Norwegians cancel newbuilding order

The Norwegian shipping company Seatankers Management Co. Ltd (SMC), owned by shipping tycoon John Fredriksen, has cancelled an order for four chemical tankers placed with the Alcock Ashdown (Gujarat) Ltd, the shipbuilding firm owned by the Gujarat government. SMC walked away from a Rs301 crore deal citing high costs in addition to tight credit lines and a deteriorating global economy.

The shipbuilder is now scouting for a new buyer for the 12,800 dwt chemical tankers on which construction has already started. “Due to some reasons Alcock Ashdown and Seatankers recently decided to mutually close the contract. We are now looking for a suitable buyer who is interested to get the vessels built on profit-sharing basis with us or on fixed-cost basis,” said an executive at the yard. Alcock Ashdown would also consider selling the partly-built ships, the executive added.

The construction on the first of the four ships was to be completed by December 2009 and the company had agreed to deliver one ship every three months after that. Seatankers Management had paid about Rs90 crore as advance for the construction of the four ships. “As per the deal, we have to pay that money back to Seatankers. So, we are in the process of finding another buyer for the ships,” said the executive. The hunt for a new buyer, however, could pose a big challenge to Alcock Ashdown in a falling market.

Alcock Ashdown is currently building 30 vessels at a cost of Rs1,200 crore including the four tankers originally ordered by Seatankers.