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OOCL orders five 23,000-teu boxships at Cosco yards for $778m

Orient Overseas Container Line (OOCL) has ordered five 23,000-teu containerships at a total price of $778.4m from two Cosco shipyards in China.

Three of the newbuildings will be built at Nantong Cosco KHI Ship Engineering and the remaining two at Dalian Cosco KHI Ship Engineering, according to an announcement by Orient Overseas (International) Limited (OOIL), parent of OOCL.

“The size of the vessels together with the current vessels of smaller size would complete the fleet size of the group and would bring economy of scale to the group. The deployment of vessels will be able to strengthen the market position of the group and enhance the cost competitiveness of the group,” OOIL said in a statement to the Hong Kong Stock Exchange.

The newbuildings are scheduled to be delivered between the first quarter of 2023 and the early fourth quarter of 2023.

OOIL expects bank financing to cover about 60% of the contract price of each vessel, with the balance to be funded from internal resources.

“Should such bank finance not be arranged, the full contract price of each vessel would come from internal resources of the group,” OOIL said.

Both the shipbuildings Nantong and Dalian are indirect subsidiaries of Cosco Shipping Group, which in turn is the controlling shareholder of OOIL, making the latest deal a connected transaction.

“The shipbuilding contracts have been entered into for the purpose of improving the quality of service which the group provides to its customers. It is the view of the directors that ownership of the vessels will improve both the operation efficiency and profitability of the group,” OOIL stated.

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