Concordia Maritime Down to Last Ship as it Sells 10 Tankers in 18 Months
Concordia Maritime has entered into a sale agreement for two more of its product tankers, essentially completing the sale of its entire fleet in the past 18 months as it sought to work down debt. The company has one remaining product tanker which is on long-term charter after having sold 10 vessels.
The sale process started at the beginning of 2022 to lower debt and reduce pending costs. Since then, the company has pivoted to take advantage of the strong market and the high prices for older vessels. The sale of the latest two vessels, after the repayment of loans and liabilities to related parties, is expected to generate more than $9 million in liquidity for Concordia. The company did not provide the sale price but said it was affected by the buyer’s expected earnings for the vessels which remain under contract till late 2024.
Concordia’s strategy had been to place the vessels on medium to long-term charter agreements. They built up large debts with the building of the ships and were hard hit by the prolonged weak market. When the market rebounded in 2022, the charters reduced the benefits but increasingly made the sale of the vessels attractive.
The latest agreement is for the sale of two 65,200 dwt product tankers, the Stena Progress built in 2009, and the Stena Premium built in 2011. The company notes that since 2021, Stena Progress and Stena Premium have been on a five-year charter to Stena Bulk, which in turn has chartered out the vessels on a combination of short and medium-term contracts. The existing contracts, which run until the fall and winter of 2024, will be transferred from Stena Bulk with the delivery of the vessels to their new owners.
“We are working intensively to chart the company’s future direction and business,” said Erik Lewenhaupt, Concordia Maritime CEO. The company had previously said it was exploring alternatives for its future business after the fleet sale. “The work is progressing and we have high hopes of being able to present more information during H2 2023,” said Lewenhaupt.
After the sale, the Concordia Maritime fleet will consist of one vessel, Stena Polaris, which has been chartered out on a bareboat contract to US Crowley Government Services since early 2022. Crowley has in turn chartered the vessel to US Military Sealift Command. The contract with Crowley includes extension options until the end of 2026.
Concordia had explored a range of options including in 2022 exploring the possibility of converting some of its product tankers to operate as containerships. When that was demanded not economically feasible, the company proceeded to sell a total of seven ships in 2022. They sold one additional tanker in May 2023.
Backed by Stena, the company at one point operated some of the largest tankers in the world. The last two 1970s-built Concordia Class VLCCs were sold in 2004 with the company focusing on its PMAS product tankers. Their last newbuilds were delivered in 2015, but the efforts to refinance started just a year later.