Dry bulk transportation company Knightsbridge Shipping Limited has entered into a charter agreement with RWE Supply & Trading GmbH, a wholly owned subsidiary of European energy company RWE AG, for 15 Capesize vessels.
Under the contract, all 15 vessels have been chartered out on approximately five years.
The vessels will be delivered over the coming five quarters starting first quarter of 2015.
Knightsbridge said that the transaction is done on a “to be nominated” (“tbn”) basis where the company will deliver vessels on a fairly evenly spread basis through until the first quarter of 2016.
“The basis of the transaction is to employ the vessels on index linked contracts. The earning of each vessel is decided through a pre-agreed premium on top of the prevailing spot market (Baltic Cape Index 4 T/C), reflecting the better performance of the new generation Capesize vessels,” the company added.
KSL has an option to convert the floating rate into a fixed rate at any time and for any duration at a price to be agreed reflecting the market at the time.
The company believes the transaction will give the benefits of full time employment for the vessels, the opportunity for earnings to correlate with the market and the possibility to convert the floating contracts into fixed rate ones at a later stage.