One of Greece’s most high-profile shipowners has threatened to seize ships belonging to China’s biggest shipping company, after it halted payments on high-priced charter contracts, ft.com reports.
George Economou told the Financial Times that Cosco’s stance over contracts struck during the 2008 shipping boom might reflect a failure to understand the importance of honouring past deals. Cosco, the world’s largest operator of “dry bulk” ships that carry iron ore, coal and other commodities, has become a major international player only in the past decade.
“We’re bending over backwards, telling them, ‘Take your time to try to decide how you find the money’, ” Mr Economou said. “Failing a constructive conclusion, the only course of action is to get security for any money. The only way to do that is worldwide ship arrests [seizures].” Although he has already had one Cosco vessel put under court control and prevented from leaving port in Louisiana, he said that he wanted to resolve the standoff amicably.
Cosco did not respond to a request for comment. It has previously said it is withholding some payments under a “cost-reduction programme” to maximise value for shareholders.
Mr Economou said that he had the industry’s greatest exposure to Cosco’s tactics, with “17 or 18” ships on charter to the Chinese group. Two-thirds belong to DryShips, the Nasdaq-listed group he founded, and the remainder to his private companies. He put the value of his companies’ deals with Cosco at $500m (£303m), but declined to say how much had been withheld.
Cosco months ago started withholding all or part of payments on long-term deals struck at the top of the sector’s boom. Mr Economou said that typical rates for the largest Capesize vessels were $80,000 a day for five years. Capesize rates on Tuesday were only $18,000 a day in the short-term spot market.
George Economou told the Financial Times that Cosco’s stance over contracts struck during the 2008 shipping boom might reflect a failure to understand the importance of honouring past deals. Cosco, the world’s largest operator of “dry bulk” ships that carry iron ore, coal and other commodities, has become a major international player only in the past decade.
“We’re bending over backwards, telling them, ‘Take your time to try to decide how you find the money’, ” Mr Economou said. “Failing a constructive conclusion, the only course of action is to get security for any money. The only way to do that is worldwide ship arrests [seizures].” Although he has already had one Cosco vessel put under court control and prevented from leaving port in Louisiana, he said that he wanted to resolve the standoff amicably.
Cosco did not respond to a request for comment. It has previously said it is withholding some payments under a “cost-reduction programme” to maximise value for shareholders.
Mr Economou said that he had the industry’s greatest exposure to Cosco’s tactics, with “17 or 18” ships on charter to the Chinese group. Two-thirds belong to DryShips, the Nasdaq-listed group he founded, and the remainder to his private companies. He put the value of his companies’ deals with Cosco at $500m (£303m), but declined to say how much had been withheld.
Cosco months ago started withholding all or part of payments on long-term deals struck at the top of the sector’s boom. Mr Economou said that typical rates for the largest Capesize vessels were $80,000 a day for five years. Capesize rates on Tuesday were only $18,000 a day in the short-term spot market.