Oslo: John Fredriksen has shifted ships around between two of his largest firms, Golden Ocean and Ship Financial International. The move takes many capesizes off Golden Ocean’s books and positions itself for “interesting opportunities” that might arise in the coming months, the company said. Golden Ocean Group has agreed with Ship Finance International a sale leaseback transaction of eight capesize vessels currently owned by Golden Ocean.
The vessels are named Golden Beijing, Golden Zhoushan, Golden Magnum, Battersea, Belgravia, Golden Zheijang, Golden Future and KSL China and were built in Korea and China between 2009 and 2013. The total acquisition price will be $272m, or $34m average per vessel. The vessels are expected to be delivered to Ship Finance by the end of July.
The vessels will be chartered on time-charter basis to a subsidiary of Golden Ocean for a period of 10 years. The daily base charter rate will be $17,600 during the first seven years, and $14,900 thereafter. In addition, there will be a 33% profit share for revenues above the base rate, calculated and paid on a quarterly basis. Golden Ocean will have a purchase option after year 10 of $112m enbloc, and if such option is not exercised, Ship Finance will have the option to extend the charters by three years at $14,900 per day.
Golden Ocean has also reached agreements with several of its yards to delay the construction of the newbuilding contracts with about 75 months on aggregate basis. “This will postpone capital expenditure and possible cash burn on sailing vessels as the market is currently below cash break even,” the company said in a release.
After this it is expected that six vessels will be delivered in 2015, 15 vessels in 2016 and four vessels in 2017.
“There is still work in progress to improve delivery positions further,” Golden Ocean said.
Golden Ocean has also agreed to sell four of the capesize vessels currently under construction at a Chinese yard to an unspecified third party. The company will finalise the construction of the vessels and transfer ownership to the new owner upon delivery from yard. For three of the vessels Golden Ocean will charter the vessels back on time charter for six to 12 months. The sales price is in line with the original contract price, Golden Ocean said.
Further, the company has sold the vessels Channel Alliance and Channel Navigator to another unspecified third party, as part of the company’s fleet renewal. These vessels will be delivered to new owners this June.
“These various initiatives are taken in order to strengthen the cash position and balance sheet of the company in the current weak market. Golden Ocean is not abandoning its strategy to be a much needed consolidator within the industry, but is rather positioning itself for interesting opportunities which are expected to be available over the coming months,” the company maintained.