China Merchants Ship Sold 2 10-year-old VLCC Ships At 520 Million

- Dec 02, 2019-

On the evening of November 29, China Merchants shipping (601872. SH) announced that its overseas single ship company and the independent third party advantagetankers LLC had signed an agreement to sell two VLCC tankers of 298000 and 296000 DWT, respectively, with a total price of about 521 million yuan.

According to the proposal on disposal of some ship assets approved by the 29th meeting of the 5th board of directors of the company, the company's overseas single ship company has signed an agreement with the independent third party advantagetankersllc to sell two VLCC tankers. At present, the agreement has come into effect and is expected to complete the delivery in the near future.

Advantage tankers LLC is a professional tanker management company established in 2014 and registered in the Republic of the Marshall Islands with offices in Geneva and London. At present, it has 11 single purpose tankers, including 5 aframaxes and 6 suezmax tankers built in 2009-2012.

The VLCC "new Medal" and VLCC "new globe" sold this time, with load tons of 297556 tons and 296481 tons respectively, were constructed and completed by Shanghai Jiangnan Changxing Shipbuilding Co., Ltd. and Bohai Shipbuilding Heavy Industry Co., Ltd. in January 2009 and February 2009 respectively, which are non energy saving and environmental protection ships. Both ships are ordered by China VLCC and operated by China Yangtze River Shipping Group Nanjing Oil Transportation Co., Ltd.

At present, the company's tanker fleet has 53 VLCC and 5 original aframax tankers with 100% equity. The two tankers sold this time are non energy saving and environmental protection ships, with relatively poor market competitiveness and high fuel and maintenance costs. After careful study by the company, in order to further optimize the ship type, age and cost structure of the tanker fleet, consolidate and further enhance the market competitiveness of the company's fleet, the company decided to wait for the opportunity to sell with the approval of the board of directors.

China Merchants said the sale of assets is expected to bring about about 28.01 million yuan of non operating income to the company. The sale of two VLCC tankers is expected to lead to a slight reduction in the transportation capacity of the company's own tankers in the short term, which has no impact on the company's sustainable operation ability.