Ocean Yield ASA has three newbuilding LEG (Liquefied Ethylene Gas) carriers of 36,000 cbm. capacity under construction at Sinopacific Offshore & Engineering, China ("SOE"), scheduled for 15-year "hell and high water" bareboat charters to the Hartmann Group, Germany, with 10-year sub-charters to SABIC Petrochemicals B.V.
SOE filed for receivership of the company in August 2016, following CIMC Enric's decision to withdraw from the acquisition of a majority stake in the shipyard earlier this year.
Ocean Yield has, in collaboration with Hartmann, been in negotiations with SOE in order to secure delivery of the vessels and a final agreement has now been reached.
The construction of Vessel no. 1 is going according to plan and the Vessel is expected to be delivered towards the end of October 2016 and will thereafter enter into its long term charter with Hartmann/SABIC.
For Vessel no. 2, Sumec Marine Co. Ltd., will finance and finalise the construction of the vessel at the Dayang Shipyard. The expected delivery date for Vessel no. 2 will be July 1st 2017. The bareboat charter with Hartmann and the sub-charter contract to SABIC have been amended accordingly.
For Vessel no. 3 it has been agreed, in collaboration with Hartmann/SABIC, that this vessel is cancelled. Ocean Yield has paid USD 16.2 million in pre-delivery instalments to the shipyard, which is secured by bank guarantees. These funds shall be repaid to the company with 5% interest upon cancellation of the shipbuilding contract. Funds repaid will be re-invested into new projects. The cancellation is not expected to have any material accounting effect in the fourth quarter.