Pioneer Marine cancels five new vessel builds

These are:

• Termination of five newbuilding contracts for Green Dolphin 38 400 DWT handysize vessels following mutual agreement with Yangzhou Guoyu Shipyard. The instalments paid in relation with these contracts including interest will be paid back by the refund guarantor.
• Delays in the current delivery schedule with one vessel now scheduled to be delivered in 3Q16 and the last vessel in the newbuilding program to be delivered in 1Q17.

The company's CEO, Pankaj Khanna, stated: "The unprecedented downturn in dry bulk freight rates has prompted us to cancel another five of our newbuilding contracts at Guoyu Shipyard. This cancellation was achieved amicably through mutual consent in a negotiated settlement with the shipyard. The cancellation frees up US$30 million in cash immediately, to add to our existing cash balance of US$57 million as of the end of February 2016. In addition, we have US$24 million in pre-paid instalments for the last two newbuildings. To put it simply we have US$111 million of cash with two newbuildings to be delivered in the next ten months.”

Khanna continued: "We have proactively created a long runway for the company even assuming today’s very low freight rates, reduced our capital expenditure commitments and have worked in the last few months to trim our costs significantly. Post the cancellation, we now have 15 vessels on the water and only two newbuildings, which have been financed with 60% debt with Sinosure cover. Pioneer is now in a strong position to take advantage of the distress in the dry bulk market either from direct asset purchases, bank deals or an M&A transaction.”

Read the article online at: https://www.drybulkmagazine.com/shipping/24032016/pioneer-marine-cancels-five-new-vessel-builds/