UPDATE 1-Vale says Valemax ship sale, leaseback could fetch $1.1 bln (Reuters U.S. – December 4, 2015)


Dec 4 Brazil’s Vale SA said on Friday that it plans to sell its 11 remaining Valemax iron ore carriers and lease them back in transactions that could raise $1.1 billion.

Vale has said it has experienced some delay in selling the ships, the key to its attempt to cut transportation costs between its Brazilian mines and Asian customers, as it seeks to get the best freight rates under contracts to lease the ships back from the new owners.

Each more than 360-meter-long (1181-ft-long) ship can carry 380,000 to 400,000 tonnes of ore and are among the biggest vessels afloat.

Vale has been selling its part of the world’s 35-vessel Valemax fleet for about $110 million each, Luciano Siani, chief financial officer of Rio de Janeiro-based Vale told investors at a conference in London.

The ships are needed to help Vale compete with its principal Australian rivals in the world sea-borne iron ore market. BHP Billiton Ltd and Rio Tinto Ltd, which are closer to China, the world’s largest market for the mineral, the main ingredient in steel.

By carrying more ore in each vessel, Vale’s per-tonne freight costs falls.

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