APL is selling panamaxers to Diana, that re-charters them back to APL

By Curious

SINGAPORE’s APL, the container shipping arm of Neptune Orient Lines, sold its 3rd panamax containership this year, the 4,729-TEU container vessel APL Garnet, which was delivered in 1995 to Diana Containerships for US $30 million with a thirty-four-month charter back to the shipping company APL for $27,000 per day.
The 2 sister vessels, the APL Sardonyx and APL Spinel, had sold back in January to the company Diana Containerships for US $30 million each, but with a lower charter rate of $24,750 per day for 24 months.
“The transaction is really interesting because of some reasons, as the acquisition price of US $30 million is quite above the current market value for such vessels, that is estimated at among US $15 million to US $20 million,”.
“The high price is reflecting the high charter rate that the shipping company APL has agreed to pay. Current rates stand at among US $9,000 - US $10,000/day for 6 to 12 months charters with longer periods of 2 years roughly valued 40-50 % above this rate, although there isn't market activity currently for such periods to ascertain it.”
The high sale price is going to enable APL to evade taking a loss against book value, although this is going to be offset by the higher charter rate it must pay to Diana. It said these moves are afoot because the Singaporean shipping line is shifting towards deploying larger ships. Its newbuilding programme is including 12, 9,200-TEU vessels, ten 10,070- to 10,700-TEU ships, and ten 13,800-TEU boxvessels.