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Fred Cheng slams VLCC talk as ‘fake news’, aims to grow cape fleet

Fred Cheng, the former tanker tycoon, has rubbished broking reports linking him with a return to VLCCs, telling Splash he’s still focused on building up a capesize fleet. Cheng’s Shinyo International is listed by Allied Shipbroking as the buyer of a Gener8 Maritime VLCC still under construction at Hanjin Heavy’s yard in the Philippines. Other broking reports have stated that an unspecified Hong Kong owner has come in for the 320,000 dwt Gener8 Nestor, which is due to deliver in the final quarter of this year. The deal, many brokers claimed, is subject to a five-year time charter tender to China’s Unipec

“I have no idea how this fake news came about,” Cheng told Splash today. “I’ve been asked by so many people, but I did not buy the ship,” he stressed.

Last month Splash reported that Cheng, the former boss of Golden Ocean, had bought his second capesize – the Bulk Prosperity, to be renamed Shinyo Brilliance.

“I’m still looking at older capes,” Cheng told Splash today.

However, he cautioned he was not close to sealing any new deals since competition for bulkers was so intense.

“Every ship purchase in dry bulk today is an auction for cash buyers only,” Cheng said. He admitted that cape prices were on the rise, saying: “It’s much too late to catch the bottom, but there is still some upside left.”

Cheng has been linked numerous times with making a VLCC comeback in recent years, however he feels that particular market cycle still has some way to run before investments become tempting again.

“VLCC prices will continue to drop and the spot market will take a true dive within the next 12/18 months. Perhaps then there will be some opportunities,” Cheng said, adding: “What I like about shipping today is that the cycles are shorter, which gives oldies like myself some more shots at it.”

Cheng founded Golden Ocean in 1978. Mistimed VLCC orders and the Asian financial crisis saw him sell the company to John Fredriksen in 2000. The following year he founded Shinyo International while also running a number of VLCCs for a short time in a joint venture with Capt Charles Vanderperre, the founder of Hong Kong’s Univan Ship Management.

Meanwhile, if confirmed, the sale of the Gener8 Nestor would leave the Peter Georgiopoulos-led Gener8 Maritime with just one newbuild to deliver. The Gener8 Ethos is scheduled out of Hanjin’s Subic yard this April. Brokers have put the price for the resale of the Gener8 Nestor as low as $75m, better even than yesterday’s “historically low” $77.5m Frontline revealed it had paid per unit for two Daewoo resales delivering later this year.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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