Mercator expands fleet size with a post panamax
Wednesday, January 26 2011 - 02:37 AM WIB
The vessel has been acquired by Chitra Prem Pte. Limited which is a wholly owned subsidiary of Mercator, the company said.
The vessel built in 2010 by New Yangzi Shipbuilding Co. Ltd, China, has a capacity of about 93,200 DWT and was acquired at a total consideration price of approximately US$45.5 million, funded through a mix of internal accruals and borrowed funds, it said
The vessel has been fixed on a long term time charter contract with a reputed customer at a daily hire of $21,400 per day for 71-74 months. This contract would bring in revenues of about $47 million over the next six years.
The time charter contract is in line with the company?s strategy of locking substantial part of its capacity on long term period business. This strategy helps ensures revenue stability and maintains cash flow visibility.
With this acquisition, Mercator would operate a fleet of 17 dry bulk vessels, fourteen owned and three chartered in comprising geared and gearless Panamaxes, Post Panamaxes and a Very Large Ore Carrier (VLOC) with an aggregate capacity of around 1.5 million DWT. The acquisition of this vessel brings in diversity to the revenue stream and de-risks the operating risk associated with operation of vessels.
Said Shalabh Mittal, Managing Director and Chief Executive Officer of Mercator, ?With the purchase of this vessel, we have expanded by three vessels in 2010-11 with a Capital expenditure of USD 105.5 million effectively using our strong cash accruals. We are happy that our acquisition has come at a time when the asset prices are attractive. Given the long term deployment for the new vessel in the fleet we would recover a major portion of our investment during the six year charter.? concluded Mittal.
Mercator, which commenced operations in 2005, has established a market presence in the Indian coal transport market, specializing in the transportation of dry bulk commodities such as coal into India from Australia and Indonesia, and iron ore from India to countries such as China. Mercator?s positioning in the Indian markets helps maximize the capacity usage efficiencies by using its ships on the triangular route of Indonesia ? India ? China ? Indonesia. With exposure to the infrastructure sectors like Steel and Power of India and China, Mercator is well positioned to benefit from the strong growth of these countries. (denny)