China Merchants Energy Shipping (CMES), the main shipping subsidiary of state-backed China Merchants Group, said it sold three bulkers in an effort to dispose of non-core assets.
In a recent exchange filing, the Shanghai-listed company said the 12,497-dwt CSC Rui Hai and CSC Xin Hai (both built 2012) were sold to Japan’s StarOcean Marine for CNY 40.7m ($6.3m) apiece.
The company also sold the 31,766-dwt Da Run (built 2010) to New York-listed Costamare for CNY 81.4m. The vessel is believed to be also known as the Great Resource.
“The three ships are non-eco ships, and their energy efficiency are worse than that of eco ships. They also emit more greenhouse gas emissions,” CMES said.
Their vessels’ Energy Efficiency Existing Ship Index readings are 20% to 30% lower than what eco ships have, according to CMES.
None of the ships are installed with scrubbers. The handysize ship is fitted with a ballast water treatment system, while the smaller ones are not.
“We will continue to enhance our dry bulk fleet and focus on the segments where we have advantages. We are to continue disposing and replacing non-core vessels,” CMES said.
CMES' exposure to the bulker sector had initially been limited to Valemaxes. However, the company has been expanding in various bulker classes in recent years.
Last year, the company acquired 75 capesize, panamax and handymax bulkers from Sinotrans Shipping for CNY 1.6bn as part of the internal restructuring of China Merchants Group.
In 2017, China Merchants Group absorbed Sinotrans & CSC to create China’s second-largest shipping group. Sinotrans Shipping was a subsidiary of Sinotrans & CSC.
“Our bulker business was engaged in some merger and restructuring activities in recent years. Those were over, and we are looking into how to achieve deep integration,” CMES said.
“We want to have even better economies of scale and become more specialised.”
In a separate filing, the company said it borrowed $345m from ING Bank and the Export-Import Bank of China to fund its VLCC orderbook.
CMES had previously agreed to pay Dalian Shipbuilding Industries Co nearly $501m for six 307,000-dwt units. The vessels are due to be delivered in 2021 and 2022.
The secured syndicated loan is fixed at the six-month Libor plus 131 basis points. It has a tenor period of 10 years.
