Norwegian bulk shipping company 2020 Bulkers has reduced its bulk carrier fleet by half through a fixed-price bulk vessel sale. It expects to gain $89 million in proceeds from the transaction.
The Oslo-listed bulk shipping company stated it has reached an agreement to sell three vessels for $209 million: the 208,000 dwt “Bulk Sandefjord”, “Bulk Santiago” (both built in 2019), and the “Bulk Shenzhen”.
The buyer is understood to be an “unaffiliated third party”, with the specific identity not disclosed.
The average price per vessel in this transaction is nearly $70 million, while the valuation agency VesselsValue assessed the total value of these three vessels at only $191 million.
2020 Bulkers will continue to benefit from the operating cash flow of these vessels until their delivery in the first quarter of next year.
The shipowner expects to achieve a net book gain of $89 million from this transaction, but the allocation plan for the transaction proceeds has not been finalized yet. After the transaction is completed, the company will have 3 remaining vessels, all built in 2020.
Lars Christian Svensen, CEO of 2020 Bulkers, stated that the company remains optimistic about the Newcastlemax bulk carrier spot market. The decision to sell half of the fleet was made because they received an offer that was “too good to refuse”.
“The transaction price is 10% higher than broker valuations, making it a good deal for our shareholders,” Lars Christian Svensen noted.
He also said the company currently has no plans to sell the final three vessels.
This bulk sale marks a shift in the company’s attitude towards vessel sales since the middle of this year.
In June this year, a potential buyer approached the company with a firm offer for one vessel, but it was rejected.
The company’s confidence in the market is largely based on the following three points: low newbuilding orders for bulk carriers, scarce newbuilding berth slots for bulk carriers before 2028, and the additional freight volume expected from the large Simandou iron ore project in Guinea.
