Minsheng Financial Leasing has become the first Chinese leasing house to break into VLCC ownership at what is seen by many as a cyclical bottom for the market.
The company has swooped for two German VLCCs and has an eye on further deals as it looks to build ties with major charterers East of Suez.
Thomas Kaas Christiansen, head of Minsheng Financial Leasing's new European office, confirmed that the company has purchased two VLCCs from Dr Peters.
It has paid below $60m each for the 297,000-dwt DS Vision and DS Venture (both built 2011), in a pact which includes a long-term time charter to Cosco Shipping Energy Transportation.
Contrary to some rumours in the market that the transaction was a sale-and-leaseback deal allowing Dr Peters to refinance the ships, Minsheng is taking ownership of the tankers.
The deal extends a trend of Chinese lessors increasingly behaving like conventional shipowners. However, it marks new turf for these companies, which have previously been vocal about avoiding big tanker ownership given the risks associated with a major oil spill.
Christiansen credited Jerry Yang, Minsheng's head of shipping in Beijing, with structuring an unusual agreement with a pricing arrangement that "is a function of many factors".
Minsheng is buying a Dr Peters entity that owns the vessels, in what the former Lorentzen & Stemoco boss described as closer to a merger-and-acquisition deal than a conventional sale-and-purchase transaction.
He said a significant amount of the price has been paid up front but declined to explain it further, other than to say that the deal does not include any earnings participation for the sellers, and that Minsheng as a buyer is comfortable with its exposure to the remaining price variables.
The ships have seven to eight years remaining on charters to Cosco, which brokers suggested were originally signed at in excess of $53,000 per day in a strong market.
“The relationship with Cosco is worth more than the price we have paid,” said Christiansen.
“These Dalian ships are better than the price. Euronav knows that. Maersk knows that.”
Few modern VLCCs are available for sale in the market today and even fewer come with such lucrative time-charter employment.
However, Christiansen says Minsheng has the appetite for more VLCCs if they were available and has been looking at other transactions in the sector.
“We want to be more like a conventional shipowner and approach deals from a conventional shipowner’s point of view; but using the stamina and muscle of a Chinese leasing company,” Christiansen explained.
However, Minsheng will, not be following the lead of many major VLCC market players, who typically focus on spot business rather than an industrial model.
“We don’t understand why VLCC owners avoid long-term time-charter deals with the majors,” Christiansen told TradeWinds.
Minsheng is not looking exclusively to China for business relationships and believes there is an opportunity to establish relationships with companies in the Middle East, he added.
