Losses at FSL Trust widen after customers defaulted on two bareboat charters

First Ship Lease (FSL) Trust's second quarter net loss has widened to US$7.2 million (S$9.1 million) from US$2.5 million previously.

The trust also posted lower revenue of US$21.3 million, down 27.2 per cent from the corresponding three months to June 30 last year.

During the quarter, the lessees of the trust's two crude oil tankers defaulted on their lease payments. Its remaining 23 vessels were fully employed, generating revenue from long-term bareboat charters, time charters and pool employment.

The default was by the subsidiaries of Geden Holdings over payments for the bareboat hires of two crude oil tankers, Aqua and Action.

They have since been renamed FSL Hong Kong and FSL Shanghai respectively.

The payment default was the main reason for the 13.8 per cent decrease in rentals from vessels on bareboat charter to US$15.5 million.

The trust subsequently took redelivery of FSL Hong Kong and FSL Shanghai on July 4 and July 15 respectively.

FSL Hong Kong has been redeployed in the spot market while FSL Shanghai is being hired on a short-term time charter with the shipping arm of a major oil trader.

Meanwhile, the board of directors of the trust manager said it was in the process of selecting suitable candidates to ensure the operations of the trust are not impeded by the resignations of chief executive Philip Clausius and chief financial officer Cheong Chee Tham at the end of June.