Cash buyers are companies that specialize in the trade of end-of-life vessels, and sales of end-of-life ships to breaking yards , Therefore, ship owners rarely enter into direct contact with the ship recycling yards. Instead, cash buyers first pay ship owners up-front before the ship reaches its final destination to be dismantled, and then re-sell the ship to the breakers yard that can offer the highest price.

Cash Buyers provide a key commercial service to shipowners and to ship recyclers and this is why the majority of recycling deals go through Cash Buyers.

The shipowner receives from the Cash Buyer the following services:

• intimate knowledge of the individual recycling markets
• cash payment instead of payment via Letters of Credit
• the ability to pay, in cash, a sizeable deposit
• comfort to the shipowner that his risk is mitigated, especially in cases of a falling scrap market.

The recycler receives from the Cash Buyer the following services:

• access to the international shipping market
• acceptance of the recycler’s Letter of Credit.

Historically, the role of the Cash Buyer has been that of a commercial facilitator who mitigates financial risk.
By using cash buyers, ship owners seek to avoid legal, financial and other risks related to selling a ship for breaking to a breakers yard. They can also claim not to be responsible for the demolition of the ship.

‘AS IS, WHERE IS’ SALE

The ship owner sells its ship exactly how it is and where it is at the point in time defined in the contract. The cash buyer then takes care of moving, managing and crewing the ship on its last voyage and dealing with the required paper work and authorities at the breaking site.

‘UPON DELIVERY’ SALE

The ship owner delivers the vessel to an agreed location, usually in the proximity of the yards, for instance at anchorage point outside a beaching destination. Sometimes ships can be delivered in a port which may not be in the country of breaking, however. Operational costs until the delivery location are covered by the seller. Any movement of the ship or further administrative work is done by the cash buyer after that point, in the same way as an ‘as is, where is sale’.