Chinese bulker operator CSC Phoenix has reported that the company might have capacity shortage issues after charter contracts for 15 bulkers expire by the end of June.
According to CSC Phoenix, the company chartered the 15 bulkers from former controlling shareholder Sinotrans & CSC to solve the self-owned capacity shortage issue last year and it would have great negative impact on the company’s profitability if the company could no longer charter these vessels or find replacements when the current contracts expire at the end of June.
CSC Phoenix is also uncertain of when it could complete a plan it announced in March to acquire two secondhand 50,000 dwt bulk carriers.
The company said it is facing the problem of lacking profitable assets and it is making efforts to solve the issue.
CSC Phoenix has experienced a series of setbacks in the past few years. In 2015, state run logistics and shipping giant Sinotrans & CSC sold all its shares in CSC Phoenix to Tianjin Shunhang Shipping, which planned to restructure CSC Phoenix into a dredging company and sold most the company’s bulker fleet.
The restructuring failed in 2016 and Shunhang was seeking an exit from the company by transferring all its shares to Guangdong Wenhua Furui.
However, the share transfer deal fell through last year and the two parties entered into a legal battle due to financial disputes over the deal.
CSC Phoenix reported a net profit of RMB50.8m for the year of 2017, up 423.04% year-on-year.