Thursday, November 06, 2008
Golden Ocean mulls newbuilding cancellations
Michelle Wiese Bockmann - Wednesday 5 November 2008
The Mystic, delivered this year by Daehan
GOLDEN Ocean Group said today that it was considering newbuilding cancellations, as analysts raised fears that the deteriorating dry bulk outlook could bankrupt vulnerable Asian shipyards.
“We are not planning to cancel anything as of today but this is something that we are considering as we go. But nothing is decided on that front,” Golden Ocean’s chief financial officer Geir Karlsen told Lloyd’s List.
Golden Ocean is one of the world’s largest listed dry bulk shipping companies, with Norwegian shipping magnate John Fredriksen owning nearly 30%.
It has seven capesize, eight panamax and 10 kamsarmax vessels on order at shipyards in South Korea, India and China, according to its website.
But last week Golden Ocean’s planned resale of six panamaxes ordered at an Indian yard fell through when the buyer, New York-listed Britannia Bulk, filed for bankruptcy.
Mr Karlsen said Golden Ocean had time charters attached to six of the 10 kamsarmaxes it had ordered.
They were all to be constructed at the privately-owned Zhoushan Jinhaiwan Shipyard, an affliate of China’s Shanghai Zhouji Group.
Asked if it was reasonable to assume that any Golden Ocean Group newbuildings without time charters would be cancelled, Mr Karlsen said: “Nothing is decided on all of these newbuildings. As for today, we are sticking with the contracts.”
Golden Ocean’s managing director Herman Billung is currently in Shanghai on business.
Cascading newbuilding and resale cancellations have now triggered fears that some yards in Asia will struggle to survive.
On Tuesday, New York-listed Genco Shipping & Trading cancelled agreements to buy six bulk carrier newbuildings from companies controlled by Turkish company Aktif Denizcilik.
The vessels were among eight Aktif Denizcilik has on order at South Korea’s Daehan Shipyard.
Today executives from Aktif Denizcilik were flying from Turkey to New York and unavailable to comment.
“Although we are uncertain about Aktif’s financial situation, we do not disregard the possibility that financing issues could now become a problem,” DnB NOR Markets analyst Henrik With said in a research note issued today.
“If such financial difficulties arise, this could push the Daehan shipyard into more severe problems, due to working capital requirements.”
Newbuilding resales have been hit by plummeting charter rates for dry bulk carriers and the global credit crunch, which has paralysed the sale and purchase market. Secondhand values have plunged since rates began to fall sharply in September and October as seaborne shipments of iron ore and coal stalled.
An improving panamax spot market saw the Baltic Dry Index today gain 11 points to hit 826. That compares to nearly 3,000 points a month ago, and the record 11,793 points set on May 20, when Chinese demand for iron ore pushed charter rates for bulk carriers to their highest level.
As adapted from Lloyds List
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