Banks and leasing companies are pushing major Chinese private owners — including Dalian-based Fortune Ocean Shipping and Qinhuangdao-based Hebei Ocean Shipping (Hosco) — for capesize sales to raise cash in an increasingly promising dry bulk sale-and-purchase market.
Finance and shipbroking sources said Fortune Ocean's 175,400-dwt Cape Star and Hosco's 182,100-dwt Ocean Emperor (both built 2010) are being circulated, either by shipowners inspired by bankers or directly by the banks.
More could follow if the market tests well.
But some even on the financing side are holding out for greater expected improvements in secondhand price offers in 2019.
Meanwhile, fleet deals may also be in the works as established European shipowners negotiate with lenders and lessors.
TradeWinds understands that Fortune Ocean Shipping's Cape Star is being offered with either a fixture attached or charter-free, subject to approval from Cosco Shipping Bulk, which has had the ship on charter since around the time of its delivery from China Rongsheng Heavy Industries. The time charter to Cosco is thought to have about two years to run.
Almost mortgage-free
The Cape Star is Fortune Ocean's only capesize bulker. It is said to be within a couple of months of being paid off and none of the banks think the outstanding sum presents any challenge. They see it only as a promising source of liquidity, which the owner may need to surmount the upcoming financial hurdle of newbuilding deliveries.
Sun Xingtao-controlled Fortune Ocean has a fleet of 26 ships from handysize up to kamsarmax. The company's strategy was expansive through some of the lowest points in the dry bulk depression, and last summer TradeWinds reported that it had ordered up to eight kamsarmaxes at Tianjin Xingang Shipbuilding Heavy Industry after negotiating with several major shipyards.
The Xingang kamsarmax series is said to remain unfinanced, and this prospect is on the mind of many of Fortune Ocean's financiers, which include China Minsheng Bank (HK), Minsheng Financial Leasing, Bank of Communications Financial Leasing and a Japanese trading house. Sun has previously told TradeWinds that the ships have been ordered on behalf of a new capital funding company called Qiangwei.
Fortune Ocean could not be reached immediately for comment.
Ocean Emperor series
Meanwhile, Gao Yanming-controlled Hosco's Ocean Emperor is said to be the first of up to eight Qingdao Beihai-built capesizes delivered between 2009 and 2011 that banks are interested in selling and have asked brokers to circulate.
Four earlier ships in the same series were repossessed in 2015 by Hong Kong-based Tiger Group, followed by several kamsarmaxes financed by Standard Chartered Bank.
All eight remaining Qingdao Beihai capesizes are mortgage financed, four by Beijing-based Export-Import Bank of China and another four by Hong Kong-based ICBC Asia, and sources say lenders have full say over any sale.
The ships were ordered at over $50m and the current outstanding loan amount exceeds their market value. Banks are hard put to determine book value at this point but have already written the ships down in their portfolio and are content to sell.
The lenders differ in their ideas about timing, however, as some expect prices of well over $30m to be attainable by early next year.
In the case of ICBC Asia, whose package includes the Ocean Emperor, it is understood to have been looking for $25m offers until the market rose, and then to have turned down offers at that level in the hopes of getting more like $27m.
Quartet interest
TradeWinds understands at least one European shipowner is actively negotiating to buy four of the Hosco capesizes as a package, but lenders are exploring all their sale options.
Beijing-based ICBC Leasing is understood to have originally been keen to buy the four ships controlled by sister company ICBC Asia for its own operation as a speculative asset deal, but has rejected the idea and plans instead to make any new acquisitions from the market.
Published sources list the Ocean Emperor and five other Hosco capesizes as managed and commercially operated by Golden Lion Shipping of Hong Kong. A representative of Hosco offered to transmit requests for comment but had not responded before TradeWinds went to press.
