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Bunker supplier Brightoil Petroleum (Holdings) Ltd confirmed on Wednesday that it has suspended the intended sale of all its vessels, whilst also announcing that subsidiary Brightoil Shipping Singapore Pte Ltd (BOSS) has entered into charter agreements with Shell Eastern Trading (Pte) Ltd for its five VLCCs and four Aframaxes.

The charter agreements are due to commence by the end of this year, Brightoil said.

It means that of the 15 vessels owned by Brightoil and its subsidiaries, all except for the firm's six bunker tankers have been chartered out.

The announcement comes ahead of two court hearings in Singapore for Brightoil this week, with the first - related to an alleged collision involving the VLCC Brightoil Glory - due to take place on Thursday.

In the second case, Vietnam's Petrolimex has filed an application with the Singapore High Court to wind up Singapore branch Brightoil Petroleum (Singapore) Pte Ltd. The hearing is scheduled for Friday.

Decision to charter due to higher tanker rates

Back in July, Brightoil had said that it was in preliminary negotiations with potential investors for the sale of its Zhoushan oil storage and terminal facilities and its 15 shipping vessels.

But on Wednesday, the Hong Kong-listed firm explained: "Due to a change in shipping market environment, the Group has decided to terminate the commercial negotiation of the sale of 15 vessels," with the company explaining that freight rates for VLCCs had increased since October.

"The Group believes that the strong market trend will continue in 2019 and wants to continue pursuing the shipping business and [maintain] stable cash income for the Group," Brightoil declared.

No update was provided in the statement regarding the intended sale of the Zhoushan facilities.

Financing package

Brightoil also revealed that it is working with a lead bank under the guidance and coordination of the People's Bank of China to formulate a financing package and debt optimization plan for the company to optimize its debt structure and improve liquidity.

Developments are said to be "at a preliminary stage".

Trading in shares of Brightoil was halted more than a year ago, on October 3, with the company requesting a suspension until the publication of its financial results for the year ended June 30, 2017.

These results are yet to be submitted to the Stock Exchange of Hong Kong (SEHK) along with financial reports for subsequent periods.