- Sovcomflot is selling ships to buyers in Asia and the Middle East to repay loans to western banks.
- Per the WSJ, the deals come ahead of a Sunday deadline for EU companies to stop business with Russia.
- As Russia’s largest shipping company, it operates 122 ships, including oil tankers and gas carriers.
- For more stories, go to www.BusinessInsider.co.za.
Russia’s leading shipping company has sold ships to buyers in Asia and the Middle East to repay its loans to Western banks.
Sovcomflot sold five tankers to Dubai-based Koban Shipping and four natural-gas carriers to Singapore-based Eastern Pacific Shipping, per the report.
The move comes as the company tries to comply with sanctions imposed by the European Union, which has set a Sunday deadline for companies to cease business with Russia.
The deadline means banks will need to receive all outstanding loans before that date. Sovcomflot’s exposure, per the latest data, was as high as $ 2.1 billion (R34 billion) of debt, according to Lloyd’s List.
However, the journal also reported that Chinese buyers are also reportedly known to be interested in acquiring vessels and are in negotiations.
Sovcomflot did not immediately respond to Insider’s request for comment made outside normal working hours.
On April 25, the company announced in a release that it was committed to repaying its Eurobond. The company included its two outstanding Eurobond issues, totaling $ 928 million (R15 billion), with maturities in 2023 and 2028.
Eastern Pacific, which bought natural-gas carriers, paid $ 700 million (R11.3 billion) to a bank that took ownership of the ships, per the WSJ.
Maritime intelligence journal Lloyd’s List earlier reported the company was looking to sell as much as a third of its fleet.
A senior banker thought to be involved in the negotiations with Sovcomflot told the journal: “Basically, all banks and charterers have until May 15 to actually terminate the contracts, which means Sovcomflot has a very short window to pay back the loans, and realistically there is the only way it can do that and that is to sell the ships. “
Per the journal, a senior industry official with direct knowledge of the deals said that 40 of the Sovcomflot’s entire fleet are being discussed with buyers from Dubai and China.
A senior banker told Lloyd’s List: “Paying back loans before the deadline is clearly the immediate trigger behind the fleet sale, and it seems clear that Sovcomflot is preparing for an eventual future return to the market.”
They added: “But there is also likely a calculation here as to how many ships it is going to need to trade within the sanctions regime for the foreseeable future.”
Get the best of our site emailed to you every weekday.
Go to the Business Insider front page for more stories.
Original Article reposted fromSource link
Disclaimer: The website autopost contents from credible news sources and we are not the original creators. If we Have added some content that belongs to you or your organization by mistake, We are sorry for that. We apologize for that and assure you that this won’t be repeated in future. If you are the rightful owner of the content used in our Website, please mail us with your Name, Organization Name, Contact Details, Copyright infringing URL and Copyright Proof (URL or Legal Document) aT spacksdigital @ gmail.com
I assure you that, I will remove the infringing content Within 48 Hours.