Concordia Maritime reduces its fleet to three tankers and sells its eight ships

Concordia Maritime, a former leader in product tankers, is selling off its fleet as management explores new business options. Despite going public 39 years ago, the company was hit hard by the downturn in tanker markets, resulting in its eighth tanker being sold in under 18 months.

The latest announcement states that the product tanker Stena Penguin has been sold to an unnamed European buyer. Built in 2010 and weighing 65,200 dwt, the tanker reflects Concordia’s focus on midrange tankers. Stena Penguin had previously been chartered to Concordia’s parent company Stena Bulk for five years including profit-sharing, since a financial bailout in 2021. Stena Bulk then chartered the ship with a combination of short- and medium-term contracts, including a 12-month time charter agreement with Exxon before it was recently returned.

“We are now selling another ship with a good margin,” said Erik Lewenhaupt, CEO of Concordia Maritime. He added that the sale comes primarily in the context of the current record-high used tonnage market.

The sales process started in early 2022 with the first two ships sold in Q1 and a third in Q2 to avoid docking costs and strengthen the financial position. The sales added to liquidity, and under the terms of Concordia’s agreements with the lenders, the surplus was used to accelerate the debt payoff.

The initial sales had a less positive effect on finances but turned into an opportunity to extract value from the fleet as the market turned in 2022. The recent sale is expected to have a positive cash impact of approximately $21 million after the remaining bank debt has been repaid.

The company sold a total of seven ships in 2022 and continues selling with three more ships expected to be delivered in late 2022 and early 2023.

Following the sale of Stena Penguin, Concordia Maritime’s fleet will consist of three product tankers, Stena Progress, Stena Premium, and Stena Polaris, which are operated on medium to longer-term charters. The company’s traditional approach to the market means it saw little improvement in earnings as the market strengthened.

The remaining vessels include Stena Progress and Stena Premium, currently engaged on medium-term contracts, and Stena Polaris, which has been chartered to US Crowley Government Services since early 2022.

Looking forward, Lewenhaupt reports that planning for new business options continues as the company works on identifying attractive opportunities.

Source: News Network

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