NOL Signs Contracts for 12 New Ships

Neptune Orient Lines confirmed Monday contracts with two Korean shipyeards to build 12 container vessels, including 10 of its largest and most efficient vessels.

The confirmation follows the group’s announcement June 15 of letters of intent with both shipyards for its $1.54 billion ship-building program.

NOL signed contracts with Hyundai Samho Heavy Industries for 10 vessels with capacities of 14,000 20-foot equivalent units of containers.

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The parent of container line APL also signed contracts with Daewoo Shipbuilding & Marine Engineering for two new 9,200-TEU ships and the upgrade of 10 8,400-TEU vessels to 9,200-TEUs.

Singapore-based NOL also announced it agreed to charter five of the newly ordered 14,000-TEU container vessels to MOL, its partner in the New World Alliance, when those ships are delivered in 2013 and 2014.

NOL and MOL said they reached the three-year charter arrangement to upgrade service in the New World Alliance. APL is part of the alliance along with MOL and Hyundai Merchant Marine.

NOL said the charter agreement figured into its decision to order the 10 14,000-TEU ships, which the carrier views as a means to balance the alliance's capacity contribution and allow APL to gradually increase capacity.

The 10 14,000-TEU container ships that will be delivered between 2013 and 2014 will be deployed on existing Asia-Europe routes. Half will be operated by APL, the other half by MOL.

NOL also announced that it had received firm financing offers from various banks and financial institutions for the 12 new vessels, for a total loan amount of about $1.14 billion.

The rest of NOL’s new ship-building program will be funded by bonds it recently issued and from internal resources.

-- Contact Peter T. Leach at pleach@joc.com. Follow him on Twitter @petertleach.