West Asia Maritime Strikes Bareboat Charter Deal

Maritime Activity Reports, Inc.

February 14, 2006

According to reports, Chennai-based shipping company, West Asia Maritime Ltd. (WAM), has signed a memorandum of understanding (MoU) for taking a bulk carrier from Mitsui & Co. of Japan under bareboat charter for $33.527 million. Under the bareboat charter, a vessel charterer has complete possession and control of the ship, including the right to its crew. IHIMU of Japan will build the 56,120 dead weight tonnage (dwt) bulk carrier vessel. The new vessel, which is to be delivered in the first quarter of 2008, has been chartered for more than 12 years and six months and will be trading worldwide for the movement of dry bulk cargoes. Addressing a press conference here on Monday, Abdul Qadir, Managing Director, WAM, said this was the first time that an Indian shipping company had taken this route to control with an option to acquire ships. Under the proposed deal, WAM would be able to use the vessel for a long period with minimal investment and also have a purchase option. WAM could buy the asset at any time during the charter period at a pre-determined price.

WAM planned to augment its present fleet of 25 vessels within the next three years. The ships would be added through outright purchase and through bareboat charter/time charter operation. Company officials said besides owning three handymax dry bulk carriers, the company also acquired 73,879 dwt Panamax bulk carrier and converted the same as a self-unloader. The 2001 built Panamax self-unloader was a on ten-year time charter with Tamil Nadu Electricity/ Poompuhar Shipping Corporation Limited and operated on the East Coast of India for movement of coal. The major part of WAM's income came from the vessels it owned and operated. Source: The Hindu

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