Maersk Tankers has set up a new $150m credit facility to ensure it can pay owners during a period of high rates and bunker prices.
The pool operator pays shipowners every two weeks based on planned bookings and demurrage and needs the extra cash as the product tanker market returns to the booming rates of the summer.
An average MR voyage lasts about 30 days so several fortnightly payments are made without receiving income. Demurrage accounts for about 12% of total voyage revenue can take up to 90 days before collection.
MR tankers on US to Europe voyages currently earn time charter equivalent (TCE) rates of $64,654 a day — more than five times the rate at the start of the year, according to the Baltic Exchange.
It means upfront payments to owners have increased significantly, putting a strain on finances and prompting the move.
The company said the credit arrangement with investment bank Citi was a planning measure and there had been no break in payments.
Taking the strain
“Tanker markets are currently experiencing volatile and high freight levels, at the same time as fuel prices are surging. This can put a strain on a tanker owner’s working capital,” says Morten Mosegaard Christensen, its chief financial officer.
“We are pleased that, together with Citi, we have created a solution, which will allow us to continue to guarantee the cash flow to our pool partners at a time when we are paying out increased TCE earnings.”
Pooling is seen as a way of mitigating losses during a downturn in the tanker market but its advocates say there are also significant opportunities during the good times. Maersk Tankers currently has 170 ships in six pools ranging from 10,000 dwt to LR2s.
