Sovcomflot selling fleet to meet debt obligations

Russia-based tanker owner Sovcomflot has put up for sale up to a third of its 121-strong fleet, reports Lloyd’s List. The downsizing is part of the company’s struggle to repay loans to western banks and financiers before UK and European Union governments’ wind-down orders take effect on May 15th.

Potential buyers from Dubai and China were reported to be in discussions with Sovcomflot.

Banks in the EU and UK were given a grace period until May 15th to extricate themselves from Russian contracts. Banks would therefore need to receive all outstanding loans before that date. Sovcomflot is therefore in need of cash and appeared to be looking for any cash-rich buyer not subject to international sanctions.

Eight ships had been confirmed as sold, with four of them known to have gone to Dubai-based Koban Shipping. Chinese buyers were reported to be taking on vessels and, said Lloyd’s List, several deals were understood to be nearing completion.

In April Sovcomflot issued a statement in relation to two outstanding Eurobond issues totalling $928m that had been scheduled to mature in 2023 and 2028. It made clear its intention to meet its financial obligations despite sanction restrictions curtailing its ability to make payments.