Oslo-listed shipowner and dry bulk transporter Pioneer Marine has decided to terminate the last two of its newbuilding contracts for Green Dolphin 38,400 dwt Handysize bulkers following a mutual agreement with Chinese Yangzhou Guoyu Shipyard.
According to the company, the instalments paid in relation with these contracts including interest are to be paid back by the refund guarantor.
“Following the termination of the last two newbuildings we have eliminated all capital expenditure for the company. Our proactive management of this unprecedented low cycle has seen us cancel ten of the twelve newbuildings ordered in the original program and demonstrates the complete alignment of management with shareholder’s interests,” Pioneer Marine’s CEO, Pankaj Khanna, said.
“We are now well positioned to not only ride out the current cycle but to also take advantage of opportunities as they arise,” Khanna said.
The decision follows the cancellation of newbuilding contracts for five bulkers in March 2016, which were on order at the same shipyard. At the time, Pioneer Marine said that it opted for the move due to an “ unprecedented downturn in drybulk freight rates.”
The company reported a net loss of USD 13.9 million for the first quarter of 2016, mainly attributed to the charges of USD 8.7 million which resulted from the termination of the newbuilding contracts.
Pioneer Marine’s Time Charter Equivalent (TCE) revenue amounted to USD 4.9 million in the quarter, against the USD 6.3 million seen in the same period in 2015, as the TCE per day dropped to USD 3,654 from USD 5,488 recorded in the first quarter a year earlier.
After the latest cancellation of the final newbuilding contracts, the company owns fourteen Handysize and one Handymax drybulk carriers.