Algoma Collects Refund on Four Cancelled Shipbuilding Deals

Algoma vesselIllustration; Image Courtesy: Algoma

Canadian shipping company Algoma Central Corporation has received full refund of instalment payments for the now-cancelled shipbuilding contracts with Croatia’s Uljanik and 3. Maj Shipyard.

The company entered into five shipbuilding contracts with 3. Maj Shipyard, an operating unit of Uljanik.

After considerable delay, the first of the five vessels was delivered in 2018, however, Algoma decided to cancel the remaining four contracts. The decision was made amid the shipyard’s financial difficulties, which led to a much-publicized attempt to refinance the company and shipyard management was unable to put forward a credible plan that would lead to completion of the remaining hulls.

Demands for repayment of the related instalments were made in December 2018 and the banks guaranteeing the repayment of the amounts have now remitted a total of CAD 115 million (USD 86.6 million) in full settlement of the claims.

“While we are extremely disappointed in the failure by the shipyard to complete the vessels on time, the shipyard and its banks have been very cooperative in finalizing the cancellations and refunding the instalments promptly,” said Peter Winkley, Chief Financial Officer of Algoma.

As a result of contract cancellations, the company has taken steps to extend the expiry dates on three existing option contracts held with Yangzijiang Shipyard in China (YZJ) until later in 2019. The options, which provide Algoma Central Corporation with a choice to build Equinox Class self-unloaders or gearless bulkers, were to expire at the end of December.

“The extensions provide Algoma time to assess which type of ship to build, taking into account our current fleet plan and the needs of our customers,” said Gregg Ruhl, Chief Operating Officer of Algoma.

Share this article

Follow World Maritime News

In Depth>

Events>

<< Jun 2019 >>
MTWTFSS
27 28 29 30 31 1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30

World Gas Series: Morocco Summit

Bringing together key players in the gas value chain in Morocco, the World Gas Series:

read more >

GreenTech in Shipping USA Forum 2019

GreenTech in Shipping USA Forum is an event for Maritime leaders who want to unlock successful business formula of the industry!

read more >

Shipping Transformation Asia

Shipping Transformation Asia will provide a platform for future-focused discussion in the shipping,…

read more >

Global Sustainable Shipping Forum 2019

The event will provide valuable insights from conference sessions, great networking opportunities and will offer…

read more >