It is known that China Merchants Energy Shipping (CMES) plans to place an order for 10 newbuilding VLCCs, amid recently depressed shipping market.
CMES made an official announcement on February 17th that it would arrange about CNY 2.893bn ($460m) through private placement of new shares (below 858m shares, CNY 3.37 per share).
New order for tankers can have positive effect in the long-term period, despite currently troubled shipping market, and CMES would be financed from overseas banks for the rest of the tankers' newbuilding prices, said CMES.
CMES sees that this would be the right time to expand its fleet and achieve improvement of competitiveness and cost reduction. Newbuilding price of VLCC, at the present, is around $90m-level, down by 37% from the peak at September 2008.
The Chinese shipping company would manage all of CNY 2.893bn of private share placement for VLCC newbuildings for over three years and is known that CMES plans to expand its tanker fleet up to 10m dwt (including 30-some VLCCs), in the end.
As of July 2011, CMES secures 4.72m-dwt tanker fleet - 13 VLCCs, one 150,000-dwt suezmax and seven 110,000-dwt aframaxes.
Meanwhile, if CMES would be able to secure the money in early 2012, it plans to award ten newbuilding VLCCs immediately, which are to be delivered in 2013 (six vessels) and 2014 (four).