Friday, October 30, 2015

CHINA SHIPPING TO BUY UP TO 11 MEGA SHIPS

Why did China Shipping do this, given the consolidation and current financials for the industry?  Does it mean a SOE can waste money?

 

CSCL to lease up to 11 ships with capacity for 21,000 TEUs each

Chinese liner giant China Shipping Container Lines pointed to the cost and environmental benefits of ultra-large large containerships as the primary reasons for the new order.

   China Shipping Container Lines Co. Ltd. may acquire up to 11 container ships with 21,000 TEUs of capacity.
   In a deal with a complex structure, CSCL said a Hong Kong based subsidiary has entered into bareboat charters to lease six 21,000-TEU ships for 12 years from China Shipping Nautigreen Holdings Co. Ltd, described as an “indirect wholly owned subsidiary of China Shipping.” There is also an option for five more similar size vessels.
   In a filing with the Hong Kong Stock Exchange, CSCL noted larger ships are being favored by the industry because of “optimization of fleet structure, economies of scale and fuel cost reduction.”
   CSCL also said the new ultra-large containerships “adhere to low-carbon environmental protection initiatives.”