Fleet Financing

Nordic Shipholding plans to shut down tanker activity due to market issues


Nordic Shipholding plans to sell its last three tankers (Nordic Shipholding)

Posted on August 23, 2021 at 4:58 PM by

The maritime executive

As a sign of the seriousness of the problems in the oil tanker market, the Danish shipping company Nordic Shipholding has announced that its management and lenders have agreed to offer the company’s last three tankers for sale. The plan is to shut down the business of the business.

The group cited poor performance as time charter equivalent (“TCE”) rates were depressed due to low tonnage demand caused by the COVID-19 pandemic coupled with excessive tonnage in the market. As a result, the average daily rate of TCE earned by the company in the first quarter of 2021 by the five vessels was 61% lower than the average daily rate of TCE earned in the first quarter of 2020. Nordic reported a loss of 1.5 million of dollars in the first quarter, including a small impairment charge.

As of the fourth quarter of 2018, management said they are continuously working with various initiatives to secure long-term funding for the group and develop a plan for the future. With its majority shareholder, discussions on the merger began in late 2019. However, these discussions on the merger have stalled due to “the diminished financial and economic visibility which has evolved and continues to evolve since the COVID pandemic- 19 ”.

Faced with a deteriorated financial situation, the company had sold individual assets while starting new discussions with its main investor. At the end of 2020, the company reached an agreement with its lenders for an extension of its credit facility for an additional year until December 30, 2021.

Merger talks resumed with a potential new partner in early 2021. The company warned that if the merger plan does not materialize in the first half of 2021, the company could face questions about its ability to continue its business. operation. Management expected the lenders to fund the company beyond December 30, 2021, but in the absence of a definitive merger deal, they would be forced to sell their three remaining tankers.

According to today’s announcement, the board has once again determined that merger talks have stalled. “In accordance with the group’s agreement with the lenders, management has put in place a process to sell the group’s three remaining vessels in an orderly fashion. In view of the volatility of the market for the sale and purchase of these vessels, it is likely that the group will notice a further depreciation of the book value of the vessels in the order of 4 to 5 million dollars.

The company whose origins date back to the 1980s has indicated that it does not see a way forward based on current market conditions. As such, the Board has also initiated discussions with the various stakeholders of the group to ensure the successful completion of the activity.

Nordic Shipholding until recently had five product tankers, four conveniently sized tankers and one LR1. Handysize tankers were employed in the Hafnia Handy Pool and the LR1 unit in the Hafnia LR1 Pool (formerly Straits Pool), both operated by Hafnia, Copenhagen. Their remaining fleet today consists of two handysize tankers and the LR1 tanker, each built in 2009.


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