Hong Kong’s Wah Kwong Maritime Transport has raised $48m with the sale and leaseback of two ultramax bulkers to a Chinese financial institution, which TradeWinds understands is China Development Bank Financial Leasing (CDB FL).
Broker reports have described the Chengxi-built, 63,260-dwt Ocean Enterprise and Ocean Venture (both built 2016) as sold to Beijing’s Minsheng Financial Leasing (MFL) for $24m each.
Sources informed on the transaction said the price has been correctly reported, but the buyer is another financial institution.
MFL officials confirmed that they are aware of the report; however, they said their company is not the buyer.
Several financial sources in China believe that CDB FL carried out the deal. But the company’s head of shipping, Xiong Jianfeng, declined to comment. “We are a publicly listed company and all our information is published on our website,” he said.
Financial sources said, however, that China Development Bank’s shipping division under former Cosco ship-trading executive Xiong is keen to catch up with competitors, including ICBC Leasing, Bank of Communications Financial Leasing, MFL and CMB Financial Leasing (CMB FL).
Wah Kwong chief executive David Palmer declined to discuss the status of the ships.
Meanwhile, TradeWinds understands that CMB FL also provided lease financing for a Wah Kwong order for two kamsarmaxes at Chengxi Shipyard, although Wah Kwong was the ordering party. TradeWinds reported the order last week.
CMB FL officials were unavailable for comment on that transaction before TradeWinds went to press.
Both leasing deals come as part of Wah Kwong’s readjustment towards an asset-light operating strategy involving closer cooperation with Chinese financial players.
Well-briefed sources said more such deals can be expected in the near future and that the traditional shipowner is in constant contact with practically all the main Chinese leasing houses involved in shipping.
‘Wah Kwong Light’
“This is Wah Kwong moving down to a ‘Wah Kwong Light’, building up a service business using a light equity, but not a no-equity approach,” one source said.
The Ocean Enterprise and Ocean Venture deal is described as a straight financial sale-and-leaseback deal with a long-term charter back to Wah Kwong, but the period and any purchase obligations or options are unknown.
The Chao family-controlled company has been moving in the direction of a service-oriented strategy involving management and supervision work for financial owners, especially Chinese financial institutions, as well as equity partnerships.
It has long participated in equity partnerships with other traditional shipowners in Europe and elsewhere, and has partnered Chinese players including VLCC owner Shandong Landbridge and China State Shipbuilding Corp’s CSSC Leasing.
