SKY China Petroleum Services subsidiary dumps oldest vessels

Also the smallest, the vessels are being sold for over S$2 million.

The Board of Directors of SKY China Petroleum Services Ltd. announced that the Group’s subsidiary Wenling Xinghai Ocean Shipping Co., Ltd. has entered into a sales and purchase agreement with Yueqing Yunhong Shipping Co., Ltd. for the sale of the two smallest and oldest vessels, namely Yuan Leung and Yuan Leung #1, currently held by Xinghai.

YL and YL1 were leased out under time charter and these two vessels were returned to Xinghai upon the end of the time charter business in early 2012.

The management had earlier intended to revamp the boats into double hull vessels for meeting spot charter customers’ demands. However, after due consideration, it was concluded that the two small and aged vessels are not economical to carry out double hull modifications.

According to the announcement, there will be a decrease in capacities and higher running cost will be incurred after modifications. “A disposal is more economical in longer term,” said the statement.