CSSC (Hong Kong) Shipping has continued to broaden its asset base by ordering and leasing four small passenger vessels in China.
The leasing arm of state-owned China State Shipbuilding Corp has ordered the ships from China Shipbuilding Group (CSSC Group)’s Wuxi Dongfang Ship Research High Performance Ship Engineering Co.
Wuxi Dongfang is principally engaged in the design and construction of medium and large luxury cruise ships, according to a regulatory filing by the Hong Kong-listed leasing company.
CSSC Shipping has agreed to lease the vessels to Hangzhou Three Rivers, which is principally engaged in the planning, development and operation of tourist attractions and eco-cultural tourism in Hangzhou, China.
Hangzhou Three Rivers will lease the vessels for a period of 60 months in return for total lease payments of CNY 74.3m, CSSC Shipping said.
At the end of the lease period, Hangzhou Three Rivers will acquire the vessels for the nominal fee of CNY 1 per ship, CSSC Shipping said.
The four, 100-passenger cruise ships are costing a total of CNY 75.5m ($105.4m), or CNY 18.9m each, with payment terms of 30% on contract signing, 30% on the start of construction, 20% upon vessel launch and the final 20% on delivery.
CSSC Shipping said the terms with Wuxi Dongfang were agreed after arm’s length negotiations taking into account the current market values of similar types of vessels by reference to the publicly available industry reports and recent comparable transactions in the industry.
The vessels, Hull Nos QZ50-3-1, QZ50-3-2, QZ50-3-3 and QZ50-3-4, are expected to be delivered by the end of August 2023.
Established in 2012 and listed in 2019, CSSC Shipping is the first shipyard-affiliated leasing company in Greater China and one of the world’s leading ship-leasing companies.
As of 31 December 2022, the company’s vessel portfolio numbered 158 vessels and had a total asset size exceeding HKD 40bn ($5.1bn), according to its latest annual report.
By asset value, LNG and LPG carriers make up 35.7% of the fleet, container ships 21%, tankers 19.6%, bulkers 13.8% and special tonnage 9.9%.
