Corrected: Vale, Pan Ocean Agree on USD 1.3 Bn Cut on COA Deal

Brazilian miner giant Vale has requested for its long term voyage deals with Singapore-listed shipowner Pan Ocean to be revised down, trimming USD 1.3 billion from USD 5.8 billion* sales amount due to bunker fuel oil price.

Pan Ocean said that the contracts in question date back to September 2009 and involve transportation of 238.4 million tons of iron ore from Brazil to China for a duration of 19 years. As disclosed, the said changes would not impact the company.

“The existing terms and conditions regarding freight, cargo quantity, and the other contractual terms remain the same with no material impact to the company’s revenue,” Pan Ocean added.

Revised contracts of affreightment were scheduled for issuance on December 31, 2018.

The company said earlier it was bullish about the market prospects in 2019 as the demand growth is expected to outweigh fleet expansion.

Pan Ocean has 17 ships on order, plus one option. These include 5 open hatch bulkers, six VLOCs, two loggers, two Ultramaxes + one option, and two 1,800 TEU containerships.

*This article has been amended since its initial publishing as Pan Ocean subsequently corrected the original sales figures that were “inadvertently wrongly stated” in the regulatory filing issued on January 2.

The changes made refer to figures disclosed in the original filing, where USD 53 billion has been replaced with USD 5.3 billion.