Norway’s Stolt-Nielsen will not be making any more forays into the secondhand market any time soon.
Chief executive Niels Stolt-Nielsen told a conference call that the Oslo-listed chemical tanker group has been active in sale-and-purchase over the past two to three years.
In March, the owner bought its youngest ships in a deal potentially worth upwards of $50m.
Stolt Tankers, the Netherlands-based chemical tanker division, said two modern 15,000-dwt stainless steel vessels built in 2018 and 2019 were added for inter-Caribbean services.
Brokers identified the tankers as the 15,100-dwt Turkish-built Chemical Atlantik (built 2018) and Preveze 1 (built 2019).
The CEO said these two vessels were still acquired at a discount to the newbuilding equivalent price.
“But today we don't expect to be able to take up any further secondhand ships because the prices are too high,” Stolt-Nielsen told analysts.
“If we’re going to pay a high price, that high price will be for newbuildings,” he said.
And the Norwegian boss added: “With a fleet of 160-plus ships we need to build ships, and we will order new ships eventually.”
Some of the owner’s tankers still date from the 1990s.
Beyond 30 years of age?
Stolt-Nielsen was asked if the company would operate vessels until they were 30 years of age.
He replied: “Yes. We have historically sailed our ships [to 30], some beyond 30 years.”
“Depending on the newbuilding capacity we will most likely have to sail them until 30 years. We are at least maintaining our ships as if they are going to sail to 30 years,” the CEO added.
Stolt-Nielsen explained that the company saw several years ago that the market would tighten due to the small orderbook.
The decision was then taken to agree contracts of affreightment (COAs) for no longer than a year, and not add any options to those deals.
“We are benefiting from this now so we are not locked in,” he said.
Stolt-Nielsen also said the company remains committed to its long-mooted initial public offering (IPO) for Stolt Tankers, to be in a better position to drive sector consolidation.
‘We are ready’
“We are ready, it's just a matter of when the timing is right, both in the shipping market and the equity market,” he added.
“Our balance sheet is getting stronger by the day. We are in a position now to do an IPO. It is something we discuss at each quarterly board meeting,” the CEO explained
The boss said in January 2022 that he would be standing down once a successor is found.
“We are continuing to search. We have some very good candidates that are being interviewed and hopefully, we will be in a position to announce [this] relatively soon,” the outgoing CEO said. “It’s better to use the time necessary to find the right candidate.”
