Pacific International Lines (PIL) ordered four 8,000 teu container ships from Yangzijiang Shipbuilding today, as the Singapore-based regional carrier continues to improve its financial health.
In March, PIL ordered newbuildings for the first time in seven years, when the company contracted four 14,000 teu ships at Jiangnan Shipyard. Prior to that, PIL’s last newbuilding commission was orders for eight 12,000 teu ships from Yangzijiang in 2015; those ships were built in 2018.
PIL said that the 8,000 teu ships, to be delivered in 2025, will be dual fuelled, LNG and diesel, and will each be equipped with an ammonia intermediate ready fuel tank. The newbuilding price was undisclosed but similar ships commissioned recently have been priced at about $135m each.
Lars Kastrup, who became PIL’s sole CEO after Gan Chee Yen stepped down as co-CEO on 1 July, said: “We have decided to place an order for an additional four 8,000 teu LNG dual-fuel vessels for two key reasons. Firstly, this is part of our ongoing efforts to optimise and renew our assets for greater operational efficiency. The new vessels will complement our existing fleet and support us in the enhancement of our connectivity to better meet the needs of our customers worldwide.”
Mr Kastrup, who previously served as CEO at Neptune Orient /APL, continued: “Secondly, we have identified LNG as a commercially viable transition fuel solution and the new vessels, which will once again be LNG dual-fuel and ammonia ready, will contribute towards achieving our decarbonisation goal of attaining net zero carbon emission by 2050.”
In March last year, PIL, which suffered consecutive net losses from 2018 to 2020, was given a lifeline when Heliconia Capital, a unit of the Singapore government’s investment company, Temasek Holdings, acquired a 75% stake, involving a $600m investment, including loans.
PIL’s restructuring also involved converting $45m of bonds into perpetual securities, while cash payments to the bond holders were to be accrued for five years before being released. However, by the end of last year, PIL had seen its finances turn around and made early repayment of sums owing to the bond holders.
There has been growing interest in newbuildings in the 7,000-8,000teu range, with more than 90 such vessels on order so far. Liner operators are looking to deploy such tonnage to the Far East-Persian Gulf route, replacing the 4,000-5,000 teu incumbents.
In 2020, when container shipping rebounded on the back of Covid-19-related logistical bottlenecks, PIL narrowed its net loss to $44.73m that year, compared with the net loss of $850.08m in 2019.
