prem putli mercator bulk carrier

Polaris Shipping Pays $44.4 Million for 20-Year-Old Bulker

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February 11, 2013

Prem Putli, image courtesy Mercator

(Bloomberg) — A South Korean shipping company with 10 vessels hired out to Vale SA, the world’s largest iron-ore producer, bought an 11th vessel for the mining company to use, according to Clarkson Plc, the biggest shipbroker.

Polaris Shipping Co. paid $44.4 million for the Sri Prem Putli, a 20-year-old ore carrier converted from an oil tanker in 2009, Clarkson said in a weekend report. The purchase price is more than three times the $13.9 million estimate of the vessel’s worth by, an online valuation service owned by London-based shipbroker Seasure Shipping Ltd.

The cost for the so-called very large ore carrier incorporates the value of a 14-year charter to Vale, according to Clarkson. The Sri Prem Putli is owned by Mumbai-based Mercator Ltd., according to filings. Polaris in August paid $60 million each to buy 10 converted ore carriers owned by Vale that Seasure valued at $16.1 million apiece, which were then leased back to the mining company.

Vale declined to comment on the Clarkson report, a Rio de Janeiro-based spokeswoman said by e-mail. Calls to Seoul-based Polaris made outside of office hours were not answered.

Vale is looking to sell its fleet of ore ships, the world’s largest commodity carriers, that the company ordered to cut costs on the 35-day voyage to Asia, the destination of about 45 percent of the steelmaking commodity exported from Brazil. Chief Executive Officer Murilo Ferreira said in December the company planned to sell 19 of its Valemax ships.

– Michelle Wiese Bockmann, Copyright 2013 Bloomberg.

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