China: Nantong Shipyard to Identify Cause of The Incident on HYSY 682

On January 14, 2012 at approximately 2:00 p.m., an incident occurred at Wuchang Shipbuilding’s Nantong Shipyard, on vessel with the yard No. HYSY 682. The incident on the vessel resulted a leak in the hold of HYSY 682 which led to its grounding.

The Company and the Shipyard are investigating the precise cause of the incident and the company is actively assisting the shipyard in taking remedial actions. The incident has not created any environmental pollution.

HYSY 682 is a deep water AHTS vessel of the Company and is being built at a cost of RMB 740 million. The Company has taken out full insurance on HYSY 682 and the Company has initiated claim procedures in relation to the incident in accordance with the insurance policy for the vessel. In addition, in accordance with the construction contract for the vessel, the Shipyard will be responsible for the safe keeping of the vessel prior to its delivery. In case of losses or damages to the vessel, the Shipyard will be held liable for the relevant losses.

The Company does not consider that the incident will have any material adverse effect on the financial position or operation of the Company.

(740 million Chinese yuan = 117.25522 million U.S. dollars)

[mappress]

Shipbuilding Tribune Staff, January 18, 2012; Image: cosl