Ukrainian Danube Shipping Company has put up for sale six bulk carriers, the company’s CEO Dmytro Moskalenko has announced.
Applications from those wishing to participate in the auction were launched on the zakupivli.pro website on December 5 and will last until December 12. All six vessels are being auctioned as a single lot. Its price is UAH 440.68 million (excluding VAT).
“UDP is starting to sell the maritime fleet. It is a painful but the only right decision. UDP’s key segment is river freight transportation. We have to get rid of unprofitable non-core assets and direct resources to modernize the river fleet. It is in the river freight segment that the shipping company has development prospects,” Moskalenko wrote on Facebook on Friday.
According to him, shipowners are likely to be interested in the repaired Vilkovo and Izmail, with documents ready for operation.
“However, it is important that the Tatarbunary, Viana do Castelo, Kiliya and Reni, which have been in storage for many years, also find a buyer,” said the USP CEO.
According to Moskalenko, last year the UDP began to restore the maritime fleet.
“During the blockade of Odesa ports, the government set a task to ensure the export of agricultural products from the Danube ports. At last year’s freight rates, the restoration of the fleet was a profitable investment with a short payback period. However, after the blockade of Odesa ports was lifted, freight rates dropped several times. The Danube ports became empty. And the further trend is disappointing,” he said.
According to the UDP CEO, a number of private companies operate at low rates as well, as they “optimize taxes, operate hundreds of fleet units of different tonnages, work in different segments, in different markets with guaranteed return loading of vessels.”
“We are a state-owned company that pays all taxes in good faith. In such unequal conditions, with a working fleet of two small ships (the other four are out of commission), it is almost impossible to compete,” Moskalenko emphasized.
He noted that the USP was working on all possible options: they considered proposals to transfer the vessels to a time charter. However, the income from the charter will not cover the future costs of maintenance and repair of the vessels. The project could have become deliberately unprofitable for the state.
“Keeping the vessels idle forever is also not an option. Fleet maintenance is a significant monthly expense. Our vessels are more than 30 years old, so in some time we will have to spend money again to extend the validity of the documents,” Moskalenko summed up, noting that the decision to sell the fleet was supported by the shareholder, the Ministry of Community Development, Territories and Infrastructure of Ukraine.
