Great Eastern to splash out $400m on newbuildings

Around $200m will be used for six vessels on order, comprising five 81,000 dwt kamsarmax bulk carriers and one 50,000 dwt medium-range (MR) tanker. The remaining $200m will be spent on a newbuilding jack-up rig.

Two of the bulk carriers, ordered in 2012 from Japan’s Tsuneishi Shipbuilding, will be delivered in mid-2015, while the remaining three, being built at China’s Yangzijiang Shipbuilding, are expected to join the fleet at different stages in 2016.

“Despite weak freight rates so far this year, due mainly to continued oversupply of vessel capacity, dry bulk shipping earnings are forecast to recover as demand for both bulk and minor bulk commodities rises,” said the group’s chief financial officer G Shivakumar.

“We would like to be able to offer the market quality dry bulk tonnage when freight rates become, and stay, more remunerative. In any case, we are comfortable with our entry level in the dry bulk market, as prices of newbuildings in this sector have since gone up sharply.”

The company will also, as it has always done, remain on the lookout for acquiring young secondhand dry bulk carriers that may become available for sale.

Great Eastern had also placed orders in 2012 with China’s STX for three MR tankers, but the Dalian shipyard ran into financial difficulties, and the orders for two of the tankers were cancelled, while the third was moved to STX’s Korean facility. The company has yet to receive a refund from the yard for the cancelled ships.

The Indian shipowner, which is also into the offshore segment through its subsidiary Greatship, has a $200m rig on order, which is scheduled to be delivered by February 2015. The company already has three such rigs out on profitable employment.

Shivakumar said that 50% of the planned capital expenditure would be employed during the current fiscal, while the remainder would be spread out equally over the subsequent two financial years.

Add Seatrade Maritime News to your Google News feed.