Diana Containerships Inc. (DCIX) took everybody by surprise last Monday, when it announced the sale of its 18-year old Panamax containership “Spinel“ (Ex “APL Spinel”) for demolition. The “Spinel” fetched $9.65 million before deduction for brokerage commissions. The 1996-built vessel had been purchased from American President Lines (APL) less than two years ago in a $30 million sale-lease back deal. As part of the deal, APL had agreed to charter the vessel for two years at a daily gross rate of $24,750. The “Spinel” had just been redelivered to Diana from that charter.
Click for larger
This is the fourth time that Diana Containerships is scrapping a vessel following her redelivery from a sale-lease back deal. Vessels “Maersk Madrid”, “Maersk Malacca”, & “Maersk Merlion” had been scrapped earlier this year.
Diana Containerships had previously booked a loss of $36.9 million on the sale of the three Maersk vessels. This time will be no different, as I expect the company to record an accounting loss on the sale of the vessel of approximately $10.5 million. On a cash flow basis, Diana Containerships generated a negative IRR (internal rate or return) of approximately -29%.
The negative investment return underlines once more the huge residual risk of acquiring vessels at premium prices in sale-lease back transactions. This was true for the 1989-1990 built Maesrk vessels, and it is also true for the 1996-built “Spinel”. Unfortunately for Diana Containerships, the “Spinel” might not be the end to this vicious cycle.
The 1995-built sister-ship “APL Sardonyx” is scheduled for redelivery from APL as early as this coming January. The vessel had been purchased simultaneously with the “Spinel” on identical terms. One has to wonder, will it have the same fate as the “Spinel”?
The International Association of Ports and Harbors (IAPH) has issued an urgent call for IMO Member States to adopt the Net Zero Framework (NZF) at the upcoming extraordinary MEPC meeting...
NOAA Ocean Exploration and Fugro have signed a cooperative research and development agreement (CRADA) focused on advancing uncrewed systems for deep ocean mapping and characterization. The partnership aims to enhance...
Japan’s exports fell for the fourth consecutive month as US President Donald Trump’s tariffs continued to cloud the prospects for global commerce, especially for trade involving the US.
16 hours ago
Total Views: 314
Get The Industry’s Go-To News
Subscribe to gCaptain Daily and stay informed with the latest global maritime and offshore news
— just like 107,836 professionals
Secure Your Spot
on the gCaptain Crew
Stay informed with the latest maritime and offshore news, delivered daily straight to your inbox
— trusted by our 107,836 members
Your Gateway to the Maritime World!
Essential news coupled with the finest maritime content sourced from across the globe.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.