ESL Shipping offloads Supramax duo to drive green transition

Finland-based shipping company ESL Shipping has signed a memorandum of understanding (MOU) to sell its two Supramax class vessels in an effort to accelerate the green transition.

As informed, the 2012-built bulkers Arkadia and Kumpula will be sold to companies belonging to HGF Denizcilik Limited Sirket group, a Turkish shipping and logistics company, for $37.1 million.

The vessels are expected to be delivered to their new owners in April-May 2024.

The transaction is part of a program announced in April 2023 to support and accelerate ESL Shipping’s low-carbon growth strategy.

Following the sale of the Supramax vessels, ESL Shipping will continue to focus on Handysize and Coaster vessels and further develop its partnership strategy with the current and future customer base.

In 2023, the operating profit of the Supramax vessels was €1.6 million, a decrease from €5.7 million in 2022.

“The sale of the two Supramax vessels is well aligned with ESL Shipping’s low-carbon strategy. It also stabilizes ESL Shipping’s profit generation and frees up capital for Aspo’s and ESL Shipping’s future strategic growth efforts,” Rolf Jansson, CEO of Aspo Group and Chairman of the Board of ESL Shipping, commented.

The two 1A ice-strengthened Supramax vessels of 56,000 dwt were originally received in 2012. The length of the vessels is 197 meters and the maximum draft with a full cargo is 13 meters. Both m/s Arkadia and m/s Kumpula have sailed under the Finnish flag. Where possible, the crews of the Supramax vessels will be re-employed in ESL Shipping’s remaining vessels.

“As the traditional markets for our Supramax vessels on the Baltic Sea and the Arctic have changed significantly, now is the right time to sell these vessels. The sale will support our roadmap towards green shipping and our ambition to bring fossil-free handysize vessels to the market. The sale enables us to allocate even more resources to accelerate the green transition,“ Mikki Koskinen, Managing Director of ESL Shipping, said.

Earlier this year, ESL Shipping joined the Science Based Targets initiative (SBTi), committing to setting both near-term and long-term science-based emission reduction targets aligned with the goal of limiting global warming to 1.5°C above pre-industrial levels.

In 2021, ESL Shipping announced its climate targets, aiming to reduce its emission intensity per ton-mile by 50% by 2023 and achieve net zero operations by 2050. However, in alignment with its commitment to science-based targets, the company has expedited its net zero target to 2040.

Last month, ESL Shipping attracted a new co-investor, Finland’s pension insurance company Varma Mutual Pension Insurance Company, that will invest in the shipping company alongside OP Finland Infrastructure LP.