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Diana Shipping cancels shipbuilding contract

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Dry Bulk,

Diana Shipping Inc., a global shipping company specialising in the ownership of dry bulk vessels, has, through a wholly-owned subsidiary, provided a notice of cancellation of the shipbuilding contract with Yangzhou Dayang Shipbuilding Co. Ltd and Shanghai Sinopacific International Trade Co. Ltd dated 8 January 2014 (the contract), and Addendum No. 1 to the contract dated 21 April 2014 with Sumec Marine Co. Ltd with respect to a kamsarmax dry bulk carrier, Hull No. DY6006, with an original delivery date of 31 May 2016.

The company has exercised its right under the contract to cancel the contract due to a delay in delivery of 150 days after the original delivery date and to claim a refund of the pre-delivery instalment payments in an aggregate amount of approximately US$8.65 million together with interest at a rate of 5% per annum from the date of receipt of the instalment until the date payment is received by the company.

The refund of the aforementioned pre-delivery instalments together with interest thereon is covered by a Refund Guarantee from the Export-Import Bank of China dated 26 June 2014 (the Refund Guarantee). However, there can be no assurance as to the amounts ultimately payable or the timing of any refunds received under the Contract or the Refund Guarantee.

Diana Shipping’s fleet currently consists of 46 dry bulk vessels (two newcastlemax, 14 capesize, three post-panamax, four kamsarmax and 23 panamax). In addition, the company expects to take delivery of two new-building newcastlemax dry bulk vessels during the 4Q16 and 1Q17. Currently, the combined carrying capacity of the company’s fleet, excluding the two vessels not yet delivered, is approximately 5.2 million DWT with a weighted average age of 8.03 years.

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