YICAI | Shipbuilder China CSSC Lands Order for 10 Dual-Fuel PCTCs Worth Over USD1 Billion
(Yicai) Sept.3 -- China CSSC Holdings, the listed arm of the country's largest shipbuilder, has won a second major order in less than a week -- a contract worth more than USD1 billion to build 10 dual-fuel pure car and truck carriers.
The vessels, each capable of transporting about 8,200 vehicles and designed to use liquefied natural gas, will be built by subsidiary Guangzhou Shipyard International for a well-known shipowner, China CSSC announced late yesterday.
Deliveries are scheduled for between 2029 and 2031, with payment in US dollars, the Shanghai-based company said, without disclosing further details about the deal or the client. The agreement is governed by English law, with any disputes to be resolved through arbitration in London.
Its shares [SHA: 600150] closed up 1.2 percent at CNY34.32 (USD5.11) each, after jumping by as much as 3.3 percent earlier today. The broader Shanghai market ended little changed.
The project will capitalize on Guangzhou Shipyard's capabilities in the design and development, final assembly and construction, and quality control of large roll-on/roll-off ships, China CSSC said. The order is expected to strengthen the yard's position and brand recognition in the PCTC market and contribute positively to future earnings.
On Aug.29, China CSSC revealed that subsidiary Shanghai Waigaoqiao Shipbuilding had landed a USD2.7 billion deal to build 12 21,700 twenty-foot equivalent LNG dual-fuel container vessels for Cosco Shipping Holdings' vessel-investment arm.
In a separate announcement late yesterday, China CSSC said an ad hoc arbitration tribunal in London had rejected all claims brought by a unit of Singapore's ESSM in a long-running dispute over a jack-up drilling rig. The final ruling means Waigaoqiao Shipbuilding will not have to repay a USD18.1 million advance payment or interest on the amount.
After ESSM committed to becoming a marine drilling equipment lessee, it signed a contract for a self-elevating drilling platform with Waigaoqiao Shipbuilding in 2013. But the project's special purpose vehicle ended the deal in June 2016 and submitted an arbitration request in 2017 for Waigaoqiao Shipbuilding to return the USD18.1 million advance payment plus interest. The defendant won the initial arbitration in April 2019.
The latest ruling is expected to bring additional profit of about CNY98.9 million (USD14.7 million) this year, with the final amount subject to annual audit, China CSSC pointed out.