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Published on September 25, 2007

The three vessels, each of 53,000 dead-weight tonnes, will be double-hulled Handymax bulk carriers. They are expected to be delivered in October 2010, February 2011 and June 2011, as per a filing with the Stock Exchange of Thailand (SET).

Payment for the ships will be made in five instalments. The first 20 per cent was paid immediately, the second, third and fourth lots of 20 per cent each will be paid during construction, and the final instalment will be paid upon delivery.

Thoresen Thai Agencies currently owns 45 general cargo vessels and dry-bulk carriers. Two new vessels are expected to be delivered in December 2009 and September 2011. With the latest contract, the company will take delivery of five new vessels between 2009 and 2011.

The company's stock closed yesterday at Bt58.50 a share, up 6.36 per cent from last Friday.

Siam City Securities' analyst was bullish over Thoresen Thai Agencies' business outlook after the Baltic Dry Index marked a fresh record high of 8,956 points last Friday, because of tight supply. Time-charter rates are expected to continue rising until late next year.

Thoresen Thai Agencies, which the analyst described as "the most outstanding shipping stock", will receive a blessing from the increasing freight rate. Because up to 82 per cent of its bulk vessels are not obligated to contracts, the company will be free to enjoy the rising spot time-charter rate, the analyst said. The broker has recommended that investors snap up Thoresen Thai Agencies shares, with a revised fair value of Bt73.92 apiece. Of this value, Bt59.92 derives from the company's shipping business and the rest from the listing of its Mermaid Maritime subsidiary on the Singapore Exchange.

Another analyst said the construction of three new vessels reflected the view of Thoresen Thai Agencies executives that the time-charter rate would continue to increase over the next few years.

"If they were not sure the time-charter rate would climb further, the increase in the number of vessels might not be worthwhile. So, we believe the outlook for the shipping business will remain solid," the analyst said. -

Siriporn Chanjindamanee,

The Nation