Russia’s main shipping company has sold ships to buyers in Asia and the Middle East to repay its loans to Western banks.
Sovcomflot sold five tankers to Dubai-based Koban Shipping and four natural gas carriers to Singapore-based Eastern Pacific Shipping, according to the report.
The move comes as the company attempts to comply with sanctions imposed by the EU, which on Sunday set a deadline for businesses to cease business with Russia.
The deadline means that banks will have to receive all outstanding loans before that date. Sovcomflot’s exposure, according to the latest data, reached $2.1 billion in debt, according to Lloyd’s List.
However, the newspaper also reported that Chinese buyers would also be interested in acquiring vessels and are in negotiations.
Sovcomflot did not immediately respond to Insider’s request for comment made outside of normal working hours.
On April 25, the company announced in a press release that it had undertaken to repay its Eurobond. The company included its two outstanding Eurobond issues, totaling $928 million, with maturities in 2023 and 2028.
Eastern Pacific, which bought natural gas carriers, paid $700 million to a bank that took possession of the vessels, according to the Journal.
Maritime intelligence newspaper Lloyd’s List reported earlier that the company was looking to sell as much as a third of its fleet.
A senior banker believed to be involved in the negotiations with Sovcomflot told the newspaper: “Basically all banks and shippers have until May 15 to terminate contracts, which means Sovcomflot has a very short window to repay loans, and realistically there. There’s only one way to do it and that’s to sell the ships.”
According to the newspaper, a senior industry official with direct knowledge of the deals said 40 vessels from Sovcomflot’s fleet are being discussed with buyers from Dubai and China.
A senior banker told Lloyd’s List: “Repaying the loans before the deadline is clearly the immediate trigger for the sale of the fleet, and it seems clear that Sovcomflot is preparing for a possible future return to the market.”
They added: “But there’s also probably a calculation here on how many ships he’ll need to trade under the sanctions regime for the foreseeable future.”