Minsheng Financial Leasing (MSFL) is seeking to sell more than $1.1bn-worth of its ship-finance portfolio to build equity for its transition from financier to operating shipowner.
The Beijing-based company is understood to be circulating a list of tonnage ranging from ultra large containerships to small bitumen tankers, all on long-term bareboat charter to premium owners including Maersk Line, Mediterranean Shipping Co (MSC), Navig8, Sinokor Merchant Marine and Trafigura.
Sources close to MSFL downplayed the sales drive, saying it is normal for an owner to consider offers for its assets. They described talk of imminent deals as being broker-driven.
European buyers
Offers for packages of ships with bareboat charters attached have been received from time to time, they said, but MSFL and prospective European buyers have always been too far apart on price.
But other financial and commercial sources, who believe a big "creative" deal with a European owner is imminent, said it is unusual for leasing houses to try to interest traditional owners in the narrow-margin business a lessor has to offer, although they often distribute pieces of their portfolio to fellow Chinese leasing houses.
Shipowners and brokers who have seen the offers believe prices would have to be very attractive to offset the returns implied in MSFL's long-term bareboat rates.
Based on estimates from VesselsValue, the 32 boxships and tankers being circulated might be worth around $1.15bn.
Based on estimates from VesselsValue, the 32 boxships and tankers being circulated might be worth around $1.15bn
But with long-term bareboat charters attached, sale-and-purchase market values are of only limited relevance to the price in any deal, and brokers pointed out that high book values on some of the containerships may make for stubborn pricing.
One set of ships being circulated is a quintet of HHI-built Maersk neo-panamax containerships. They are the 13,092-teu Maersk Edinburgh, Maersk Eindhoven, Maersk Emden, Maersk Essex and Maersk Evora (all built 2010). The ships have approximately seven years to go on a bareboat charter at $35,200 per day, with a $37m purchase option.
Two DSME-built MSC ships in the 18,000-teu to 19,000-teu class delivered in 2015 and 2016 carry a rate of $39,500 per day on bareboat charters with 14 to 15 years to go and a $12m purchase obligation at the end. A third MSC ship of 13,000 teu built in 2011 at HHI has nine years left at $35,600 per day with a $15m purchase obligation.
New Times
Four Navig8 LR2 newbuildings to be delivered from New Times Shipbuilding this year are financed for 10 years to the tune of $35.6m per ship at Libor plus 480 basis points, with a $15m purchase obligation per ship.
A fleet of 10 Sinokor MR tankers delivered from Hyundai Mipo Dockyard (HMD) from 2014 onwards have nine years to go at a fixed bareboat rate of $8,900 per day and a purchase obligation of $17.6m.
Another 10-ship tanker fleet on bareboat to Trafigura, mostly trading for Wisby Tankers, includes six 15,000-dwt bitumen carriers from Croatia's 3 Maj plus two of 30,000 dwt and two in the 37,000-dwt class from HMD.
The last two are understood to be the 36,900-dwt Palanca Maputo (built 2016) and 37,700-dwt Palanca Miami (built 2017). These are on varying schedules of rates and purchase option prices over a schedule of charter renewal periods.
MSFL has declared a strategy of reducing its finance loan portfolio in favour of building up its time charter or operating lease fleet with greater exposure to residual value, allowing it to operate more like a traditional tonnage supplier, asset player shipowner than as a pure financier.
In dry bulk and in product tankers, MSFL is also seeking to develop trading flexibility that will allow it to buy, hold and flip attractive assets.
