The High Court of Singapore has ordered that an arrested VLCC controlled by Hermes Marine Management be sold at auction.
Hermes, the Piraeus-based ship management company controlled by Lebanese shipowner Ghassan Ghandour, will be left with only a pair of panamax bulk carriers once the 320,000-dwt Chloe V (built 2011) is sold.
The auction date has yet to be announced.
With market analysts expecting a recovery in tanker freight rates, a modern VLCC such as the Chloe V is likely to attract strong buying interest, shipbroking sources in Singapore told TradeWinds.
The Daewoo-built tanker is estimated to be worth $47.6m on the secondhand market, according to a snapshot valuation by VesselsValue.
MSI Horizon, which calculates indicative fair market assessments on a quarterly basis, suggests the ship will be worth between $47.8m and $49.5m over the next two quarters.
The Chloe V's auction comes at the request of Credit Suisse, which seized the crude carrier on 15 October to recoup $44.8m outstanding on a mortgage loan it called in after the registered owner Chloe Navigation allegedly breached loan covenants.
The Swiss bank's arrest came only minutes after the lifting of a previous arrest by charterer Koch Shipping, part of US-based Koch Industries, over a dispute involving a scrubber that was purchased and installed jointly with Hermes.
The scrubber proved defective from the outset. Hermes was allegedly unwilling to reimburse Koch for the expenses incurred during the installation of the scrubber, nor for its share of the cost of the scrubber at the end of the charter.
Koch Shipping lifted its arrest after security was lodged for the ongoing legal proceedings.
News that the Chloe V has been cleared for auction comes as a relief to the crew that have been stranded aboard the ship without pay since its initial arrest.
A senior officer on board the Chloe V who has been designated to speak on behalf of the crew described this latest development as "a relief" as it provided clarity on the resolution of their situation.
Hermes stopped paying salaries after Koch arrested the ship. The manager claimed that it had been advised that the arresting parties were responsible for the expenses of the vessel while it was under arrest.
On Wednesday, the crew spokesman said that non-essential personnel were recently repatriated with promises that back wages would be paid by the end of the year.
The crew filed a lien against the ship in October, which puts them first in line when debts are paid from the proceeds of the auction sale.
