China Merchants Reveals Intention to Buy Ten New VLCCs

China Merchants Energy Shipping has revealed the intention to increase its competitiveness by purchasing 10 new VLCCs.

Even though the oil tanker market is currently slow, Li Jian Hong, Chairman of China Merchants, is confident that this is the right moment for deriving a benefit from present low newbuilding prices and expanding the fleet capacity. The price tag for one new VLCC is significantly 37% lower if we compare it to the peak price recorded in September 2008.

China Merchants is going to raise RMB 2.89 bln from the issuing of not more than 858m number of shares to designated investors at RMB 3.37 per share while the remaining amount will be borrowed from a number of banks.

In case the company obtains the funds early this year, delivery of the first six VLCCs will be taken in 2013 and of another four in 2014.

(2 890 000 000 Chinese yuan = 458.69502 million U.S. dollars)