Cosco continues to time charter as CMA CGM buys more ships

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Oslo-based MPC Container Ships announced last week that it had agreed to sell six of its 74-ship containership fleet, turning the publicly traded company’s exponential growth strategy on its head.

The sale of the 2007-2009-built Anne Sibum, Stefan Sibum and Grete Sibum, 2007-built AS Federica and AS Faustina, and 2012-built 1,496-tonne AS Riccarda has been agreed for a total of $135 million, more than double their purchase price.

MPCC CEO Constantin Baack told an investor webinar that the sales would be completed in the fourth quarter, that some of the vessels “had charters attached” and that others were “being sold to the existing charterer.”

He said the sale had been a “strategic decision” as the company took into account upcoming drydocking cycles and future tightening of IMO regulations.

Although the buyers have not been disclosed, S&P brokers spoken to by The Loadstar are confident that CMA CGM has snapped up four vessels, including the Stefan Sebum and AS Federica, which it has chartered.

“MPCC was not selling, as they were happy locking in long-term extensions with big increases in daily rent, but CMA CGM must have made an offer they couldn’t refuse,” said one of them.

“The deal probably came about during charter renegotiations, when the company realized it would be cheaper to buy the vessel than to sign a new long-term charter,” he added.

While MPCC intends to use the cash to deleverage its balance sheet, in what Mr. Baack described as a “transition from our growth stage,” it has also been active in locking in an ebit buildup of about $700 million with its revised charter agreements for the remainder of its fleet.

Mr. Baack told investors that since July, MPCC had agreed 13 new or extended three-year agreements with rates “in excess of $35,000 per day.”

He gave the example of the 2005-built, 2,742-TEU AS Constantina, which he said has been fixed for three years at $40,000 per day for an order book of $44 million, compared with a current valuation, according to Vesselsvalue, of $36 million.

And, according to Vesselsvalue data, the charterer is Cosco Shipping, which this month contracted the subpanamax vessel on a three-year time charter at a rate of $39,900 a day.

Mr. Baack “left the door open” to further sales of MPCC’s fleet, but said that in the meantime the company would concentrate on its charter renegotiations with its liner customers.

He stated that Q1’22 positions – when charters expire – have already been covered and that MPCC is now looking at Q2 and Q3 positions.

Mr. Baack confirmed that, as of 1Q22, 75% of the shipowner’s quarterly net profits will be returned to shareholders in the form of dividends.

Source The Loadstar

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