Gulf Navigation gets $35m from SLS

Gulf Navigation yesterday said it has received its full repayment for one of its cancelled orders and has issued notice for cancellation of another contract.

The company said it has received $35million (Dh120m) from SLS Shipbuilding and has demanded repayment of another $29.4m for the second vessel.

Emirates Business had reported in March about Gulf Navigation's plans to cancel contracts for two vessels. The contract was cancelled due to excessive delays in delivery of the vessel. "The two chemical carriers were originally due for delivery last year," Per Wistoft, CEO of Gulf Navigation Holding, had said. "The company has also earmarked $100m to buy new ships," he said earlier.

In a statement, the company said: "Gulf Mishref Shipping Inc, a wholly owned subsidiary of Gulf Navigation Holding, has now received its full payment along with interest from SLS Shipbuilding of Tongyeong, Korea, in respect to its cancellation and termination of the new building contract relating to the 44,000 DWT product/chemical tanker vessel bearing hull number S488."

In addition, Gulf Mizhar Shipping (Gulf Mizhar), another wholly owned subsidiary of Gulf Navigation Holding, has now given notice to SLS Shipbuilding of its cancellation and termination of the new building contract relating to the other 44,000 DWT product/chemical tanker vessel bearing hull no S489. The notice has also been given as a result of excessive delays in delivery of the vessel.

In accordance with the contract, which was duly executed on March 20, 2006 and novated to Gulf Mizhar on April 6, 2007, Gulf Mizhar has demanded SLS refund all instalments paid to date in relation to hull no S489, which amount to $29.4m plus accrued interest.

Refund of the instalments due to Gulf Mizhar has been guaranteed by The Korea Development Bank, who agreed to refund the instalments in due course.

The refund of the interest bearing instalments will have a significant positive effect on the company's result, and strengthen its balance sheet. The Dubai-based company has 11 specialised subsidiaries and owns 15 tankers including new buildings and charters VLCC, Suezmax, chemical and product tankers in addition to four crew boats and has a total carrying capacity of approximately 1.3 million DWT.

The chemical tankers are continuing with 15-year time charter to Sabic, while the VLCC is currently on a time charter to a Swiss oil trader. The Suez charters are being operated in a pool with other Suez maxes run by OSG Ship Holding in New York.