Singapore shipowner First Ship Lease Trust (FSL Trust) has opted against traditional bank financing for its new product tankers.
The company said it had evaluated several funding options for the 114,000-dwt LR2 ships ordered at Cosco Shipping Heavy Industry in Yangzhou, China.
These included bank lending, but FSL Trust went in the end with a "reputable" Chinese sale and leaseback company, underlining the growing importance of this alternative financing route for shipowners.
Hull numbers 944 and 945 will be sold for $58.56m combined. The money will be used to pay off the remaining instalments at the yard.
The lease term will be 10 years back to FSL Trust on delivery this month and in January 2021.
The shipping company is obliged to buy the vessels at the end of the term.
Leaseback cash released
Last week, Norway's Avance Gas turned to the sale and leaseback finance sector due to a lack of regular financing, it said.
The John Fredriksen-controlled company said it had refinanced the 83,000-cbm VLGC Pampero (built 2015) by offloading it for $45m to an unnamed Chinese leasing house.
And Turkey’s Ciner Shipping Industry & Trading sold two suezmax newbuildings to CSSC (Hong Kong) Shipping for $127m in a sale and leaseback deal.
As part of the transaction, the Vasileios Papakalodoukas-led shipowner will take the two vessels back on 10-year time bareboat charters at a total cost of $126.95m.
FSL Trust exited the container shipping segment in August, leaving it as a pure-play product tanker owner.
The Singapore-listed company hived off three traditional panamax containerships for an undisclosed price.
The 4,250-teu FSL Eminence, FSL Elixir and YM Enhancer (all built 2008) were sold to an unnamed third-party.
