International Fleet Renewal at Algoma

m/v Alice Oldendorff heading for National Gypsum

Algoma today announced the signing of a agreement to acquire the interest held by Oldendorff Carriers in the CSL International Pool including the three vessels owned by Oldendorff operating in the Pool. As a result of the transaction, Algoma’s interest in the Pool will increase to approximately 40%.

The Pool consists of 18 self-unloading vessels ranging from handy-sized to panamax and provides shipping services along the coasts of the Americas and in the Caribbean. Pool vessels frequently carry gypsum from Halifax to the US. Algoma currently owns five vessels operating in the Pool. As a result of this transaction, Algoma will acquire the handy-sized m/v Alice Oldendorff, and the m/v Harmen Oldendorff and the m/v Sophie Oldendorff, both of which are panamax vessels, for US$100 million. The deal is expected to close late in the second quarter of 2019. 

On the 17th Algoma stated they expect to fund the transaction principally from the proceeds of the refund guarantees from the cancellation of four Croatian shipbuilding contracts. the next Day they announced they had received a full refund of all installment payments made in connection with the now-cancelled shipbuilding contracts with Uljanik d.d. and 3Maj Shipyard of Croatia.

Algoma entered into five shipbuilding contracts with 3Maj Shipyard, an operating unit of Uljanik d.d of Croatia. After considerable delay, the first of the five vessels was delivered in 2018; however, Algoma cancelled the remaining four contracts as the shipyard’s financial difficulties led to the shipyard being unable to put forward a plan that would lead to completion of the remaining hulls. Demands for installment refunds were made in December 2018 and the banks have now remitted a total of CAD$115 million in full settlement of the claims.

Algoma also extended the expiry dates on three existing option contracts held with Yangzijiang Shipyard in China (YZJ) until later in 2019. These options to build Equinox Class self-unloaders or gearless bulkers at attractive prices, were to expire at the end of December.

Algoma contracted for the building of two Equinox Class seawaymax self-unloaders by YZJ in 2015 and subsequently enlisted the support of the shipyard to complete two of the partially built Nantong Mingde hulls, which Algoma acquired from that bankrupt shipyard. Three of the four ships have been delivered. The final Nantong Mingde hull, the Algoma Conveyor, is scheduled for delivery in February and is expected to be in service for the 2019 navigation season.

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