Singapore-based OM Maritime has outbid liner shipping’s big guns by paying close to $60m for a 15-year-old panamax boxship.
The company is forking out up to $58m to take the 5,060-teu S Santiago (built 2006) from the fleet of Andreas Hadjiyiannis-led Cyprus Sea Lines (CSL).
The company will effectively be paying $40m more than what might have been the asking price for the vessel at the start of the year.
But the acquisition still makes sense in a charter market where purchasing expensive vessels remains a viable alternative to chartering ships at even greater cost.
Charterers are today having to fork out around $54m for a three-year charter of a classic panamax boxship.
Those numbers are reflected in Lomar Shipping’s fixture of the 5,042-teu Sydney Trader (built 2005) to liner operator Orient Overseas Container Line (OOCL) for 36 months at $50,000 per day.
But that rate is nothing compared to the cost of shorter fixtures, where rates in excess of $100,000 per day are increasingly common.
Lucrative deal
The sale of the S Santiago will prove lucrative for CSL, which acquired the vessel along with its sistership SC Mara in 2015 for just $35.6m en bloc.
The company is expected to take delivery of the vessel next March, which gives the owner time to profit from the short-term charter of the vessel. Some brokers expect the next deal for a classic panamax boxship could breach $70m.
“We are engaged in negotiations for the purchase of this vessel,” said OM Maritime company director Subhangshu Dutt.
“Once the acquisition is finalised we will consider the employment.”
OM Maritime acquired the vessel after outgunning bigger players like Mediterranean Shipping Co (MSC), according to brokers.
“It’s probably a question of who blinks first,” said Dutt, who has a memorandum of agreement (MOA) for the purchase of what will be the eighth vessel in his company's fleet.
The company controls seven bareboat chartered containerships ranging from smaller vessels like the 2,478-teu Snoopy (built 2003) through to its largest vessel, the 6,500-teu Bigli (built 2005).
The ships are chartered to Sea-Lead Shipping, a privately-owned feeder operator specialised in services to the Red Sea, Gulf, Indian subcontinent and South East Asia. The liner operator is understood to be seeking to reduce its chartered fleet.
Further and faster
Classic panamax boxships have emerged as star performers in shipping markets with values rising by 200% since the start of the year, according to Clarksons Research.
The price of a 4,500-teu, 10-year-old panamax has climbed from $19m to $60m, the shipbroker estimates.
That means that asset values have risen more in percentage terms than any other sector of shipping, wet or dry market.
Values have been pushed up by lines such as MSC which have bought 70 containerships in the past 10 months.
The liner giant set the last benchmark paying around $50.5m in June to take the 4,992-teu Mexico (built 2002) from Israel’s XT Shipping.
Containership prices have risen so high that some brokers warn that trading the vessels down to scrap in just three years might soon not be possible.
Chinese net $80m
That has not stopped a Chinese operator with two ships to sell from making a huge profit of nearly $80m.
Taizhoushi Dongcheng Yuan Shipping is said to be selling the 3,768-teu Dong Cheng Bi Hai and Dong Cheng Hao Hai (both built 2007) to an unnamed European liner operator for a price close to $90m en bloc.
The ships were acquired from insolvent German KG (limited partnership) funds as the HS Bizet and HS Berlioz in early 2017 for a reported $5.5m each.
