First Ship Lease Trust Management says it has failed to find employment for two of its panamax containerships, which it has opted to sell for a total of $10.8m in cash. Brokers say the vessels are bound for demolition in India.
The Japan-built vessels Ever Radiant (4,229 teu, built 1994) and Ever Respect (4,229 teu, built 1995) have been on bareboat charter to Evergreen Marine since 2006, which FSLT said terminates at the end of this month. According to brokers’ data, the ten-year charter had a three-year extension option attached, which was not exercised.
In mid-January, brokers reported the two 20,244-ldt vessels had both been sold to Indian scrap buyers for $272/ldt or around $5.5m per vessel.
The boxships’ sale will incur a $4.2m loss in 1Q 2016, following a writedown of approximately $1m last quarter, FSLTM said.
The Singapore-listed shipowner plans to use $800,000 of the sale’s proceeds to repay part of its outstanding loan facility, which the company said would reduce its quarterly loan repayment by around $320,000 from the first quarter 2016.
“Despite the Trust’s best efforts, given the current container market environment, further employment for the vessels could not be found and the decision to dispose of them was taken swiftly to protect unitholder value. The proceeds will be primarily used to reduce the Trust’s outstanding debt and scheduled debt repayments going forward,” Alan Hatton, CEO of FSLTM, said in a statement.
FSL Trust’s fleet now stands at 22 vessels comprising five containerships, twelve product tankers, three chemical tankers and two crude oil tankers.