Chinese shipyard Dongfang Shipbuilding has cancelled orders worth $60m after failing to secure finance for its remaining ship order.

Dongfang Shipbuilding (DFS) has announced a 91% drop in its order book from $64.7m in November to $5.7m in December 2011. The company is facing heavy full-year losses and, in a battle to secure financing for its remaining order book, it has waved farewell to its chief operating officer.

The company said the “failure to finalise the technical contracts and secure the required banking finance and performance bonds” led to a plummet in the value of its order book. “As market conditions have worsened, it has been increasingly difficult to secure the relevant banking finance for the execution of the contracts and allow commencement of work,” the company added.

The company said ship orders worth $52.6m have been cancelled. Contracts for eight 6,700dwt bulk carriers worth $14.5m have also collapsed after languishing charter markets led the buyer to cancel before any down payments were made, the company added.

“While the board is extremely concerned about the fall in the order book and the poor state of the shipbuilding market in general, it has made progress in its discussions with its banks and should be better placed to undertake any new orders as they come in,” Dongfang said.

The significant fall out of the company’s order book resulted in the resignation of chief operating officer Sun Xiaoming.

Dongfang posted a loss of £3.7m ($5.81m) in the six months up to the end of June, greater than the £1.7m loss it recorded during the same period a year ago.

Dongfang Shipbuilding CEO Chen Tong kao said the directors expect the shipbuilding operations outlook to remain weak for at least the next six months. The directors expect that the loss in the second half of the year ending 31 December 2011 will be materially greater than the loss incurred in the first half.