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Sainty Marine hit by contract cancellation, delays newbuildings delivery

Sainty Marine hit by contract cancellation, delays newbuildings delivery
Chinese shipbuilder Sainty Marine has been hit by a contract cancellation for one lake freighter and has trouble handing over two 64,000 dwt bulk carriers on time.

Shenzhen-listed Sainty Marine announced on Tuesday that a shipowner, whose name was not disclosed, has informed that it will cancel a lake freighter, which was supposed to be jointly built by Sainty Marine and Nantong Mingde Heavy Industry.

The newbuilding was slated to be delivered by 31 March 2015.

Sainty Marine is in the midst of applying a debt-for-equity rescue deal for debt-ridden Mingde Heavy Industry. The two shipbuilders have been collaborating in the past on shipbuilding contracts as a way to reduce cost and utilise facilities.

Separately, Sainty Marine has also not been able to deliver on time a pair of 64,000 dwt bulkers ordered by Thailand’s Precious Shipping. The pair were part of an original deal for Sainty Marine to construct a total of ten 64,000 dwt bulkers for the shipowner.

The two cancelled orders were due for delivery by 31 March 2015. If the Chinese yard is still unable to deliver the vessels by 30 June this year, penalties will be imposed by the shipowner.

Earlier, Precious Shipping had rejected taking over two new 64,000 dwt bulkers from Sainty Marine, with the former saying that the newbuildings did not meet standards of fuel savings. With these two bulkers facing risks of non-delivery to the buyer, the two contracting parties may go into arbitration, according to Sainty Marine.

Sainty Marine has recently announced that it is facing a string of problems, including assets and bank accounts being frozen, resignation of senior officials, court order to pay compensation, risk of a failed rescue deal for Mingde Heavy, and threat of a delisting due to continuing losses.

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