Cash buyer GMS got an unpleasant surprise when it took delivery in Singapore of a container ship it acquired in September. The 1,032-teu Wisdom Grace (built 1998) was arrested on 24 November, just after the handover formalities were completed.
Court records show that Turkish shipowner Amarillo Shipping obtained an arrest warrant against the ship as it sought security in the amount of $779,000 for damages it claims its 29,500-dt general cargo ship Senator (built 1996) suffered in an April collision.
GMS acquired the Wisdom Grace for an undisclosed price at the end of September and arranged to take delivery of the ship in the South East Asian city-state two months later. The ship was renamed Race 1 upon being handed over.
S&P Global's International Ships Register lists the ships' previous owner as Hong Kong-registered single-ship owner China Trust Holdings.
Executives at the Anil Sharma-led company described the arrest to TradeWinds as “unexpected”, but said their lawyers were working with the seller to resolve the issue.
The vessel’s arrest did not stop GMS from moving ahead with attempts to secure an onward sale for recycling.
The Race 1 was put up for auction on GMS’ newly launched ship recycling digital platform on 27 November, with the minimum reserve set for $550 per ldt, or $2.93m.
Market observers following the auction said no bids were offered.
GMS told TradeWinds that it offered the ship at what it believed to be a fair market price.
The company’s latest market report indicated that pricing levels for container ships were $555 per ldt in India, $550 per ldt in Pakistan and $540 per ldt in Bangladesh.
However, other cash buyer and broker reports quoted levels of between $5 and $15 per ldt lower in each of these locations, citing pessimistic sentiment among South Asian ship recyclers.
GMS itself said that subcontinent pricing remained stranded in the low 500s per ldt “as we meander aimlessly towards the end of the year with very little serious and enticing levels to induce either owners or cash buyers to sell”.
The company told TradeWinds that it will focus for now on securing the release of its ship from arrest.