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Algoma claws back final refund from bankrupt Mingde

Algoma claws back final refund from bankrupt Mingde
Canada’s Algoma Central Corporation announced it has collected a final refund guarantee in the amount of $29.1m relating to the cancellation of four shipbuilding contracts with bankrupt Chinese yard Nantong Mingde Heavy Industries.

Algoma had received payments totalling $53.4m in refund guarantees relating to the cancellation of the earlier three shipbuilding contracts, following the decision by the UK Arbitration Tribunal.

In 2010, Algoma entered into contracts with Mingde to build six Equinox Class dry bulk carriers. Only two of the ships were completed and delivered from the yard.

“The collection of this final refund guarantee brings to an end the extended process related to the cancellation of the four Mingde shipbuilding contracts.” said Peter Winkley, vice president, finance and cfo of Algoma.

“These funds, along with amounts previously collected, will be invested in active shipbuilding contracts now underway in Croatia and China,” Winkley continued.

Algoma entered into new contracts with shipyards in Croatia and China for the construction of five new Equinox Class bulkers, of which deliveries are scheduled in 2018.

The instalments refunded from Mingde will be used to fund a portion of the costs for the new shipbuilding contracts.