Algoma Central Corporation collects refund guarantees
Algoma Central Corporation has received payments totaling $53.4 million from refund guarantees related to the cancellation of three shipbuilding contracts. The refund of amounts paid on a fourth shipbuilding contract remains subject to arbitration.
“We are extremely pleased to announce the collection of these outstanding installment refunds,” said Peter Winkley, Vice-President and CFO of Algoma. “The collection process proceeded smoothly once the shipyard and its representatives ceased to pursue their arbitration of our cancellation of the contracts. We would like to formally thank the refund guarantee bank for their actions in closing these files.”
Algoma entered into contracts in 2010 to build eight Equinox Class dry-bulk carriers in China. Only three of the contracted vessels were completed and Algoma took steps to cancel the contracts and collect a refund of the related construction installments. In conjunction with cancelling the existing contracts, Algoma entered into new contracts with shipyards in Croatia and in China for the construction of five new full sized Equinox Class vessels, deliveries of which are expected to occur in 2018. The installments refunded in this action will be used to fund a portion of the costs for the new contracts.