Yangzijiang Shipbuilding has cancelled orders placed by an unnamed customer for four oil tankers worth US$180 million.
Orders for these four tankers, to be delivered between 2026 and 2027, were placed by the unnamed buyer, whose shareholder was involved in a scheme to circumvent US sanctions laws and regulations.
Yangzijiang Shipbuilding says that despite "earlier extensive due diligence", it was only "just" told of "critical information" by the buyer.
Citing legal advice, Yangzijiang Shipbuilding, via three subsidiaries that received the orders, is of the view that the buyer is in anticipatory repudiatory breach of the contracts.
"Alternatively, the contracts have been frustrated as a result of the supervening illegality associated with the buyer’s payment obligations.
As such, the contracts have been terminated and all legal rights reserved against this buyer.
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Yangzijiang Shipbuilding says that no revenue or profit relating to the contracts was recognised up to June 30.
A 10% deposit of the contract value, or some US$18 million, was received at the time the contracts were signed. Construction had commenced for just one vessel, for which an additional 10% instalment, or US$4.48 million, was collected.
Late August, Yangzijiang Shipbuilding announced that it won additional shipbuilding contracts for 22 vessels worth US$920 million, since its order book update for the 1HFY2025 ended June 30.
Yangzijiang Shipbuilding shares closed at $3.28 on Sept 26, down 1.2% for the day but up 10.81% year to date.
