A Folk Shipping tanker under arrest in the United Arab Emirates is being auctioned off this month.
The Federal Court of Fujairah will sell the 15,200-dwt product carrier Queen Helena (built 2009), according to exclusive broker CW Kellock.
The vessel, the former Folk Elegant, is lying at anchor off Fujairah following its arrest by National Bank of Fujairah.
VesselsValue assesses the ship as worth $5.89m for further trading.
The lender arrested a sistership last year. The 15,200-dwt Folk Beauty (built 2010) was sold at auction in Singapore in August 2019 to Shan Ship Management of India.
Dubai-based Folk Shipping is also listed with the 6,300-dwt product tanker Jal Doot I (built 2008) in its fleet.
CW Kellock told TradeWinds it has been appointed to market the Queen Helena and assist bidders with the buying process.
The UK shipbroker said the vessel failed to sell during a first auction round between July and September.
The reserve price was $6.8m at that time, but this has been reduced by 10%, to AED 22.3m ($6.08m).
The ship is listed for sale on the official Emirates Auction website, which shows no bids so far.
Pause scheduled
The first round of bidding will end on 14 October. There is then expected to be a gap of between one and three days before the next three-day auction period. The highest bid over the three sessions will be declared the winner.
Sistership Folk Beauty had an estimated market value of $8m when the auction was first announced.
The UAE bank had filed a AED45.2m mortgage claim against the ship.
Folk Shipping last year blamed a long-running commercial dispute with oil trader Mena Energy as the cause of a cash crunch that led to the arrest of the Folk Beauty.
In its court affidavit in Singapore, National Bank of Fujairah said it had provided Folk Shipping with financing to buy the two vessels.
The duo was reportedly acquired for $12.7m each, and both were flagged in the UAE upon delivery.
Ships previously arrested
Folk Shipping operated the vessels in the Middle East and the surrounding region until mid-2018, when Mena Energy had them arrested in Sharjah, TradeWinds reported last year.
The reasons for their arrests were not disclosed in the Singapore proceedings, although National Bank of Fujairah described the oil trader as being a creditor of Folk Shipping.
The bank, unhappy that the ships were enduring a prolonged arrest and not earning income, stepped in during October 2018 and provided security in the form of a guarantee to the Sharjah courts to secure the release of both vessels.
At the same time, the bank agreed a restructuring deal to get the two tankers off Folk Shipping’s balance sheets by transferring their ownership to Panamanian-registered single-ship companies with preferred Panamanian ship mortgages executed by the bank.
Folk Shipping provided the necessary corporate guarantees.
As part of the restructuring agreement, all charter revenue had to be assigned to National Bank of Fujairah.
The IHS Ships Register indicated that ownership of the then Folk Elegant was quickly transferred to Almass Shipping International and the name changed.
Folk Shipping's listed phone number was showing as invalid this week.
