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Capital Product Partners to install scrubbers on up to 14 ships

Written by Nick Blenkey
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Vessels to be retrofitted with scrubbers include five 5,000 TEU box ships on charter to Hyundai Merchant Marine

NOVEMBER 1, 2018 — Athens, Greece, headquartered Capital Product Partners L.P. yesterday released its third quarter financial results and announced a plan to equip part of its fleet with exhaust gas cleaning systems.

The partnership reported a net loss for the quarter of $22.6 million that included a non-cash impairment charge of $28.8 million related to the sale of a 2001-built 159,982 dwt crude oil carrier for $11.2 million. Excluding the impairment charge, the partnership’s net income for the quarter was $6.2 million.

With IMO 2020 looming, the partnership is planning to install scrubbers on up to 14 of its larger vessels: ten containerships, three crude tankers and one bulk carrier. The final decision for some of these vessels is expected to be reached within the coming months and the installation of the scrubbers is expected to be completed throughout 2019 and 2020.

In connection with an agreement to equip five 5,000 TEU containerships with scrubbers, the partnership has entered into a series of agreements with Hyundai Merchant Marine, the charterer of the vessels, to increase the daily charter rate by $4,900 for each vessel. The increase will be effective from January 1, 2020, or, if later, the installation date of the scrubbers until the expiry of each charter in 2024 and 2025, as applicable. The HMM Vessels are currently earning $23,480 gross per day following a restructuring agreement with HMM dated July 15, 2016. Under the restructuring agreement, the charter rate is set to be restored to the original daily gross rate of $29,350 from January 1, 2020 and will increase further to $34,250 once the scrubbers are installed.

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