CHANG AN KOU – Ship Tracker & Vessel Information

Seller → buyer: Norwegian Car Carriers ASA (NOCC) → Cosco Shipping Specialised Carriers Co Ltd

Reported price: USD 32.500 million

Note: Cosco Shipping (Coscol) has paid a premium price to bring two Norwegian-owned car carriers into the lucrative Chinese domestic market. The board of the Chinese state-owned company has approved the purchase of two veteran Uljanik-built PCTCs from Norwegian Car Carriers (NOCC), the 4,287-car-equivalent-unit (ceu) NOCC Puebla (built 1999) and sistership NOCC Pamplona (built 2000). Coscol is so keen that it has been willing to pay a steep import tax to flag the ships into the Chinese domestic trades. Including Chinese import and sales taxes, Coscol is paying around CNY 217.14m ($32.5m) for the pair — CNY 110.27m for Pamplona and CNY 106.88m for Puebla, which will be delivered to the company soon. The taxes account for about 25% of the ships’ gross price. Coscol expects to operate the vessels for at least 10 years and calculates the internal rate of return on the investment at about 11%. The company recently introduced its 5,380-ceu, 13,418-dwt Yu Heng Xian Feng (built 1998) into the domestic trade to make the most of the same demand trend. “In order to take advantage of the favourable opportunity for rapid expansion in sea transport volumes brought about by the explosive growth in the domestic automobile sales market, and to promote the healthy development of the company’s car carrier transport business, the board has agreed to Coscol’s purchase of two secondhand ships for introduction into the domestic coastal car trade,” Coscol announced to investors this week. The move to bring secondhand car-carrier tonnage into the Chinese cabotage fleet mimics a trend two years back by domestic containership owners and more recently by domestic bulker owners. Coscol is the China Cosco group’s division for specialised vessels including heavylift ships, multipurpose ships in the project and breakbulk trades, car carriers and asphalt tankers. It has been spared much of the operational restructuring of its larger sister companies in the state-ordered merger of the former Cosco and China Shipping groups. NOCC managing director Olav Sollie confirms the sale and says the two ships are on the fringes of company strategy. They are in the midsize segment, where there is overcapacity, and the company wants to target instead the 6,500-ceu or larger market, where ships are more flexible. After the sale, NOCC will have a fleet of five car carriers on the water, plus two 6,600-ceu newbuildings at Hyundai Samho for delivery in the last quarter of this year and the first quarter of 2017. The disposals mean NOCC is below the desired critical mass as a tonnage provider and it will be looking at additional projects. After a 2014 buyout of the formerly listed company, NOCC is controlled by Tom Erik Klaveness’ Klaveness Marine and JP Morgan.