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Mitsui OSK Lines to shut Singapore bulker operation

Mitsui OSK Lines to shut Singapore bulker operation
Mitsui OSK Lines (MOL) is shutting down its Singapore dry bulk shipping unit following what it described as a “drastic business review”.

Releasing further details of a restructuring of its dry bulk and container shipping businesses on which MOL is taking a JPY179.3bn loss in the fourth quarter ended 31 March 2016, it said it would closing down Singapore-based bulker operation MOLBC.

MOLBC was set up in 2012 to charter free dry bulk vessels in the spot market.

“However, the company deemed it necessary to conduct an urgent review of its business models due to the prolonged sluggish dry bulker market, and decided to implement a major scale-down of the fleet to minimize its market exposure by free vessels, dissolve MOLBC, and transfer its business operations from Singapore to Tokyo,” MOL said in a statement.

MOLBC is slated to suspend its operations by September this year. It said about half of the mid-to-long term chartered vessels under MOLBC would be transferred to Tokyo to meet expected cargo demand, while it would move ahead with returning the remaining vessels.

Breaking down the extraordinary loss MOL said it would record a loss of JPY40.5bn on early cancellation of time charter contracts by MOLBC, a JPY30.5bn loss on the transfer of contracts from MOLBC, a JPY36.9bn loss on the sale of capsize bulkers, and a further JPY9.5bn on the early cancellation of capesize chartered in contracts.

In its containership business it is recording a JPY60.7bn extraordinary loss on impairment of asset values, and a JPY1.2bn loss on the sale of vessels.