China’s Bank of Communications Financial Leasing (BoCom FL) has agreed to buy 10 supramaxes from a German bank, swelling the leasing company’s self-operated fleet from six to 16 vessels.
No price has been disclosed, but BoCom FL is understood to be pleased with the terms it has secured.
Some observers have linked the vessels to German containership and bulker owner Conti.
However, TradeWinds understands the deal does not involve the seven supramaxes and three post-panamaxes that reference sources attribute to Conti.
Bank owned
Rather, while Conti manages some of the vessels, the 10 ships are all supramaxes that are owned by the unnamed bank.
Some believe HSH Nordbank is the lender involved but this could not be confirmed.
The deal is a pure shipowning play with a view to a resale in a rising market, as opposed to sale-and-leaseback transaction.
However, the transaction is subject to board approval and formal closing will have to wait for a changing of the guard at the top of the bank-owned leasing company.
Last week, Zhao Jiong was appointed as BoCom FL’s chairman and a new president is expected to be named following a management shake-up that will see former chairman and president Chen Min retire.
Observers say the acquisition reflects an increasing appetite among China’s financial leasing houses to become pure owners, rather than simply financiers.
BoCom FL, Minsheng Financial Leasing and ICBC Leasing have all used their huge annual investment budgets to cut price-driven opportunistic deals.
BoCom FL’s entry into the ranks of pure shipowners has been rapid, possibly reflecting an ambitious investment budget that cannot be met through leasing deals alone.
European fund
In May, TradeWinds reported that BoCom FL had purchased four supramaxes from an unnamed European fund, with a view to operating the ships for up to a year before flipping them in the course of an anticipated market improvement.
Since then, TradeWinds understands that BoCom FL has added at least two more bulkers to its operated fleet.
The state-owned bank’s leasing arm is not adding staff or building a chartering desk to accommodate its growing fleet.
BoCom FL’s leasing officers have been recruited from shipping companies and are capable of handling commercial operations, TradeWinds is told.
The ships are mostly intended for employment under one-year time charters with established partners, including both shipowners and major charterers.
Ample budgets
One leading sale-and-purchase broker said it makes sense for leasing companies to use their ample budgets to buy and flip when, in the current market, there are fewer opportunities for financing transactions.
Risk-control policies at the Chinese state-owned leasing houses tend to limit them to the top tier of shipowners and charterers for sale-and-leaseback deals, and that market is currently largely saturated.
“So now they buy for their own account and wait for the market to flip the ships,” the broker said. “It’s a pity for the German bank that now owns the ships that they don’t have the patience to follow the same strategy.”
