A Piraeus court has removed yet another ship from Eletson Corp's dwindling oil tanker fleet, starting a new chapter in the Greek company's long-running row with Chinese lessor CSIC Leasing.
TradeWinds reported in April how CSIC arrested three Eletson panamaxes it had refinanced in a leasing deal four years ago.
Court documents show that Eletson has now lost control of the fourth and final ship refinanced in the arrangement — the 69,500-dwt Polyaigos (built 2005).
In a verdict delivered late last month, a Greek judge removed the Polyaigos from Eletson's managed fleet, following its repeated failure to keep up with scheduled payments under a bareboat agreement with CSIC.
Pending the outcome of arbitration between Eletson and CSIC in London, the Piraeus court approved a request submitted by the Chinese leasing company to appoint Bernhard Schulte Shipmanagement as bailee and temporary manager of the Polyaigos.
Bernhard Schulte, however, has not been able to do much with the vessel since, let alone to start trading it.
According to sources close to the matter, bailees visiting the Polyaigos this month said it had been left unmanned and unguarded and lacked all vital papers and documentation.
At the same time, unpaid suppliers and service providers of the Polyaigos have started cropping up in recent weeks, some of which have asked courts to detain the vessel in Greek waters until their demands are met.
One such service provider is the ship repair yard at Salamis, near Piraeus, where the Polyaigos is moored.
Financial squeeze
Spanopoulos firm New Hellenic Shipyards is said to have charged CSIC unit Azure Nova Autumn Co, the Polyaigos' registered owner, about $100,000 in fees for parking the vessel there under the terms of a repair and maintenance contract.
Azure Nova claims that Eletson concluded the Spanopoulos contract shortly before the Greek court announced its verdict in their dispute last month.
The Chinese leasing unit also claims that Eletson signed the contract in Azure Nova's name without the latter's knowledge or consent, and asked Greek maritime authorities to investigate the matter.
Managers at Eletson and Spanopoulos did not respond to a request for comment.
Eletson refinanced the Polyaigos and the three other panamax tankers with CSIC Leasing in 2017. It was the Chinese company's first ship lease financing transaction, according to a statement at the time by Watson Farley & Williams, which advised on the deal.
Under the $65.5m transaction, CSIC leased the quartet back to Eletson under bareboat charters.
Eletson used the proceeds of the deal to refinance a balloon payment of loans secured on the vessels, which it bought from Greek peer LMZ Transoil during the 2007 shipping boom for more than $60m apiece.
After Eletson fell short and then ceased payments, CSIC Leasing issued notices to terminate the bareboat charters on all four ships and asked Eletson to redeliver them, which it refused to do.
Eletson also had trouble with other tankers it refinanced in Chinese leasing transactions in 2017.
In past statements, Eletson blamed the fallout from Covid-19 for holding up the planned restructuring of the tankers' refinancing. The company, however, was also struggling to service bonds yielding a whopping 12% coupon.
