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Sinotrans spends $100m on oil tanker

Article-Sinotrans spends $100m on oil tanker

Sinotrans spends $100m on oil tanker

Hong Kong: Hong Kong-listed Sinotrans Shipping has agreed to buy a 2008-built oil tanker for $100m from MS Tanker Shipping, a price deemed fair for the company to pay in cash. MS Tanker Shipping is a jointly controlled entity in which Sinotrans Shipping holds 50% stake. "It is intended that payment of the consideration will be satisfied entirely in cash, which is expected to be funded by internal resources of the company and/or bank borrowings," Sinotrans Shipping said in a statement. The scheduled date of delivery for the oil tanker is between 1 April and 31 May this year. Upon delivery, the Hong Kong-flagged Grand Sea will be chartered over a five-year period to Ji Sheng Marine, a wholly-owned subsidiary of Nanjing Tanker Corporation and indirectly controlled by Sinotrans Group. The charter agreement stipulates a payable aggregate amount of $127m of which $47m is for the hire at a daily rate of $25,800, and $80m payable by the charterer to acquire the tanker upon expiry of the charter agreement. [05/01/11]

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