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FSL Trust divests vessels to pare debt

FSL Ship Lease Trust has drawn on majority of the US$10.8 million proceeds from the divestment of two containerships that are coming off charter, to pare down its outstanding debt.

Just over US$8 million of the proceeds from the vessel disposals will be applied to an outstanding loan facility and reduce FSL Trust's quarterly loan repayment by about US$320,000 from the first quarter of this year.

FSL Trust will incur a loss of US$4.2 million from the vessel disposal in Q1 2016, following a writedown of US$1 million in Q4 2015.

FSL Trust's chief executive officer, Alan Hatton, said, "despite the trust's best efforts, given the current container market environment, further employment for the vessels could not be found and the decision to dispose of them was taken swiftly to protect unitholder value.

"The proceeds will be primarily used to reduce the trust's outstanding debt and scheduled debt repayments going forward," he said.

The two containerships - the 1994-built, 4229-teu Ever Radiant and Ever Respect - have been on bareboat charter to Taiwan-listed Evergreen Marine Corporate Ltd since 2006 and will be finishing the lease at the end of this month.

FSL Trust's fleet now stands at 22 vessels comprising five containerships, 12 product tankers, three chemical tankers and two crude oil tankers.