OOIL seals $3.08bn fourteen boxship order with Nantong and Dalian

Hong Kong Stock Exchange-listed Orient Overseas (International) Limited reported that its fourteen indirect wholly-owned subsidiaries sealed shipbuilding agreements on April 29 with shipbuilders Nantong and Dalian for the construction of fourteen vessels for an aggregate consideration of US$3.08bn (approximately HK$24,024m).

Fourteen units of 18,500 TEU class methanol dual fuel container vessels will be constructed under the terms of the agreements. Five of the fourteen units will be constructed by Nantong and nine will be constructed by Dalian according to the respective shipbuilding contracts, all dated on April 29.

The Group, which is principally engaged in the provision of container transport and logistics services, said that each vessel will be built for a consideration of US$220m (around HK$1,716m).

The vessels are expected to be delivered between the third quarter of 2028 and the third quarter of 2029, subject to the arrangements of delay in delivery as provided in each of the shipbuilding contracts.

As it is reported, the vessels will be equipped with green fuel technologies such as methanol dual fuel engines. They will also be “versatile and suitable for a wide range of trade routes and terminals.”

The construction of the vessels will allow the group to optimise its fleet structure, Orient Overseas (International) Limited said in its release, adding that the vessels can serve as replacements of the aged units of the group over time.

“The shipbuilding transaction aligns with the Group’s long-term strategy to steadily increase fleet capacity, achieve balanced growth in the long run, continuously promote the global development of its container shipping business and further consolidate its position in the industry,” the company noted.

The shipbuilders have previously been engaged by the Group to build twenty-nine container vessels (excluding the vessels ordered now), including seven 24,000 TEU class methanol dual fuel container vessels ordered in 2022, since 2020.

According to Orient Overseas (International) Limited, the shipbuilder Nantong is an associate of COSCO SHIPPING, which indirectly holds 50% equity interest in Nantong. On the other hand, Dalian is an indirect subsidiary of COSCO SHIPPING. COSCO SHIPPING (through its wholly-owned subsidiaries) holds 36% equity interest, and Nantong directly holds 30% equity interest, respectively, in Dalian. COSCO SHIPPING indirectly controls more than 50% of the issued share capital of the company Orient Overseas (International) Limited.