NewLead Holdings has revealed it took over Greece’s Kritsas Shipping in March, but one of the owner’s former vessels has just been arrested and sold at auction, plus another vessel owned by NewLead.
NewLead acquired 100% of the share capital in Kritsas Shipping on March 22 from Dimitrios Kritsas through a transfer of shares agreement. The company has since been renamed NewLead Shipmanagement SA.
The transaction included the acquisition of two handymax bulk carriers, Aurora Onyx (47,305 dwt, built 2002) and Aurora Pearl (46,709 dwt, built 2000), and their vessel holding companies, Onyx Corporation SA and the Pearl Corporation SA, which were acquired for $1 each, according to NewLead’s financial results for its fiscal year 2015.
But NewLead’s ownership of the Aurora Onyx was shortlived, which a spokesperson* for NewLead said was due to the seller’s failure to acquire the consent of the mortgagee bank HSBC to change the beneficial ownership of Onyx Corporation.
The vessel was arrested on April 15 due to non-performance of the contractual obligations under its mortgage agreement with HSBC, which was signed on November 23, 2010.
On May 19, the court of South Africa ordered Aurora Onyx to be sold and the vessel was delivered to its new owners on May 25, NewLead said.
Aurora Pearl is also mortgaged from HSBC, and NewLead says the vessel’s seller also failed to gain approval from the bank to change the beneficial ownership of Pearl Corporation. On April 26, the vessel-owning company was served with a notice of acceleration, termination and demand pursuant to the loan agreement with HSBC, NewLead told Splash.
“As of the today the bank is seeking ways to exercise its rights against Aurora Pearl. The company’s intention is to assist HSBC in exercising its rights and remedies for the smooth conclusion of this matter,” a spokesperson for NewLead told Splash.
HSBC has agreed not to hold NewLead or its CEO Michael Zolotas liable in any way for its acquisition or operation of the vessels.
“HSBC has agreed to pay NewLead the sums which NewLead has informed the bank to relate to the vessels’ due and unpaid trade debts. Moreover, HSBC agreed to pay all the vessel’s expenses from the day the bank, HSBC, took over until the delivery of Aurora Onyx to her new owners,” the spokesperson continued.
Another NewLead-owned handymax, NewLead Castellano (pictured; 35,500 dwt, built 2013) was served with a warrant of arrest on April 19 by noteholders Ray Capital Inc, Cheyenne Holding Ltd, Oppenheim Capital Ltd and Labroy Shiptrade Limited.
NewLead also entered into a BIMCO management agreement to manage a handymax, Aurora Amethyst (48,900 dwt, built 1999) owned by Philippines-based Aurora Shipping Inc and formerly managed by Kritsas. The management contract was for three months before Aurora Shipping sold the ship for demolition in Bangladesh on May 25 at a price of $2.75m.
In other NewLead news, the company says it plans to exit the coal business and sell its Viking Prep Plant, Viking Acquisition Group and Five Mile Investment coal mining assets before the end of this year.
NewLead claimed to have acquired Viking mine in September 2013 and the Viking prep plant on December 2013, and was granted access to develop and mine the Five Mile mine in 2013.
However, a series of press releases in late 2015 clarified that the company has not completed acquisition of the title and excavation rights of the Five Mile mine, in spite of stating in a press release in January 2014 that the purchase price had been paid and the acquisition was under way.
NewLead released a series of statements in 2015 in which it explained that it had not closed millions of dollars’ worth of transactions to buy coal mining assets and sell coal to international buyers, despite representing in press releases in 2013 that the transactions were in the works.
A spokesperson for NewLead explained that this was “due to a number of factors including but not limited to the failure of the parties to reach acceptable definitive terms for such acquisition, the collapse of coal prices, as well as adverse coal market conditions especially with regard to the export and transportation of coal that continues today”.
The company, which is listed in the OTC Pink market, plans to expand its fleet of dry bulk and bitumen carriers by “capitalizing on opportunities that arise in the market” while asset values remain low, a NewLead spokesperson told Splash.
* This article has been updated to reflect comments from NewLead, explaining the changes in beneficial ownership of assets, which were not included in the original version of this article.