Vessel Impairments Push FSL Trust Deeper into Loss
Singapore-based First Ship Lease Trust has reported a net loss of USD 33.9 million for the fourth quarter of 2017 and USD 73.9 million for the full year, the trust said.
The loss was mainly driven by ongoing market volatility and continued fall of vessel values, resulting in a non-cash impairment of USD 72.2 million on 12 vessels in 2017. A further USD 8.9 million impairment was recognized on a vessel sold post yearend.
The full-year loss more than doubled year-on-year, as FSL Trust booked USD 30.9 million of net loss for 2016.
“This has been a challenging year for the trust with ongoing market volatility continuing to take its toll on all areas of the shipping market. That said, the outlook for the second half of 2018 is beginning to show more encouraging signs, and we remain operationally well positioned for the future,” Roger Woods, Chief Executive Officer of FSLTM, said.
“We continued to pay down our debt through a series of scheduled payments, voluntary prepayments and from vessel disposals, the net proceeds of which have been applied in full to the outstanding loan. (…) Our priority remains to secure an acceptable refinancing solution for the long-term stability of the trust, discussions in this respect remain ongoing, and we remain optimistic for a successful outcome.”
During the fourth quarter of the year, FSL Trust Management, as trustee-manager of the trust, announced that it has been in negotiations to extend the amortizing loan facility secured in December 2011 that fell due for full repayment in December 2017.
As informed, the majority of the lenders under the syndicated loan facility have backed the extension. To this end, the trustee-manager made an application to the High Court of Singapore proposing the extension.
Commenting on the decision of Godan GMBH, the sole shareholder of FSL Holdings, the major unitholder of FSL Trust and sole indirect shareholder of the trustee-manager to launch talks with investors on a potential sale of all of its shares in FSL Holdings, the trustee-manager said the development was positive.
“FSLTM anticipates that with the support of a strategic investor with long-term objectives, the future of the trust’s financing and operational outlook would be greatly improved,” the trustee-manager said.
FSL Trust’s portfolio of 19 ships comprises three containerships, twelve product tankers, two chemical tankers and two crude oil tankers.