By James A. Loyola
Lorenzo Shipping Corporation reported that its Board of Directors has approved the execution of four Time Charter Agreements with NMC Container Lines Inc. which is an affiliated company with common shareholders.
In a disclosure to the Philippine Stock Exchange, LSC said the Charter Agreements will take effect on October 1, 2018 or as soon as practical thereafter.
The Charter Agreements will have an initial term of three years and both parties shall have the option and can mutually agree to extend the Initial Term by another three years and to further extend the Extension Period by an additional three years. The Charter Agreements will be based on an internationally approved standard agreement of the Baltic and International Maritime Council at fair market levels, terms and conditions.
Pursuant to the terms and conditions of the Charter Agreements, LSC will augment its fleet of five container ships with an additional four container vessels owned by NMCCLI.
The NMCCLI Vessels, namely General Romulo, General Natividad, Generl Evangelista and MV Rasalas, will be delivered to LSC on the Effective Date.
The NMCCLI Vessels will supplement the liner services of LSC upon their delivery. All LSC and NMCCLI Vessels are trading under Philippine cabotage regulations.
“The Charter Agreements will allow LSC to provide immediate increased service coverage and to expand its customer base more efficiently without the need for excessive capital investment or acquiring tonnage through ownership means,” the firm said.
It added that, “the Charter Agreements will also enable LSC to achieve economies of scale and greater synergies from streamlined processes and systems.”
LSC said the benefits of the Charter Agreement to its customers include greater flexibility across trade routes and an increased coverage of their domestic shipping requirements.