Norway's Klaveness Combination Carriers (KCC) will not be declaring any of its options for new Cleanbu vessels in China while share price weakness persists.
The company previously said it would seek to issue new equity to fund up to four more of the 83,500-dwt combination carriers capable of transporting oil products and dry bulk cargoes.
Speaking on its first-quarter conference call, chief executive Engebret Dahm was asked if his view had changed due to turbulence in markets caused by the Covid-19 outbreak.
"We are dependent on raising new capital to fund newbuilds, and that means that as the market looks today we are not going to declare these options in the short term," he said.
"But luckily we have four options."
KCC said in an investor presentation that the options for the Cleanbu vessels expire between October and January.
Dahm added: "So we believe it makes sense for the company — provided we get the repricing of our shares — to grow the fleet further, but again there are no immediate plans for the next months to declare options."
The stock price fell from a high of NOK 50 ($4.54) in Oslo over the last year to NOK 25 during the worst days of the share price crash in March and April. The shares now stand at NOK 36.
The vessels are being built at Jiangsu New Yangzijiang Shipbuilding in China. KCC has taken delivery of three ships already, and has five more on order.
Rates guidance rises
KCC posted its best quarterly results this week, earning net profit of $4.31m in the three months to 31 March.
The shipowner has been taking period cover on the tanker side to compensate for weak bulker markets.
Dahm said: "We have been through a spectacular boom. We expect there to be downside in the tanker market coming into the second half as the destocking starts up and ships under floating storage will be released."
The company has 100% of its fleet of Cabu combination carriers, which carry dry bulk and caustic soda cargoes, booked for the second quarter.
KCC has updated its Cabu fleet rate guidance for the period from $19,000 to $20,000 per day.
The shipowner has enjoyed strong caustic soda bookings for the second half, with 70% of capacity booked.
For the Cleanbu vessels, KCC also has 100% coverage in the current quarter, with rates averaging out at between $28,000 and $29,000 per day.
The company has 60% of the vessels' tanker exposure booked in the second half.
KCC said it is a fully financed shipowner, with a solid cash position, but there remains a "high" level of uncertainty in its markets due to the pandemic.
