In an unusual move on Wednesday, Singapore Exchange authorities asked shipowner First Ship Lease Trust (FSL Trust) to obtain shareholder approval before completing a sale of two newbuildings.
The $105m deal to dispose of the 114,000-dwt LR2 ships FLS Fos and FSL Suez (both built 2021) was “not in the ordinary course of business”, the Singapore Exchange Regulation (SGX RegCo) argued in a letter to FSL Trust.
“In the IPO prospectus, it was clearly stated that the main objective of the trust is to derive a stable income stream from its portfolio of lease assets. The trust’s mandate does not include short-term trading of vessels,” SGX RegCo said.
In its disclosure of the decision, FSL maintained its initial stance that the sales were indeed conducted in the ordinary course of business and that they required no special approval by the shareholders.
However, in order to comply with the exchange's wishes, FSL said it would convene a meeting to ratify the deal by 30 April.
FSL Holdings, which is FSL's sponsor and owns 73% of its shares, has already pledged to vote in favour of the disposal, the company added.
FSL announced the tanker deal on 17 February and said that it had already received the initial 15% deposit in escrow.
A few days later, Singapore bourse authorities asked the company to elaborate on the deal, in response to which FSL said it achieved an “extraordinarily high [price] in the current market environment”. VesselsValue estimated that the FSL Suez and FSL Fos were worth just $42.5m each at the time.
Fleet renewal, as FSL previously said it was ordering the ships for, was “not for its own sake, but to create value to the trust and its unitholders”, the company told SGX authorities.
FSL said it would book a net gain of $500,000 from the deal, after taking into consideration the combined newbuilding contract price of $97.6m and other costs associated with their construction and broker fees.
VesselsValue already lists the vessels under their new names, Fezzan and Anwaar Benghazi.
