The Canadian shipping company Algoma Central Corporation has received USD 53.4 million from refund guarantees after it cancelled three shipbuilding contracts with China’s troubled Nantong Mingde Heavy Industries shipyard in 2015.
The company said that the refund of amounts paid on a fourth shipbuilding contract is still subject to arbitration.
The contracts were a part of a series of eight Equinox Class dry bulk carriers ordered from the Chinese shipyard in 2010.
Only three of these vessels were constructed and the company decided to cancel the remaining contracts and collect a refund of the related construction instalments.
“The collection process proceeded smoothly once the shipyard and its representatives ceased to pursue their arbitration of our cancellation of the contracts,” said Peter Winkley, Vice-President and CFO of Algoma.
Following contract cancellation, Algoma entered into new contracts with shipyards in Croatia and in China for the construction of five new full sized Equinox Class vessels, which are scheduled for delivery in 2018.
Algoma said that the instalments refunded in this action will be used to fund a portion of the costs for the new contracts.
Featuring an overall length of over 225 metres and a beam of 23 metres, the new Equinox Class ships qualify as Seaway Max size ships.
The vessels will be able to carry 29,300 tonnes at maximum Seaway draft. The new dry bulkers will also be equipped with the exhaust gas scrubber technology.