NORDEN saves USD 60-70 million by cancelling 4 vessels

11 Sep 2009

NORDEN has entered into agreement to cancel – without costs – the long-term chartering of 4 Post-Panamax (118,000 dwt.) newbuildings, which should have been delivered in 2010 (Q2 and Q3) and 2011 (Q1 and Q3). The contracts have been cancelled through mutual agreement with the counterparty.

Originally, the vessels were chartered on agreement in June 2008 at an average charter hire of USD 35,750 per day over a three-year period, and the average fleet cost in Dry Cargo is therefore reduced by USD 1,000 per day over a three-year period. At the current forward rates, the cancellation is estimated to have a present value for NORDEN of USD 60-70 million.

CEO Carsten Mortensen says the following about the cancellation: “On the basis of the development in the world economy, I am extremely pleased that these vessels will not be delivered. The cancellation of these vessels will further strengthen our future cash flow and the competitiveness in Post-Panamax, which is a vessel type that we are very focused on. We still have 4 owned and 4 long-term chartered Post-Panamax vessels which will be operated together with 8 other units. So we still have a significant market position. Our average cost in the Post-Panamax vessel type will be more than halved without these 4 vessels.”

NORDEN