By Michelle Wiese Bockmann
Scorpio Group has probably lined up a bareboat rate of about $50,000 daily for the long-term charter of about 15 years’ duration of three, 19,200 TEU box ships that market reports suggest the shipowner has just ordered, according to Arctic Securities.
The Oslo-based investment bank said the charter rate hasn’t been disclosed and its estimates were based on a ‘back-of-envelope’ assessment of financing costs with a return on investment at 10%.
The orders of the boxships, which are rumoured to be costing $150 million each, appear to be the biggest ever, surpassing contracts for five 19,000 TEU units placed by China Shipping Group back in May, 2013, according to data from London-based Clarkson Research Services.
Clarkson also has orders for two 19,000 TEU ships placed on Aug. 12 for China’s Bank of Communications Financial Leasing at Daweoo Shipbuilding, with three previous newbuilding orders by BoCom Leasing (for 18,400 TEU vessels) placed a year ago said to be going on long-term charter to MSC.
Reports suggest that the Scorpio Group is also going to be leasing out the vessels to MSC, Arctic said.
Scorpio, with listed companies Scorpio Tankers and Scorpio Bulkers, has the biggest newbuilding orderbook, with 140 ships including bulk carriers and product tankers, contracted at shipyards in Asia, with this marking its first foray into the container ship market.
“The vessels are due for delivery in 2016 at which point we estimate net fleet growth in the Post-Panamax segment (8,000+ TEU in our model) of 8.3% versus a demand growth of 7.7%,” Arctic said in the report.
“As such, the market should be relatively balanced at that point. However, we see Scorpio’s move into long-term bareboat deals in containers as less market related and more as a way of creating a solid contracted cash flow for future MLP (Master Limited Partnership) drop-downs.
“Scorpio has been talking about the potential of an MLP and while tankers/bulkers are likely to see a somewhat soft yield (due to short-term nature of these market), the long-term business of container tonnage would act as a counterweight”
Michelle Wiese Bockmann is Editor, Europe Distillates and Shipping at OPIS