A dispute over the failed sale of a supramax bulker has been settled out of court.
According to shipping sources, Spark Ocean Shipping dropped its claim on the 53,500-dwt bulker Archagelos Michael (built 2007), which it had agreed in May to buy for forward delivery at a price considered low by prevailing market levels.
In exchange for dropping the claim, the fledgling Chinese company received more than $5m in compensation.
That figure seems to correspond with the fluctuating valuations of the Vietnamese-built ship.
According to a memorandum of agreement (MOA) signed in May, the Archagelos Michael was supposed to change hands at $8.2m, with delivery around the end of the summer. Within that period, its secondhand value soared amid a market boom that has lifted all boats in the dry bulk sector.
VesselsValue and MSI Horizon estimate that the ship is currently worth up to $14.9m. The Signal Ocean data platform produces an even higher indicative valuation of $17.4m.
At the time of the May MOA, the registered owner of the Archagelos Michael was Greek-controlled Brain Shipping. Around the time, it was supposed to be delivered to Spark Ocean, but the ship changed registration to a company called Andromeda Mare Ltd and its name to Panormitis.
Fearing that these moves might spell the collapse of the MOA, Spark Ocean intervened with Greek authorities, which briefly detained the vessel in Piraeus.
Burying the hatchet
Following an initial spat in a Greek court, the parties resolved to bury the hatchet on the terms described above. According to the sources, the settlement they have reached is final and releases the vessel from all claims.
The Panormitis is still listed with Andromeda Mare under the management of Athens-based Holger Navigation.
The dispute is characteristic of situations that arise amid rapidly rising bulker values, which cause a shift in players' motives and calculations from the time a deal is agreed to the time it is completed.
Spark Ocean is a Hong Kong-based special purpose vehicle formed by interests that have been so far active in ship chartering and operations.
