K Line moves to ensure shiprepair space

By Mike Grinter in Hong Kong

JAPAN’S K Line said today it will invest $25m in a Chinese shipbuilder/repairer to gain a place at the head of the queue when it requires ship maintenance.

The shipping line is to purchase convertible bonds to the value of $25m from Titan Quanzhou Shipyard’s intermediate holding company of the same name. When the bonds are fully converted K Line will hold a 5% stake in the yard which is due to become operational in 2009.

K Line’s most important destination for shiprepair is currently Dadong Shiprepair located near Shanghai.

A spokesperson for K Line said that it is experiencing some delay at its present facility as increased shipbuilding demand has led to the conversion of other shiprepair facilities in the region.

In addition to priority booking for ships in need of repair, purchase of the convertible bonds will also give K Line negotiation rights to make additional investments when Titan increases investments or expands its operations.

Titan Quanzhou Shipyard is a unit of oil-services company Titan Petrochemicals Group.