Greece-based drybulk and container carrier vessels operator Euroseas has cancelled its order for an Ultramax drybulk vessel, which is currently being built at Dayang yard in China, because of extensive construction delays.
The vessel was originally scheduled for delivery at the end of last month.
Euroseas has also insisted on the return of its progress payments and other expenses, as mentioned in the newbuild contract and secured-by-refund guaranties.
Both parties have referred the matter to the concerned arbitration authorities.
In June, Euroseas cancelled another newbuild deal for a similar Ultramax vessel with Dayang yard, citing similar reasons.
Euroseas chairman and CEO Aristides Pittas said: "After the cancellation of our newbuilding programme with the Dayang yard, we are looking forward to receiving our progress shipbuilding payments of about $18m for the two Ultramax vessels which we demanded and expect to be refunded.
"Additionally, the optionality we introduced in our remaining newbuilding contract for a Kamsarmax vessel allows us to be in full control of our capital expenditures.
“The above newbuilding developments along with a debt refinancing and several loan restructurings that we have completed or agreed and are in the process of completing during 2016 will permit us to use a significant part of the newbuilding contract payments to be refunded for investments in other vessels as part of our continuing effort to take advantage of market opportunities, especially, in the current depressed market environment."
Earlier, the company signed a deal for its additional shipbuilding contract with China’s Jiangsu New Yangzijiang shipyard, for the construction of a Kamsarmax vessel.
The vessel is scheduled to be delivered during the first quarter of 2018.
Euroseas has now until 31 December to decide whether to build the vessel; build a vessel of a different type; credit the payment already made as part of the original contract, valued at $2.7m; or to acquire a different vessel from the yard at a mutually agreed price.
The company will also decide on whether to cancel the shipbuilding contract without any additional cost.