Sale & Purchase
Ship sale and purchase brokers (S&P) handle the buying and selling of existing vessels in the secondary market to include newbuildings. The brokers provide information to the parties involved, assist in negotiation of the price and terms on behalf of all principals. In addition, the brokers provide assistance in the logistical details for the transfer of title and the vessel to the buyers.
MAKING AN OFFER BEFORE INSPECTION
A Buyer is requested to register their full company details and background including vessel ownership history.
A Buyer may wish to make an offer on a vessel before making an inspection. An MOA (Memorandum of Agreement) typically Norwegian Sale Form 93 or similar would be used.
Contingencies to the sale would typically include: subject to Buyer’s inspection, survey including dry dock and sea trial. A Buyer is encouraged to have their attorney draft the MOA or review any agreement provided by the Selling Broker.
* This is a good time for calculation of bunkers and lube oils onboard. The calculated amounts are agreed to and paid for separately from the sale price of the vessel, unless it is specifically agreed to incorporate in the sale of the vessel
Once the terms and amount of sale are agreed to, the Buyer would make a 10% deposit by wire transfer to a mutually agreeable escrow account, typically the Selling Broker’s account or Seller’s attorney’s. Funds are to be held until the inspection takes place and the Buyer either agrees to continue with the sale or rejects the vessel, in which case the deposit is refunded.
Prior to inspection, whether a Buyer is making an offer before or after the inspection, names of persons attending is provided to the Owner and arrangements for time and place are made.
Once the initial inspection is completed, it is recommended that a decision be made quickly whether to continue with the sale process or not. If continuing, the Buyer will have an agreed amount of time to accomplish the official survey according to the terms of the MOA.
Once the survey, dry dock inspection, sea trial process has taken place, a Buyer may decide to accept the vessel as is, or request new terms based on survey results or even rejection of the vessel in which case the Buyer’s deposit is refunded less any expenses incurred by the Seller which by agreement would have accrued to the Buyer.
Upon final agreement, the sale is readied for closing by the following details:
1. A Protocol of Closing outlining the closing process will be provided by the Buyer
2. A Protocol of Delivery and Acceptance will be established and agreed to by both parties.
3. Any Powers of Attorney must be completed prior to closing.
4. Formal Notice of Readiness is provided to Buyer stating that Seller is ready to deliver vessel over.
THIS IS A GENERAL LIST OF DOCUMENTS THAT MAY BE REQUIRED DEPENDING UPON THE COMPLEXITY OF THE SALE
SELLER’S DOCUMENTS REQUIRED FOR CLOSING
1. A legal Bill of Sale, Notarized, Attested and Apostilled to Buyer’s satisfaction
2. A current Certificate of Registration by issuing Flag state.
3. Confirmation of Class within 72 hours prior to delivery
4. Certificate issued stating vessel is free from registered encumbrances
5. Certificate stating vessel has been deleted from Seller’s registry
6. Invoice for remaining bunkers and lubes onboard at closing, per agreement
7. Any other certificate previously requested by the Buyers
BUYER’S DOCUMENTS REQUIRED FOR CLOSING
1. Letter of Release to Seller’s escrow for the jointly held deposit
2. Evidence of payment of the balance of proceeds to Seller’s account
3. Original Power of Attorney documents as required
4. Minutes of meeting by Buyers confirming their intention to purchase the vessel
5. Any other documents requested by the Sellers
Upon signing of all documentation, the ownership of the vessel is formally handed over to the Buyers.