An agreement between Hong Kong-listed Cosco Shipping Lines and Singapore’s Pacific International Lines has sparked speculation in the shipping press that the Chinese conglomerate is making its first move towards a takeover.
Under the time charter agreement involving a total of 12 ships, Cosco Shipping will lease one 6,500 teu vessel and five 4,250 ships from PIL and charter six 5,500 teu vessels out to PIL.
PIL is chartering out the 6,500-teu Kota Cantik at a daily rate of US$7,266.60 to Cosco Shipping Lines from 5 September 2017 to 3 April 2018, and the five 4,250-teu ships (Kota Laju, Kota Layar, Kota Lambang, Kota Lumayan, Kota Latif) at a daily rate of US$4,675 over the same period.
The agreement has a maximum lifespan of 10 months, with a total value of the charter transactions is estimated at US$18.8m.
“The transaction may resolve the difficulties faced by Cosco Shipping Lines for lack of suitable internal shipping capacity and the ‘ship hiring difficulty’ for specific ship type in the external ship leasing market, and to satisfy the above specific requirement for shipping route capacity by Cosco Shipping Lines,” the Chinese carrier said.
Two months ago PIL was being touted as a possible liner consolidation victim with Cosco Shipping Lines seen as the most likely predator. In the event it was OOCL that stepped into the China Cosco embrace, at the cost of US6.3bn.