Zhongchang Marine has cancelled a 47,500 dwt bulker order at China’s Jiangsu Eastern Heavy Industries, a subsidiary of Singapore-listed JES International.
The decision comes a week after JEHI filed for debt and liabilities restructuring at Taizhou Intermediate People’s Court.
Zhongchang Marine said in a filling to Shanghai Stock Exchange that the decision to cancel the order has been taken to minimize the company’s exposure to risk in an already depressed situation in the bulk shipping market.
The order was placed back in 2012 in partnership with Minsheng Financial Leasing for two 47,500 dwt bulkers, however; Zhongchang cancelled the first vessel last year as it targeted lower operational costs.
Zhongchang has asked the yard to refund the prepayment and relevant interest of around CNY 70m ($11.18m) for the second cancellation.
Over the past few years, JEHI has sustained significant financial losses due to a decline in the shipbuilding industry as well as inadequate internal management.
Particularly, JEHI was impaired by its severe lack of liquidity and cash flow, which in turn questions its ability to implement the signed contracts.
World Maritime News Staff