Ocean Yield Cancels Third LEG at Sinopacific

Norwegian ship owner Ocean Yield ASA has reached an agreement to cancel the final of three newbuilding Liquefied Ethylene Gas (LEG) carriers which were ordered from China’s shipbuilder Sinopacific Offshore & Engineering in May 2014.

Ocean Yield has paid USD 16.2 million in pre-delivery instalments to the shipyard, which is secured by bank guarantees.

“These funds shall be repaid to the company with 5% interest upon cancellation of the shipbuilding contract. Funds repaid will be re-invested into new projects” Ocean Yield said.

The company added that the cancellation is not expected to have any material accounting effect in the fourth quarter.

The cancellation was a result of the negotiations which were undertaken by the parties after Sinopacific Offshore & Engineering filed for receivership in August 2016.

The first vessel under the contract is expected to be delivered towards the end of October 2016 and will thereafter enter into its long term charter with Hartmann/SABIC, while the second vessel is expected to join its owner on July 1, 2017.

Sumec Marine Co. Ltd. will finance and finalise the construction of the second vessel at the Dayang Shipyard.

Scheduled for 15-year “hell and high water” bareboat charters to the German Hartmann Group, the 36,000 cbm vessels have 10-year sub-charters to SABIC Petrochemicals B.V.

Ocean Yield said that the bareboat charter and the sub-charter contract have been amended accordingly.

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