Yara Invests in Handysize Vessels

Following an evaluation of current new-build and time charter rates, Yara has chosen to build new vessels to replace existing time chartered vessels, covering part of its long-term transport requirement at attractive rates, meeting stricter environmental regulations and maintaining flexibility to serve Yaras production system.
Yara currently has a fleet of 16-18 time chartered vessels serving its European plants and long-term off-take agreements in Trinidad and Australia. The 3 vessels now on order will take advantage of latest design and engine developments to optimize fuel consumption, and 2 of the vessels will have ice-class capability. Scrubber or dual fuel engine options to meet SOX regulations effective 1 January 2015 will be decided by the end of March.
Yara is in discussions with potential partners for combined ship management and equity participation, however Yara aims to retain majority ownership in the vessels.
Going forward, Yara will continue to evaluate vessel ownership versus time charter on a case-by-case basis, relative to prevailing market conditions. Since time-charter contracts require a parent company guarantee of hire payments, a decision to build rather than charter vessels does not materially impact Yaras debt capacity.

Yara International ASA, January 28, 2014; Image: HMD