South Korea’s HMM is ordering bulkers for a massive new contract lasting 16 years.
The shipowner said it has agreed a long-term charter for four new vessels delivering from September 2026.
The deal with an unnamed counterparty is worth $954m and will last until the end of 2042.
The company has been expanding its fleet to move away from struggling container ships, with tankers, bulkers, car carriers and multipurpose ships now in focus.
A regulatory filing reveals that the contract period can be changed “depending on relevant schedules”.
The charterer has an option to stretch the deal for another five years, and can also buy the ships after years 10 and 15.
An HMM spokesperson told TradeWinds that he could not give any further details of charterer, ship type or shipbuilder due to confidentiality clauses.
The Korea Economic Daily said HMM aims to increase the number of bulkers it operates from 29 now to 55 by 2026.
The operator has already added six bulk carriers this year and plans to introduce 11 more in 2024.
Stable profit generation
Bulker operations are viewed as more stable in terms of profit, although without the potential for the big highs experienced in recent years for boxships.
The company is owned by state-controlled banks but is in the process of being sold off.
Three groups are still believed to be in the running: a Harim-JKL Partners consortium, Dongwon Group and LX Holdings.
The expected selling price for HMM is around KRW 5trn ($3.9bn).
In the preliminary round, shareholder Korea Development Bank will assess the eligibility of the bidders by evaluating their ability to operate a national shipping line and to mobilise funds.
KDB will then conduct due diligence for about two months before selecting the preferred bidder and closing the sale by the end of this year, reports have suggested.
