Russia's largest shipping firm is unloading a third of its fleet, in a move to repay loans to western banks and financiers before sanctions come into effect on May 15, according to Lloyd's List, citing industry sources.
One industry insider said Sovcomflot is attempting to offload 40 of the 121 vessels it currently owns with buyers in Dubai and China.
The European Union and the UK have slapped Russia with a series of sanctions -- one specifies that all banks must terminate Russian agreements by May 15. This means that Sovcomflot must satisfy all outstanding loans before that date, which has prompted the shipper to sell a third of its fleet.
"Basically, all banks and charterers have until May 15 to actually terminate the contracts, which means Sovcomflot has a very short window to pay back the loans and realistically, there is only one way it can do that and that is to sell the ships," said one senior banker currently negotiating terms with Sovcomflot.
Others with direct discussions of the deals said only eight vessels had been sold, with four of them finding buyers in Dubai. There are active conversations with Chinese buyers.
Lloyd's List couldn't figure out how much Sovcomflot owed western banks but said, "the last available consolidated accounts detail $2.1bn of debt, made up of short- and long-term bank loans."
Here's a breakdown of Sovcomflot's tanker fleet as per Lloyd's List.
On top of the May 15 deadline, the EU announced a proposed total ban on Russian oil imports on Wednesday, including the phase-out of Russian crude oil within six months and refined products by the end of the year. European Commission President Ursula von der Leyen said the bloc would wean off Russian oil in "an orderly fashion" (orderly, probably not ...).