Singapore-listed shipbuilder, COSCO Corporation Singapore (COSCO) has delayed the delivery dates of two platform supply vessels (PSVs) after reaching mutual agreement with its buyers.
COSCO did not give any reasons for the delay, according to its filing in Singapore Exchange (SGX), but speculation has led to the volatile crude oil prices, prompting charter and utilisation rates for offshore support vessels to drop.
Initially, COSCO Guangdong Shipyard, a subsidiary of COSCO’s 51% owned subsidiary COSCO Shipyard Group, had signed four shipbuilding contracts with an American shipowner for the construction of four PSVs at a value of over USD105 million in March 2012.
Two of the PSVs were subsequently delivered on 15 December 2014 and 17 February 2015. COSCO Guangdong and the American shipowner have mutually agreed to extend the delivery dates of the remaining two PSVs, originally scheduled for delivery in early 2014 until 30 June 2016 subject to certain terms and conditions.
“To date, the construction of the two PSVs has been significantly completed,” said COSCO in its filing to SGX.
Under the agreement, the shipowner can elect to take delivery of any one or both of the completed PSVs at any time prior to 30 June 2016 and the date may be further extended by mutual agreement of the parties.
Meanwhile, the company also stated that in the event that the shipowner elects to take delivery of a PSV, the remaining payment terms under the shipbuilding contract in respect of that PSV shall continue to apply.
Moreover, in the event that the PSV delivery is not taken by the shipowner, COSCO Guangdong shall refund to the shipowner the instalments paid on such PSV, being USD5.4 million per PSV together with interest thereon. In addition, the shipowner shall be relieved of the obligation to pay to COSCO Guangdong the remaining payment under the shipbuilding contract in respect of such PSV.