Greek shipowner Okeanis Eco Tankers has been tipped to add suezmax charters after sealing a new VLCC term deal that helps "derisk" its 2021.
The Oslo-listed Alafouzos-family backed company fixed a vessel to a leading national energy company at $34,000 per day on Monday.
Okeanis will allocate either the 319,000-dwt Nissos Donoussa or Nissos Kythnos (both built 2019), starting in November.
Seven of its eight VLCCs are now contracted for the fourth quarter at an average rate of $42,000, Norwegian investment bank Fearnley Securities said.
This compares to spot numbers from the Middle East to Asia of just $9,000 per day, down another 10% from Monday.
Six of Okeanis' big tankers are essentially booked for 2021 at rates of more than $35,000 per day, Fearnley Securities said. Four of these have been taken by US charterer Koch.
"With risk increasingly on the downside both for fourth quarter and 2021, we see this as a sound move from Okeanis," Fearnley Securities analysts Espen Landmark Fjermestad, Peder Nicolai Jarlsby and Ulrik Mannhart said.
They are expecting the shipowner to target "similar deals on the suezmax side, where it already has firmed up longer charters for its two newbuildings delivering in the third and fourth quarters of 2020" at $30,000 per day for three years.
Spot rate weakness
Suezmax spot rates in Europe were languishing at $2,500 per day on Tuesday, down 7% from the previous day.
Fearnley Securities estimates Okeanis' net asset value at NOK 105 ($11.08) per share, trading at an implied VLCC resale equivalent of $77m.
The investment bank has a hold rating on the stock, with a target price of NOK 55. The shares were trading up 0.72% at NOK 56.20 in Oslo on Tuesday morning.
Fearnley Securities is expecting VLCC values to largely mirror those seen in 2017 and 2018, indicating a price little above $80m.
"Hence, in terms of real NAV downside risk we argue it is limited beyond cash burn which for 2021 should be limited given the coverage for 2021," the investment bank added.
The analysts said: "We expect dividends to be muted, rather seeing Okeanis retaining cash on the balance sheet until there is a clearer path to market recovery."
Dan Gold's QVT buying again
Meanwhile, Okeanis' second biggest investor, QVT Financial, has continued to build its stake this week.
The Dan Gold-led US fund has added another 69,000 shares in three deals at prices ranging from NOK 55.44 to NOK 55.74 per share.
It now owns 7.65% of the company.
Last week, QVT bought stock worth $1.4m to lift its holding to 7.44%.