Dannebrog axes SLS newbuilding orders
Danish shipping group Dannebrog has cancelled orders for two medium-range chemical and oil tankers with South Korea"s SLS Shipbuilding due to extensive delivery delays and financial problems at the shipyard.
The 45,000 dwt chemical and oil tankers were ordered in May 2007 at a price of $51m each and were scheduled to be delivered in September 2009 and May this year.
The cancellations leave the Danish company, which owns three tankers and 15 dry bulk and general cargo carriers, with only eight multi-purpose vessels on order from the Taizhou Sanfu shipyard in China.
Dannebrog chief executive Johnny Schmoelker said the two tankers ordered from SLS ?will not be built? because of the financial difficulties at the shipyard.
?Now we do not have any more tankers on order and we do not have any newbuilding plans in the tanker sector,? he told.
Mr Schmoelker said SLS had not even laid down any steel for any of Dannebrog"s 45,000 dwt newbuildings.
The ships were ordered at the top of the market for MR product tankers at $51m each. Since then newbuilding prices have dropped by 25% to $33.5m, according to London shipbroker Clarksons.
?As far as this particular yard is concerned, there is sincere slippage of deliveries and this is quite evident in the number of cancellations and arbitrations that have been reported on the yard,? Mr Schmoelker said.
Dannebrog joins a growing list of owners to cancel orders from the shipyard that went into administration at the end of last year.
Tanker companies Glenda International Shipping, Stolt-Nielsen and Eletson have cancelled orders, which were priced at similar levels for Dannebrog"s contracts, from SLS since the middle of last year.
Other owners, including Odfjell and Eships have acquired some of these cancelled newbuilding contracts at prices closer to today"s estimated values.