FSL to Finance Newbuildings by Selling Ageing Ships

Singapore-based FSL Trust Management has unveiled its plan to sell ageing vessels in order to collect funds for the construction of two new tankers.

The decision comes on the back of a Letter of Intent signed for the construction of two scrubber-fitted tankers, which has now been realized into a firm shipbuilding contract with China’s Cosco Shipping Heavy Industry.

FSL is paying USD 97.6 million for the Tier III 114,000 dwt tanker duo, which will be owned by FSLT subsidiaries, FSL-28, Inc. and FSL-29, Inc. The new units would be delivered in November 2020 and January 2021, respectively.

The newbuilding acquisition will be funded with up to USD 21.3 million to be collected through the sale of older vessels. The company said that no definitive documentation has been entered into in relation to the sale of vessels as of yet.

Additionally, another USD 31 million of net proceeds from the company’s pro rata, non-renounceable and non-underwritten preferential offering, revealed in late November, would be used to fund the newbuildings.

FSL informed that the remaining balance would be funded by way of a combination of surplus cash flows from operations and bank financing to be obtained by the company.