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Plunging freight rate is the reason

Plunging freight rate is the reason
Titan Petrochemicals Group Ltd sold five of its VLCCs at a loss and is set to make even more losses through impending sales of the remaining tankers in its fleet.

Titan Petrochemicals Group Ltd sold five of its VLCCs at a loss and is set to make even more losses through impending sales of the remaining tankers in its fleet.

Titan Petrochemicals Group Ltd sold five of its VLCCs at a loss and is set to make even more losses through impending sales of the remaining tankers in its fleet.

The Hong Kong-listed tanker owner and operator made the announcement in an advisory to its investors urging them to ''exercise caution in dealing in the shares of the company'' as it faces difficult times on the back of a severe global economic slowdown.

Plunging freight rates were blamed for the fall in profit margins from the second half of 2008.

It said a slump in the re-sale market resulted in losses from the disposal of five VLCCs by the firm and the ''potential impairment loss of the remaining shipping vessels held by the group.''

Titan currently owns eight coastal tankers and four VLCCs including two of which are deployed as floating storage units. It has two more VLCCs under lease.

The firm further warned that the ''unprecedented fluctuation" in oil prices in the second half of 2008 had resulted in significant losses from the discontinuation and "potential write-off" of the oil supply business.

In a move to register a gain in the results of its financial year 2008, Titan announced in the advisory to its investors a cancellation of $84.64 million in guaranteed senior notes due 2012.

Of the $84.64 million notes issued by Titan and listed on the Singapore Stock Exchange, $75.58 million of the notes were cancelled on February 18 and $9.06 million of the notes are being cancelled.

The outstanding principal amount of the notes after the final cancellations will be reduced from $400 million to $315.36 million.

Titan however added that the effect of the gain from the cancellations ?will be offset? by other results that have been ''adversely affected in the current adverse economic conditions and substantial downturn of global financial markets.''

www.TurkishMaritime.com.tr

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