Sales Not The Answer

The problems facing owner TMT are not confined to Antwerp and the “C Ladybug” – elsewhere courts are dealing with the aftermath of the financial meltdown and vessels are being put up for auction.

However, with the shipping markets in turmoil and vessel values recessed, it seems that even forcing sales is proving difficult. As a case in point, the maritime court in the Chinese city of Ningbo has failed to achieve a judicial sale of TMT’s “F Elephant”, a 1989-built very large ore carrier , after no bids reached the reserve price during the auction.

None of the four bidders were even ready to put up the ship’s scrap value.

According to analysts the company’s problems stem from the fact that many TMT vessels were ordered at a time when the newbuilding prices were very high, and now in a hardening market with low freight rates, TMT simply cannot afford the repayments. Some banks have been pushing for TMT ships to be sold to pay off loans, but other banks are more canny in maritime matters and have been warning against forced sales in the current depressed circumstances as they (as the F Elephant has proven) are unlikely to generate the funds necessary.