Shoei Kisen is taking advantage of a Japanese government-backed overseas infrastructure development scheme to finance two 24,000-teu container ship newbuildings.
The funding is being sourced from the Japan Overseas Infrastructure Investment Corp for Transport & Urban Development (JOIN), a public-private venture that supports infrastructure projects and the overseas expansion of domestic companies.
JOIN will contribute ¥4.2bn ($30.8m) of equity to a Liberian-registered special purpose company established to own the vessels. Shoei Kisen will provide additional equity.
The shipbuilding contract has been struck with Imabari Shipbuilding, the parent company of Shoei Kisen.
Additional financing is being provided to the special purpose company through commercial shipping banks.
The investment was approved by Japan’s Ministry of Land, Infrastructure, Transport & Tourism.
The price of the newbuildings is currently in excess of $200m per ship.
The special purpose company will bareboat the vessels out to a Shoei Kisen subsidiary, which will charter them out to a Japanese shipping company.
It is unclear which of Shoei Kisen’s Imabari newbuildings the funding is being directed towards.
The only Japanese company that would operate vessels of this size is Ocean Network Express (ONE), the Singapore-based liner operator owned by K Line, NYK Line and Mitsui OSK Lines.
Last December, ONE signed a charter contract for six 24,000-teu newbuildings from Shoei Kisen, with the orders split between Imabari Shipbuilding and Japan Marine United.
JOIN said: “Through this project, JOIN will provide Japan-made state-of-the-art container ships that maximise the cargo load capacity, minimise fuel consumption and contribute to the improvement of the efficiency of marine container transportation.”
Overseas expansion
The project will also contribute to the “competitiveness of Japanese shipping business”.
This is the first-time JOIN funding has been used in a newbuilding project, and it could establish a model for other shipbuilders and shipowners.
The corporation was set up in 2014. It describes its function as “to support the overseas expansion of Japanese companies, which will lead to further expansion of their business opportunities”.
Its members include the Japanese Shipowners’ Association and the Shipbuilders’ Association of Japan.
JOIN is backed by ¥160.8bn of government investment and ¥5.9bn from private companies.
