Singapore’s DBS Bank was no doubt disappointed when officials at the Sheriff of Singapore’s office opened the sealed envelopes received last week containing the bids for two handysize tankers last operated by failed oil trader and tanker owner Coastal Oil.
The 24,200-dwt product tankers Atalanta (built 2015) and Babylon (built 2017) were expected by brokers to attract a reasonably high level of interest when the auctions were first announced. Both are modern ships in good condition and of a size that is popular with regional Asian tanker owners.
But, in the end, they failed to find any suitors willing to offer what they were deemed to be worth. None of the handful of bids received for either ship met the minimum reserve price set by the High Court of Singapore, officials told TradeWinds this week.
The court does not make public the reserve price it sets for vessels at auction.
Under Singapore’s auction process, when bids do not satisfy the minimum reserve price, the value of offers received are forwarded to the arresting party via their lawyers. If willing to accept the amount offered, the arresting company can petition the courts to accept the low offer. Such requests are seldom granted at the first auction attempt.
Sale attempts
DBS Bank arrested both ships — Coastal Oil’s largest tankers — in January after filing mortgage claims of about $18m in total against the pair. Four smaller bunker tankers operated by subsidiary Heng Tong Fuels & Shipping make up the remainder of Coastal Oil's fleet.
While attempts are being made to sell the handysize tankers via the judicial process — another auction will likely be scheduled in the near future — the smaller bunker tankers are being sold off via direct sales arranged by Coastal Oil’s creditors.
Two of the bunker tankers have already been sold, while the 2,300-dwt Coastal Mercury and 2,200-dwt Coastal Saturn (both built 2012) remain anchored off Singapore amid efforts to find buyers.
Coastal Oil placed its entire fleet on the market near the end of last year after running into financial problems with accumulated debts totalling in the region of $354m.
It was unable to sell any ships before creditors stepped in to take over the fleet-liquidation process.
