Cash-strapped Taizhou Kouan Shipbuilding has failed to deliver a 82,000-dwt bulker to Tomini Shipping, and is now having to renegotiate its price.
A shipbuilding player said Jiangsu-based Taizhou Kouan had completed the sea trial of Tomini’s 82,000-dwt kamsarmax — to be named Tomini Nobility — early last month and was due to deliver it to the Dubai-based shipowner.
However, Taizhou Kouan failed due to the impact of the pandemic and cash-flow problems that have stalled production at the yard in recent months.
Three ships ordered
The Tomini Nobility is one of three kamsarmax bulkers Tomini booked in 2017 at a reported price of $24m each. Taizhou Kouan was originally scheduled to deliver the vessels from early this year.
Telephone calls to Taizhou Kouan went unanswered.
Several shipbuilding players said Tomini had terminated the newbuilding contract due to the delivery delay.
The sources added that the shipowner is now looking to buy the completed bulker from the yard at a “better price”.
“In a way it [Tomini] is looking to renegotiate the price of the kamsarmax with Kouan,” a shipbuilding broker said. “As for the other two vessels, they are far from completion.”
VesselsValue lists the market price of the Tomini Nobility at $18.45m, which some shipbuilding players believe is low.
"Taizhou Kouan builds quality ships and we think the kamsarmax bulker can fetch around $23m," a shipbuilding broker said.
In an email, Tomini did not confirm if it had terminated the contract with Taizhou Kouan, but stated that it is “currently in discussions with the yard, trying to find a workable solution”.
Looking at options
Asked if it would be replacing the three vessels at Taizhou Kouan with secondhand ships or through booking newbuildings, Tomini replied that “it is always looking to add ships to its fleet at the right price [and if] valuations are attractive, and we are looking at options”.
Shipbuilding players said there has been little activity at Taizhou Kouan in recent months. They added that the privately owned yard had run into acute cash flow problems last summer due to weak demand for newbuildings and poor down-payment terms on the projects that it secured a few years ago.
VesselsValue lists Taizhou Kouan with an order backlog of 15 newbuildings, including Tomini’s vessels.
TradeWinds is told that all the newbuildings at Taizhou Kouan have refund guarantees issued by local banks. As a result, some lenders are trying to get neighbouring yards to complete the vessels.
Unknown buyer
Singapore-listed Yangzijiang Shipbuildingis said to have been roped in to construct two 9,200-dwt chemical tankers that were ordered by France’s Rubis Group and a pair of 82,000-dwt bulker newbuildings for an unnamed company.
Taizhou Kouan has two shipbuilding bases — one in Kouan and the other in Yongan. The former was built in 2008, while the latter was set up during the 1970s and is only building ship blocks.
The Kouan yard — formerly Taizhou Catic Shipbuilding — was previously co-owned with AVIC International Maritime. But in 2015, AVIC sold the 45% stake it held in Taizhou Catic to Taizhou Kouan, leaving the latter as the major shareholder.
