Eastern Pacific behind OSG product tanker deal

Idan Ofer’s Eastern Pacific Shipping has added another vessel to its fleet with the acquisition of Overseas Shipholding Group’s 2019-built MR2 product tanker Overseas Gulf Coast.

Having just reported a net loss of $0.844m for the fourth quarter of 2020, OSG revealed in its earnings call that it had sold the vessel in the low to mid-$30m. The vessel is valued at around $33.2m according to VesselsValue, and was acquired as part of OSG’s strategy to have two ships that could be placed in the US military’s tanker security program (TSP).

“The TSP at that time was under consideration as a program to support the transportation fuel needs of the U. S. Military during times of national emergency. The legislative process moved more slowly than expected, and the program was not signed into law until December 2020. However, no funding was authorized. Although we are hopeful that funding will be authorized in the U.S. government fiscal 2022 budget, this is not certain,” OSG CFO Dick Trueblood explained.

OSG CEO Sam Norton told the earnings call that the vessel is debt-free.

“So, it represents a pretty significant source of liquidity for us and frankly, is the least strategic asset that we have of all the assets that we have. And so in order to give us ample liquidity to get us through the period of uncertainty that we’re currently competing, the decision was taken to sell that vessel,” Norton explained.

Splash can reveal that Singapore-based Eastern Pacific Shipping is the taker of the ship. Eastern Pacific has been one of the most active buyers in shipping over the last 12 months, and, including newbuilds, now has a fleet size of around 170 vessels totalling 17m dwt.

Grant Rowles

Grant spent nine years at Informa Group based in London, Sydney, Hong Kong and Singapore. He gained strong management experience in publishing, conferences and awards schemes in the shipping and legal areas, working on a number of titles including Lloyd's List. In 2009 Grant joined Seatrade responsible for the commercial development of Seatrade’s Asia products. In 2012, with Sam Chambers, he co-founded Asia Shipping Media.
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