CSCL Wants to Charter Up to 11 21,000-TEU Giants

  • Business & Finance

China Shipping Container Lines Company Limited (CSCL) revealed its plan to bareboat charter up to eleven 21,000 TEU containerships via its wholly-owned subsidiary as it pushes to boost its competitiveness and lower its carbon footprint.

Six mega boxships will be rented out on a firm charter, with options for five more units, as disclosed in a Shanghai stock exchange filing.

Details on the owner of the six containerships and/or potential builder of the additional five ships have not been revealed.

CSCL reported a decrease in net profit by 250.31% during the third quarter of 2015 as compared with
the corresponding period of last year. The net loss reached CNZY 1.05bn against a profit of CNY 203,2bn in the corresponding period last year. The company said that the plunge was mainly due to the decrease in operating profit of the company during the reporting period coupled with depressed market condition.

The decline in earnings builds upon a reported 97.5 % fall in earnings in the first half of the year.

In relation to the suspension of company’s shares from Hong Kong and Shanghai stock exchanges since August 9, CSCL said that the trading will continue to be suspended as certain material matters are still being contemplated by the controlling shareholder of the company, the China Shipping Group.

The said contemplation is believed to be connected to a reported merger between China Shipping and COSCO.

As advised by China Shipping, the relevant matters are still under robust contemplation at this stage. However, due to the complicated nature of such matters, which may involve asset reorganisation, they are currently still in the process of further research and analysis, including discussion with each intermediary about the details of the transaction and communication with regulatory authorities in respect of the relevant matters, among others,” CSCL said. It is expected that the trading suspension will not last more than one month since 16 October 2015.

The merger of two container shipping majors- China Cosco and CSCL- is believed to stem from China’s efforts to consolidate state owned enterprises; a move which is likely to cause a domino effect on existing carrier alliances and further carrier mergers in Asia, damaging industry competition, according to consultancy firm Drewry.

World Maritime News Staff

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