Seatrade Maritime is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Dae Sun Shipbuilding trashes unpaid contract

Dae Sun Shipbuilding trashes unpaid contract

Seoul: Dae Sun Shipbuilding & Engineering (DSSE) has cancelled a contract with an unidentified Asian shipowner for the construction of six 32,000-dwt bulkers plus two on option, according to the Kaiji Press. It blamed the owner's failure to pay the down payment within the fixed time limit under the contract. It gave no further details. This is the third cancellation of a newbuilding contract unveiled since the turn of 2008.

DSSE made the disclosure in a notice to the Seoul Stock Exchange. It did not name the owner that had ordered the ships. The South Korean shipbuilder signed the contract for the eight bulkers in December 2007 at a per-ship price of $37 million for delivery by May 2011. They were the first bulkers to be built by DSSE. The deal required the owner to complete the down payment within 60 days of the contract date.

Since the beginning of 2008, there have been cases of newbuilding contract cancellation against the backdrop of a credit crunch caused by the U.S. subprime loan woes and delayed ship deliveries by smaller yards. In January, Hong Kong owner Jinhui Shipping & Transportation Ltd. cancelled its orders for two very large ore carriers (VLOCs) from China's Dalian Shipbuilding Industry Co. (DSIC). The biggest factor behind the decision appeared to be Jinhui's failure to get favorable loan terms. In February, Odfjell Tankers canceled a contract with Russia's Sevmash Shipyard for the construction of 12 chemical carriers. Odfjell attributed the decision to the "serious delays in the construction process" and "demands for further price increases" by Sevmash. Details about DSSE's cancellation were not made known immediately. However, the cited failure on down payment indicates that the owner had been unable to procure the necessary funds.

DSSE had a similar case back in 2004, when it had to cancel a contract for two containerships due to failure on down payment.  [04/03/08]

Hide comments
account-default-image

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish