Jinhui Shipping and Transportation (JST) has abandoned a bulk carrier newbuild ordered at Oshima Shipbuilding, citing the benefit of reducing future capital expenditure during “an extremely challenging operating environment”.
Zanzibar Naviera will take over the newbuild, a 60,000 dwt bulk carrier, a stock filing of Hong Kong-listed Jinhui Holdings said on 29 May. Jinhui Holdings is JST’s parent company.
After the order cancellation, JST agreed to forfeit USD2.9 million already paid to the shipyard.
Jinhui Holdings currently owns 36 vessels, comprising two post-Panamaxes, two Panamaxes, 30 Supramaxes, one Handymax, and one Handysize bulk carrier.
The company believes that the financial position and operations of the group will not be adversely affected by the cancellation.
In April 2014, JST placed an order through Japanese contractor Sumitomo at Oshima Shipbuilding to build the 60,000 dwt bulk carrier for USD29.1 million. The newbuild was scheduled to be delivered by 31 March 2016. It was planned to be used for chartering out to gain operating income by Jinhui Holdings’ shipowning unit after delivery.
For the first three months in 2015, JST returned to profit with USD4.7 million. However, its revenue fell 39% year on year to USD22.2 million. During the period, the company posted a settlement income of USD18.5 million from a charterer in relation to repudiation claims.