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Euroseas cancels second ultramax newbuild at Dayang

Euroseas cancels second ultramax newbuild at Dayang
Euroseas has cancelled a second ultramax at Dayang Shipbuilding in China and is now headed into arbitration with the shipyard.

Nasdaq-listed Euroseas said it had cancelled the ultramax due to be delivered at the end of August 2016 due to “excessive construction” delays. It is the second ultramax newbuilding that the company has cancelled at the yard, with it axing the first one back in June 2016, also due to excessive construction” delays.

Euroseas said it had demanded the return of progress payments and other expenses secured by the refund guarantee.

Dayang is disputing the cancellation and is headed in arbitration with the shipowner.

"After the cancellation of our newbuilding program with the Dayang yard, we are looking forward to receiving our progress shipbuilding payments of about $18m for the two ultramax vessels which we demanded and expect to be refunded,” said Aristides Pittas, chairman and ceo of Euroseas.

Meanwhile Euroseas has also amended a newbuilding contract with Yangzijiang Shipbuilding for a kamsarmax bulker that was due to be delivered in the first quarter of 2018. Under the amended contract the company has till the end of 2016 to decide whether to build the vessel, or one of a different type, buy another vessels from Yangzijiang at a mutually agreed price or cancel the contract altogether.

“The optionality we introduced in our remaining newbuilding contract for a Kamsarmax vessel allows us to be in full control of our capital expenditures,” Pittas said.