Ningbo Ocean Shipping of China has announced that it is preparing for a major expansion of its fleet. The company has introduced a plan to lease eight new ships with a total value of approximately $1.5 billion (RMB10.3bn).
Details of the Leasing Plan
The proposed plan includes four container ships with a capacity of 7000 TEU, two ships with a capacity of 14000 TEU, and two car and truck carriers (CEU) with a capacity of 7000. The lease duration for these ships will reach 20 years. The larger ships represent a significant step for Ningbo Ocean towards operations beyond regional and feeder container services, while the two car carriers strengthen the company's efforts to enter the automotive transport market.
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Financial Commitments and Next Steps
Ningbo Ocean's maximum leasing commitments are as follows: RMB3.9bn ($581 million) for four 7000 TEU ships, RMB4bn ($596 million) for two larger ships, and RMB2.4bn ($357 million) for two car carriers. These figures represent maximum payments over the lease terms, including potential purchase payments at the end of the contracts, and not the shipbuilding contract prices.
Ningbo Ocean has not yet identified financing partners, shipyards, or delivery dates for the ships. The board approved the proposal last week, but it still requires shareholder approval and final contracts.
Ningbo Ocean entered the car carrier market last August, leasing a 7000 CEU ship for operations between China and Europe. The company is also expanding its order list for container ships at Chinese shipyards, including Wuchang and Huangpu Wenchong.
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