Graig Shipping is selling its last two handysize bulkers, which will see the Welsh company exit shipowning at the end of its centenary year.
The private Cardiff-based company has agreed to sell the 34,898-dwt sisterships Graig Rotterdam and Graig Cardiff (both built 2012) by the end of 2019, with proceeds going towards paying off creditors and an outstanding loan from ABN Amro.
The sales come two years after Graig sold its Graig Ship Management arm to V.Group for a profit of $4.5m.
“The group will exit vessel ownership in 2019 with the sale of its two vessels,” Graig chairman and chief executive Hugh Williams wrote to shareholders in the 2018 report and accounts, which were made public recently.
Williams said the company will concentrate on its Diamond 2 ultramax new-generation design in collaboration with its partners and promote it to Chinese shipyards, leasing companies and global owners.
“Successful implementation of this project will generate successful future income flows,” he said.
“The group is also investing significantly in the continued growth and expanding market share of Idwal Marine’s global inspection business with the development of new technologies and systems,” Williams told TradeWinds. “The group, with this strategy, sees a very positive outlook and future.”
An agreement has been made to sell the Graig Rotterdam to Nova Ulysses Maritime Co for $10.5m, with completion of the sale and delivery expected in November.
An attempt to sell the Graig Cardiff was called off earlier this year when it had not been sold by a deadline of 28 June. It was put back on the market in early August, with the intention of reaching a sale agreement by 31 October, with completion by 15 December. Graig gave no further details.
“It is anticipated that both vessels will be sold and delivered by 31 December 2019 and that sales proceeds will be applied to the settlement of all operating and trade creditors with the balance being paid to the bank as final settlement of the loan outstanding,” Graig’s accounts said.
On delivery in 2012, both newly built vessels were placed in a Lauritzen Bulkers pool, where they still operate.
The group is also investing significantly in the continued growth and expanding market share of Idwal Marine's global inspection business with the development of new technologies and systems
Graig CEO Hugh Williams
“The shipping market continues to be volatile with difficult trading through most sectors,” Williams told shareholders.
Graig fell to a pre-tax loss of $26.3m in 2018 from a $65,000 profit a year earlier, mainly due to a $21.4m writedown in the book value of its two ships to $10.5m each.
Gross profit before the charge was $2.9m last year, down from $3.4m on turnover of $10.3m ($10.6m a year earlier). UK companies are allowed to file accounts in dollars if that is their functional currency.
Graig said its consultancy and vessel inspection business continued to grow, with strong gross margins. Its project management arm generated revenue of $3.7m in 2018, up from $2.3m a year earlier. The group earned no income from newbuilding supervision last year.
The shipowner has an outstanding loan of $29.1m from ABN Amro, with a senior portion of $21.5m at Libor plus 3.75% and a junior loan of $7.6m at 8% interest repayable on 31 December this year.
Graig’s parent company, Idwal Williams and Co, has lent it up to $6.5m until the end of 2021 to ensure it remains a going concern.
“The group is backed by long-term ownership of the Williams family through the ultimate holding company Idwal Williams and Co,” Williams said.
Graig’s financial performance has fallen a long way in recent years. In the boom year of 2007, it made pre-tax profit of $35.9m on turnover of $57.9m as activities were fuelled by soaring dry bulk freight markets and a surge in newbuilding management.
The company, founded in July 1919, has been managing investments and projects. Graig says more than 110 dry bulk vessels worth $2.75bn have been built using the Diamond design it helped pioneer.
