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Seanergy Maritime Holdings to install scrubbers in 50% of fleet

02 Nov 2018

New York-listed dry bulk transportation services provider and shipowner Seanergy Maritime Holdings Corp. has entered into commercial agreements for the installation of exhaust gas cleaning systems (scrubbers) on five of its capesize bulk carriers before January 1, 2020.

It has secured the scrubber equipment from Hyundai Materials and has reserved retrofitting slots for the M/V Partnership, M/V Lordship, M/V Premiership, M/V Squireship, and M/V Championship at an experienced dry-dock facility in China.

The total investment, to be covered by the charterers, is expected to exceed $12.5 million, including equipment and installation costs.

On top of the daily hire, the company will receive an additional compensation based on the spread between the price of high sulphur fuel oil and the price of marine gas oil or other IMO-compliant and ISO certified low sulphur fuel oil throughout the term of the time charters.

Upon completion of the installations scheduled for Q2 and Q3 2019, the vessels will commence index linked period employment with three dry-bulk charterers ranging in durations between three and five years.

“We are very excited to announce these commercial agreements which should result in approximately $12.5 million accretion in our NAV,” states Stamatis Tsantanis, the company’s Chairman and Chief Executive Officer.

“We believe that the significant investment that will be implemented in full cooperation with our charterers represents a balanced and comprehensive approach towards the new environmental regulations scheduled to become effective as of January 1, 2020.

“Such strategic direction comes after careful consideration of the various aspects of the new regulations and their implications in our sector, given that Seanergy was one of the first Greek dry-bulk companies to conclude a feasibility study on scrubbers, in cooperation with the American Bureau of Shipping (ABS). 

“This significant investment by our charterers, in combination with innovative charter agreements, is expected to increase the market value of the subject vessels without our company incurring additional debt or diluting our shareholders.

“It is important to further note that the underlying time-charters are index linked, maximizing Seanergy’s exposure to the positive fundamentals and outlook of the Capesize market. Moreover, through profit sharing agreements calculated on the spread between high and low sulphur fuel, we believe we will be able to capitalize on short-term distortions in the bunker market.

“We aim to complete the installations of the scrubbers during 2019 before the IMO 2020 regulations come into force. Finally, upon implementation of the new IMO regulations, all of Seanergy’s fleet will be fully compliant with the new rules.”

Published: 2 November, 2018

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