FSL Trust Management Pte, the trusteemanager of First Ship Lease Trust, has sold two containerships for USD 10.8 million as it failed to find further employment for the boxships in an already oversupplied market.
Ever Radiant and Ever Respect are Japanese-built, 4,229 TEU containerships built in 1994 and 1995 respectively.
The two vessels have been on bareboat charter to Taiwanese Evergreen Marine Corporate Ltd, with the lease finishing at the end of this month.
“Despite the trust’s best efforts, given the current container market environment, further employment for the vessels could not be found and the decision to dispose of them was taken swiftly to protect unitholder value. The proceeds will be primarily used to reduce the trust’s outstanding debt and scheduled debt repayments going forward,” says Alan Hatton, Chief Executive Officer of FSLTM.
Just over USD 8 million of the proceeds from the disposal of the vessels will be applied to the outstanding loan facility, subsequently reducing the trust’s quarterly loan repayment by approximately USD 320,000 from the first quarter of this year.
The trust said that the sale will incur a loss on disposal of USD 4.2m across the two vessels in 1Q2016, following a writedown in 4Q2015 of approximately USD 1 m.
FSL Trust’s fleet now stands at 22 vessels comprising five containerships, 12 product tankers, three chemical tankers and two crude oil tankers.