Euroseas Cancels Another Ultramax at Dayang

Greek owner and operator of drybulk and container carrier vessels Euroseas Ltd. has cancelled another Ultramax dry bulker, Hull Number DY 161, under construction at Sinopacific Shipbuilding’s Dayang yard in China.

The 63,500 dwt ship, which was previously scheduled for delivery at the end of August 2016, was cancelled due to excessive construction delays, the company said.

Euroseas has demanded the return of its progress payments and other expenses as specified in the newbuilding contract and secured by refund guaranties.

The parties have referred the matter to arbitration.

The announcement comes on the back of the previous cancellation when the company terminated its first Ultramax newbuilding ship, Hull Number DY 160, in June 2016 with the same yard due to excessive postponements.

“After the cancellation of our newbuilding program with the Dayang yard, we are looking forward to receiving our progress shipbuilding payments of about USD 18 million for the two Ultramax vessels which we demanded and expect to be refunded,” Aristides Pittas, Chairman and CEO of Euroseas, said.

Euroseas earlier signed an addendum to its shipbuilding contract with China’s Jiangsu New Yangzijiang shipyard for the construction of a Kamsarmax vessel, scheduled to be delivered during the first quarter of 2018.

The company now has until December 31, 2016 to decide whether to build the vessel, build a vessel of different type, credit the payment already made as part of the original contract (USD 2.7 million) to acquire a different vessel from the yard at a mutually agreed price, or decide to cancel the shipbuilding contract without any additional cost.

Pittas said that this option allows Euroseas “to be in full control of our capital expenditures,” adding that these developments, along with a debt refinancing and completed or agreed loan restructurings, “will permit us to use a significant part of the newbuilding contract payments to be refunded for investments in other vessels.”

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