Knightsbridge Orders Pair of Capesize Bulkers, Sells VLCC

VLCC Mayfair, image: Knightsbridge

Knightsbridge Tankers announced today signed contracts for a pair of 182,000 DWT Capesize bulk carriers new-builds from Japan Marine United Corporation (JMU).

This latest order brings the total number of Capesize bulkers ordered so far this year to around 50, according to C.R. Weber’s Basil Mavrolean during a panel discussion at yesterday’s Connecticut Maritime Association conference. This order has been placed amid market conditions that leave bulk carriers of all sizes mostly, if not severely, unprofitable due to a global oversupply of ships.

Knightsbridge’s Board believes that while these ships are being built a period of oversupply in the dry bulk sector will persist, however by the expected delivery date in 2015, they believe “utilization of the dry bulk fleet is expected to improve,” according to their release.

Shipowners like Knightsbridge are taking advantage of highly depressed shipyard prices to order new, more efficient vessels which will help to reduce the intense overhead associated with high oil prices, the biggest single expense maritime shippers contend with over the life of a ship.

The design provided by JMU is no exception, although no specific details were given about what design improvements will be made to these vessels.

In addition, Knightsbridge also announced the 1995-built, 298k DWT VLCC Mayfair was sold at a loss of approximately $5.3 million with net cash proceeds of approximately $4 million after debt repayment.

“The acquisition of the Capesize newbuilding contracts and the sale of the Mayfair is part of Knightsbridge’s strategy to renew and grow the fleet,” notes Knightsbridge. “After the above transactions the company’s fleet consists of four Capesize bulk carriers and two Capesize bulk carrier newbuilding contracts.”