Re: Higher Price?

From: Jay
Remote Name:
Date: 12/05/02
Time: 11:57:22 AM


Here it is. Can anyone explain why Lake dimensions cost more? CANADIANS SET TO ORDER FIRST NEWBUILDINGS Dry bulk operator Canadian Forest Navigation (Canfornav) is considering ordering its first-ever newbuildings. Liz Shuker, Montreal Partner Knud Jensen says the company is considering ordering up to six Laker ships in the 30,000-dwt range over the next few years, starting with an order for two or three vessels between now and the start of the Great Lakes season in April. The Montreal-based company, which to date has used mainly chartered tonnage, has talked to two Japanese yards and reckons it could secure the ships for $16m to $17m, a drop from about $21m a year ago. The ships would be built to the traditional “narrow and long” Lakes design that is estimated to be 15% to 20% more expensive than a standard bulker of equivalent size. The company believes prices have hit rock bottom for this class of ship and is considering a joint-venture with another shipowner that would enable both parties to exploit the multi-ship deals offered by the yards. The two companies would split the order with Canfornav subsequently taking the partner’s tonnage on charter. The company indicates the partner would most likely be one of its long-term shipowning associates. It regularly charters tonnage from Victoria Steamship, Zodiac Maritime, the Onassis Group and Egon Oldendorff plus several smaller companies. “It makes sense to pool the ships,” said Jensen. Canfornav currently employs around 25 bulk carriers on a combination of medium and long-term charters. Around 60% are engaged in trades into and out of the Great Lakes, making the company the second largest operator in the region after Fednav. Jensen also reveals the company has recently spoken with finance experts in New York about the possibility of raising capital on the public markets. “We checked it out because we don’t want to miss out on something. Shipping people are generally curious about new opportunities,” he said. However, he comments that the company is more likely to take the private placement route in future in view of the time and energy needed to tap public sources. The proposed newbuildings, if firmed up, will most likely be funded using the company’s own cash, Jensen adds.

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