Zhongchang Marine cancels bulker order at loss-making JES yard

The contract, inked back in 2010 with Minsheng Financing Leasing backing Zhongchang Marine, included a pair of the 47,500 dwt bulkers. One of the newbuildings was already cancelled in early 2014.

Due to the prolonged slump in the dry bulk shipping market caused mainly by the oversupply of ships, Zhongchang Marine decided to abort the order for the remaining newbuilding so as to lower its exposure to the weak market, the Chinese shipowner told the stock exchange.

JEHI, the main subsidiary of Singapore-listed JES International Holdings, has recently filed for an application at a Chinese court to restructure its debt and liabilities.

The shipyard has sustained significant financial losses due to the decline in the global shipbuilding industry, particularly in China, as well as inadequate internal management.

Zhongchang Marine and Minsheng have jointly requested for a refund of RMB70m ($11.2m) from JEHI for the cancellation of the contract.

Zhongchang Marine added that the buyer has the right to scrap the shipbuilding contract in accordance to the agreed terms as JEHI has lost its ability to carry on with the vessel construction.