TTA orders three new vessels, making a total of five new vessels to be delivered over four years: A renewal and fleet expansion strategy as market demand rises
TTA has finalized a construction contract for three new Handymax bulk carriers, worth Baht 4.27 billion, the first of which will be delivered in 2009, followed by two more in 2011, five additional vessels to be added to a current fleet of 45 within 4 years.
M.L. Chandchutha Chandratat, Managing Director of Thoresen Thai Agencies Public Company Limited or TTA, said that Thoresen Shipping Singapore Pte. Ltd. ("TSS"), a wholly owned subsidiary of TTA, has signed construction contracts to build three new Handymax vessels ("the Vessels") with Vietnam Shipbuilding Industry Group ("Vinashin").
Pursuant to the contracts, TSS has engaged Vinashin in Vietnam to build, equip, and complete three identical 53,000 deadweight tons double-hulled Handymax bulk carriers.
The total delivered cost of three Vessels is US $123,796,344 (One Hundred Twenty Three Million Seven Hundred Ninety Six Thousand Three Hundred and Forty Four US dollars), which is equivalent to Baht 4,275,925,721.76 (Four Billion Two Hundred Seventy Five Million Nine Hundred Twenty Five Thousand Seven Hundred Twenty One and Seventy Six Satang), using a USD/THB exchange rate of 34.54). Payments will be made in five equal installments. The first 20 percent will be payable immediately; the second, third and fourth installments (or 20 percent in each installment) will be payable during the construction period, based on contract milestones; and the fifth installment of 20 percent will be payable upon delivery of the Vessels, which is expected to occur in October 2010, February 2011, and June 2011, respectively.
The delivery cost includes a number of upgrades to the basic vessel specifications. These upgrades increase the vessel's durability and enhance its trading capabilities and attractiveness to TTA's client base.
A majority of the delivery cost would be funded by US Dollar loans from TTA's syndicate banks. Operating cash flows will fund the remaining equity portion.
"TTA' s principal activities include vessel chartering and ownership. The vessels are Handymax in size. The acquisitions are part of TTA's fleet renewal and expansion strategy, which focuses on reducing our fleet average age and increasing the average size of our vessels to serve the growing needs of our client base. The new vessels will enhance TTA's market position in terms of modern bulk carrier vessels," M.L. Chandchutha said.TTA currently owns forty-five (45) general cargo and dry bulk carriers. Two new build vessels are expected to be delivered in December 2009 and September 2011. With this acquisition, TTA will have five new build vessels to be delivered between 2009 and 2011.