Norwegian shipping groups cancel 11 vessels

Photo: Eitsen Group.com.

On April 8 two Norway-listed shipping groups said they had cancelled plans to build a total of 11 new vessels and were in discussions with lenders to restructure some debt.

The shipping market has been hurt by the global downturn, which has seen freight volumes and rates plunge. Numerous vessel cancellations have been announced as a large orderbook exceeds demand and liquidity problems have built up, reports Reuters.

Camillo Eitzen & CO ASA has reached an agreement with a yard in Japan for the cancellation of the six 2,500 cbm gas carriers on order, against a final and total settlement of MUSD 2.5. The existing newbuilding commitment on the gas vessels implies a reduction in newbuilding commitments of about MUSD 105 for Eitzen Gas. As a result of the cancellation, Eitzen Gas has no newbuilding commitments.

Also Eitzen Chemical ASA reported an agreement with the same Japanese yard for the cancellation of five 12.000 mdwt. stainless steel  chemical tankers on order. Both agreements are positive, in as much as the risk associated with the long term financing of  the respective vessel orders  have been eliminated.

Both Camillo Eitzen & Co ASA and Eitzen Chemical ASA are presently in discussion with its lenders, with the aim to amend the debt repayment schedule and to adjust the covenant structure, to better fit today’s market environment.

Camillo Eitzen & Co ASA (CECO) is a leading international shipping company with activities in bulk, gas, chemical, tank, ship management and maritime services. CECO is an Eitzen Group company.

Source: Eitzen-group.com

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