Pan Ocean’s Vale COA deal slashed by $1.3bn

Pan Ocean’s Vale COA deal slashed by $1.3bn

South Korea’s Pan Ocean has agreed with key client Vale to shave off a $1.3bn from a consecutive voyage contract (CVC) it inked with the Brazilian miner in 2009, citing lower than anticipated fuel bills.

The contract of affreightment signed on September 21, 2009 called for the shipping of 238.4m tons of iron ore from Brazil to China over a 19-year period, marking one of the biggest shipping deals ever won by a Korean shipping firm.

The initial deal was worth $5.8bn, however, Pan Ocean has now revealed that it has agreed to slash this to $4.5bn thanks to lower bunker prices than had been forecast nine years ago.

In a release to the Singapore Exchange, Pan Ocean got its decimal points wrong when describing the change in the deal leading many to report that it had originally been worth $58bn, and the writedown was worth $13bn.

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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1 Comment

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    max
    January 3, 2019 at 5:56 pm

    Does that imply that a $5.8bn consecutive voyages contract was signed without a bunker adjustment clause? No one can believe that!