by the time of writing.
Under pressure
Two Greek companies are at the forefront of the deal talk as well.
Depending on which broker one listens to, Harry Vafias company Stealth Maritime agreed to divest the 105,000-dwt aframax CS Zephyr (built 2006) for $17.9m, or the 105,000-dwt Signal Puma (built 2005) at the same price.
Market sources describe the price as impressive — especially if it concerns the one-year older Signal Puma and on the basis of a ballast water treatment system has been installed and special survey passed. VesselsValue estimates the Signal Puma is worth just about $14m.
Stealth is known to have been looking for months for a potential buyer for both the CS Zephyr and the Signal Puma, which were both built at China’s Shanghai Waigaoqiao Shipbuilding.
The CS Zephyr came off a time charter with Clearlake in March. The ship made headlines a few years ago under its previous name, CS Stealth, when it was at the centre of a bitter commercial dispute between Stealth and Turkey’s Geden Lines.
Executives at Stealth did not respond to a request for a comment.
Other aframax sales may have been less voluntary.Greece’s Eletson Corp, which has been already reported selling as many as five ships since July 2019, is now divesting another two - the 106,100-dwt LR2 sisterships Makronissos and Agathonissos (both built 2002) for $13m each.
Managers at low-profile Eletson did not respond to a request for comment.
Some market sources say at least some of Eletson's sales have been driven by creditors in deals arranged by Clarksons. Kertsikoff family-led Eletson underwent a debt restructuring in 2018 and announced early last year that it was in talks for a new one. The company has provided no further public update on the state of these restructuring talks since.
Eletson has raised more than $30m from the confirmed sales of two panamax tankers and an LPG carrier since last summer, as TradeWinds has reported.
Some brokers believe Eletson sold another two panamax sisterships in February — the 72,500-dwt Andimilos and Keros (both built 2004) in an enbloc deal worth $21.5m. This transaction, however, has not been confirmed yet and both ships are still listed in Eletson’s fleet.
Swedish imbroglio
Indonesian interests are believed to have bought a somewhat larger aframax from Swedish sellers — the 114,800-dwt Pallas Orust (built 2014) for around $14m.
The sale comes as a surprise, given that Smart Energy Sweden invested 50% of equity to buy the ship as recently as last summer for $15.5m, in a deal arranged through the Clarksons Platou Project Finance.
Smart Energy was established in 2014 by its main shareholder, Fredrik Johansson. With a fleet of two bunkering ships before purchasing the Pallas Orust from Greece’s Tsakos Group in June 2019, Smart Energy specialises in setting up smaller filling stations in rural areas, as well as on selling fuels in bulk to agriculture and industry.
The company, however, hit some snags lately. According to corporate filings with Swedish authorities, its shipping subsidiary Pallas Group AB declared bankruptcy in October last year, just a few months after the ship’s purchase. Smart Energy has subsequently said it wants to delist its shares from Sweden’s Nordic Growth Market (NGM) exchange.
Managers at Smart Energy and Clarksons Platou did not respond to a request for comment.
Trond Lillestolen contributed to this article
