John Fredriksen's SFL Corp has picked up a 2020-built boxship with a chequered history at a price it described as cheap in strong sale-and-purchase markets.
The New York-listed sale-and-leaseback specialist said it had acquired a 5,300-teu post-panamax, backed by a seven-year charter to AP Moller-Maersk.
The only ship to fit the description is the 5,315-teu Yangtze Shanghai (built 2020), listed in the fleet of China's New Yangtze Navigation, its only boxship in a fleet of 14 bulkers.
Clarksons lists the vessel as chartered to Maersk last September for between eight and 10 months.
Legal tussle
VesselsValue assesses it as worth $63m.
The Yangtze Shanghai was ordered for $48m in 2015 at China's Zhoushan Changhong International Shipyard, reportedly by Zodiac Maritime.
In January this year, UK-based Lomar Shipping launched an arbitration fight over the ship and a sistership that was due to be delivered to the original owner last summer.
Lomar was said to have lodged a claim against Zhoushan Changhong under London Maritime Arbitrators Association rules for not honouring the contract the two companies signed last September.
Shipbuilding sources said Zhoushan Changhong agreed to sell the duo to Lomar for about $36.5m each.
However, the improved boxship market resulted in rising asset values and is said to have led Zhoushan Changhong to refuse to deliver the vessels at the original price.
Speaking on a conference call with analysts, SFL chief executive Ole Hjertaker said the price his company has now paid is confidential.
But he added: "We can confirm that it's well below current charter-free broker valuations, adding a nice offer for us."
He said maintaining "market-leading operational standards and close relationships with end users pays off, as illustrated by another deal with Maersk".
Delivery is expected in the third quarter, when SFL will have 13 vessels on charter to its Danish partner.
The boxship charter backlog is $1.9bn, with Maersk and Mediterranean Shipping Co accounting for 76% of this.
Hjertaker said these partnerships give his company "more deal-flow opportunities".
'They'll charter anything'
"The vessel we have agreed is essentially a newbuild vessel, but it's been on the water a few months," he added.
"And therefore, you could call it a secondhand, but it's with all the new bells and whistles that you would build on a new vessel."
Hjertaker believes only one-third of boxships ordered in the past couple of years have come with scrubbers fitted.
"And very few vessels — I believe sort of 10%, 12% or so — have been ordered with dual fuel," he added.
"But of course, in the frenzy that we've seen right now, where there has been a shortage of capacity because of bottlenecks, they will charter anything."
That is why asset values and charter rates for vessels that were barely covering their operating expenses for many years are suddenly shooting through the roof, Hjertaker said.
He called rates "phenomenal", but warned: "We believe that is something that will subside when the market cools down again, but we believe that modern vessels built after the financial crisis have much better prospects also in the long run."
