- As Frontline’s Attempt to Stop DHT’s VLCC Acquisition Falls Through in Court
Monaco-based dry bulk shipping company Scorpio Bulkers has taken delivery of all of its newly constructed vessels from the company’s 48-ship newbuilding program.
The company said that the final ship from the batch, SBI Jive, joined its fleet earlier in April. Featuring 81,300 dwt, the Kamsarmax was delivered from Hudong-Zhonghua shipyard on April 5, VesselsValue data shows.
Five other newbuildings were delivered during the first three months of the year, including the Ultramaxes SBI Samson and SBI Phoenix, constructed by China’s Chengxi Shipyard, and the Kamsarmaxes SBI Parapara, SBI Swing, and SBI Mazurka, which were built by Hudong-Zhonghua (Group).
Additionally, the company said that, as of March 31, 2017, all contracted amounts “have been paid in full and we have no further obligations due to any shipyard.”
The deliveries were unveiled as part of Scorpio Bulkers’ financial report for the first quarter of 2017, in which the company said that it managed to narrow its GAAP net loss.
Namely, for the quarter ended March 31 the shipping firm’s net loss stood at USD 34.6 million, compared to a net loss of USD 58.3 million seen in the same period of 2016.
Time charter equivalent (TCE) revenue earned during the quarter for the Kamsarmax fleet was at USD 9,164 per day, while the company’s Ultramax fleet earned USD 8,230 per day.
TCE revenue reached USD 34.6 million for the first quarter of 2017 and is associated with a day weighted average of 47 vessels owned and one vessel time chartered-in compared to USD 10.2 million reported during the prior year quarter.
Scorpio Bulkers said that the TCE rates continued the sequential quarter on quarter growth experienced since recovering from the all-time lows seen in the first quarter of 2016.
“The increase in rates is attributable to increased worldwide demand across all bulk sectors, regions and commodities, as well as a diminishing supply side as fewer vessels are now on order,” according to the company.
Overall TCE revenue increased significantly versus the prior year period due to the increase in rates combined with the increase in revenue days associated with the growth of Scorpio Bulker’s fleet.
In the meantime, the Supreme Court of the State of New York has rejected Frontline’s attempt to stop DHT’s acquisition of very large crude carrier (VLCCs) fleet from BW Group.
On April 18, 2017, Norwegian-based tanker company Frontline filed a complaint against DHT Holdings, BW Group Limited, and DHT Board of Directors alleging that the crude oil tanker company directors breached their fiduciary duties related to the vessel acquisition agreement inked in March 2017 with BW, a Bermuda-incorporated LPG carrier.
Under the terms of the deal, DHT agreed to acquire 9 VLCCs and newbuild contracts for 2 VLCCs from BW.
The complaint sought to prohibit the consummation of the deal, including the delivery of the VLCCs to DHT.
DHT said the allegations were without merit.
On April 19, 2017, the court rejected Frontline’s arguments and issued an order denying Frontline’s motion for a preliminary injunction and temporary restraining order.
The reasons cited by the court for denying Frontline’s motion included the “inexcusable timing” of Frontline’s filing, Frontline’s failure to establish that the court has jurisdiction over either DHT, the company directors or BW in addition to its failure to establish a probability of success on its claim that the transaction violated applicable Delaware law at this stage of the case.
Earlier today, DHT informed that it has taken delivery of the first vessel from the batch, the 299,500 dwt tanker DHT Utik, previously known as BW Utik. The second unit is slated for delivery to DHT on April 21, 2017.
The company said that it expects to have all nine vessels in the water during the second quarter 2017.
World Maritime News