Castor Maritime enters the tanker market

Cyprus-based bulker owner Castor Maritime Inc. has entered into agreements to purchase two 2005 Korean-built Aframax LR2 tankers from an unaffiliated third-party seller for $27.2 million.

Illustration, Image credit Kees Torn/Flickr

Both vessels have attached time charter contracts with an unidentified charterer with an estimated remaining term of about one year.

Each vessel will provide the company with a minimum gross daily hire of $15,000 and have a 50% profit sharing arrangement over such level based on a predetermined formula.

The charterer has the option to extend the duration of each contract for an additional one-year term.

In addition, the vessels have very recently completed their scheduled special surveys and dry-dockings and are equipped with ballast water treatment systems.

The acquisition is expected to be consummated by taking delivery of the vessels within the first quarter of this year and is subject to the satisfaction of certain customary closing conditions.

“As we have communicated previously, we are a company that aims to take advantage of attractive opportunities presented to us, as the shipping cycles evolve. Therefore, we are very excited to be entering the tanker market, at what we believe is an opportune time for this sector. While the tanker market may face continued headwinds in the short to medium term, the attached time charter contracts provide us with cash flow security while the profit sharing arrangement allows us to benefit further should a rate recovery materialize within their duration,” Petros Panagiotidis, Chief Executive Officer of Castor, said.

Panagiotidis added the company was likely to diversify and grow its fleet further as it has significant capital on hand.