Euroseas Cancels First Ultramax Newbuilding

zoomIllustration; Image Courtesy: Diana Shipping Greek owner and operator of dry bulk and container ships Euroseas Ltd. has terminated the order for the first of its Ultramax vessels, Hull Number DY 160, under construction at Sinopacific Shipbuilding’s Dayang yard in China. The company said that the vessel was cancelled due to excessive construction delays. 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, Euroseas added. The 63,500 dwt Ultramax, which was planned to be renamed Alexandros P,  was originally scheduled for delivery in the second quarter of 2016. The companys second newbuilding contract for a similar Ultramax vessel, Hull Number DY 161, with the same yard is also facing significant delays. Furthermore, Euroseas signed an addendum to its shipbuilding contract with Chinas Jiangsu New Yangzijiang shipyard for the construction of a Kamsarmax vessel, scheduled to be delivered during the first quarter of 2018. According to the addendum, the company acquired the option 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. In February 2016, Euroseas took delivery of a similar Kamsarmax vessel, M/V Xenia, which was chartered for four years at USD 14,100/day with an additional year at USD 14,350/day at the charterers option.