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Höegh Autoliners Exercises Option to Purchase Third Car Carrier at a Discount

Mike Schuler
Total Views: 1420
October 19, 2022

Norwegian roll-on/roll-off shipping line Höegh Autoliners is taking advantage of the uptick in the market by declaring an option to purchase another car carrier it once owned at a very attractive price.

The company says it will acquire the vessel, Höegh St. Petersburg, for a purchase price of $29.3 million, less than half the $70 million market value based on three different broker estimates. The vessel is being purchased via an option attached to a bareboat charter it had with Pioneer Leasing.

Höegh had actually owned the St. Petersburg since its delivery from Daewoo Shipbuilding & Engineering in 2009 up until 2014 when it was sold to Pioneer Leasing and chartered back to Höegh Autoliners under a bareboat lease agreement. With a capacity of 7,850 CEU, the vessel is one of a series of vessels Höegh built at DSME between 2004 and 2010.

The purchase marks the third bareboat chartered vessel Höegh Autoliners has declared options to purchase so far in 2022, following the vessels Höegh Beijing and Höegh Tracer. The company said the purchase of the St. Petersburg will reduce the long-term cash capacity cost as well as realize additional value from purchase options for leased vessels.

“By the purchase of Höegh St. Petersburg, Höegh Autoliners is again demonstrating its commitment to serve and build a long-term relationship with our customers based on a fleet we own and control,” says Per Øivind Rosmo, CFO of Höegh Autoliners. “All our deep-sea operated vessels are owned (29 vessels) or on charters with purchase options (5 vessels). This gives us limited exposure to the currently tight and expensive Time-Charter market.”

Ownership of the St. Petersburg will be transferred to Höegh in Q4 and she will continue to serve in the company’s deep-sea network.

Höegh Autliners and other ro/ro shipowners have benefited this year from high utilization and increasing freight rates despite challenges on multiple fronts, including geopolitical tensions, supply chain disruptions and rising fuel costs. Still, the outlook for the market remains positive as the demand for car carriers outweighs the supply of ships.

“Höegh St. Petersburg has done a very good job for us and our customers since we built her in 2009 and is very well suited for our established and balanced trade systems from Asia to Europe and US with a return to Asia via South Africa and Australia or the Middle East,” adds Rosmo. “Together with the Horizon class vessels with a capacity of 8,500 CEU and the Aurora class vessels under construction with a capacity of 9,100 CEU, the series of 7,850 CEU vessels built at Daewoo represents one of the largest and most environmentally friendly PCTC fleets. These large and fuel-efficient vessels are an important part of our ambition to continue to reduce our carbon intensity and the journey towards being carbon neutral by 2040.”

Speaking of Höegh Autoliners’ carbon neutrality goals, the company recently  joined the First Movers Coalition, a initiative led jointly by the World Economic Forum and the U.S. Government to accelerated decarbonization in hard-to-abate sectors such as heavy industry and long-distance transport. You can read about that here.

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