RIGA - Latvijas Kugnieciba (LASCO) announced this week that it would buy three tankers from a Monte Carlo-based company and was in talks with a South Korean shipbuilder to buy four oil-product tankers in two deals estimated to be worth up to $200 million.
According to reports, the Latvian shipper has signed an agreement with Andromeda Shipping for the purchase of three medium-size ice-class tankers for $33.25 million each. The tankers, which have a holding capacity of 37,000 tons each, were built in 2003, the Kommersant Baltic Daily wrote in its Feb. 17 edition.
LASCO's management council approved the deal on Feb. 13, the paper reported.
In absence of any delays, LASCO could become the owner of the Pink Star, the Coral Star and the Purple Star this May or June.
The offer by Andromeda was the most attractive option for swiftly replacing scrapped tankers, said tanker department director Alvis Akmens.
A company spokeswoman said that it had set up a task force with participation of independent international shipping experts to find the best solution for replacing its ageing tanker fleet.
Also on Feb. 13 the council signed a letter of intention to purchase four oil-product tankers from Hyundai Mipo Dockyard, each of which would cost some $30.5 million.
However, the spokeswoman said that the deal with the South Korean shipyard had not been finalized yet. Initially the agreement was to be reached by Feb. 12, but the deadline was extended until Feb. 17.
"It should be taken into account that a letter of intent is not a legally binding document and does not impose on either party any financial or legal obligations," stressed the spokeswoman.
The two deals underscore the shipper's intensive efforts to modernize its ageing fleet and make the company competitive in an industry that is coming under increasing regulation by the European Union.
At the end of 2003 LASCO also cut a deal with Croatian shipbuilders, 3 Maj, for eight ice-class tankers that would carry oil and chemical products. Under the agreement, 3 Maj is to deliver the first tanker in 2006 and the rest by 2008. For the contract to take effect the Croatian shipyard must furnish LASCO by March 31, 2004, with a bank guarantee securing the shipper's investment should the contractor fail to carry out its obligations.
At the beginning of 2003, LASCO's fleet consisted of 52 vessels, including 36 tankers with an average age of 18 years, 13 refrigerator ships with an average age of 16 years, two gas-carrier ships with an average age of 2 years and one dry cargo vessel aged 20 years.
Nearly half of LASCO's shares are owned by the Ventspils Nafta oil transit concern.