It terminated shipbuilding contracts with an unnamed buyer whose sole shareholder is allegedly involved in evading US sanctions, laws and regulations
[SINGAPORE] Shares of Yangzijiang Shipbuilding fell on Monday (Sep 29) after news of the Chinese vessel maker’s termination of US$180 million worth of contracts.
As at 11.58 am, the counter hit an intraday low of S$3.06, with around 31.7 million shares traded. This was 6.7 per cent or S$0.22 down from Friday’s closing price of S$3.28.
It finished the day at S$3.23, still down by 1.5 per cent or S$0.05, with around 52.8 million shares transacted. It was one of the top traded stocks on the Singapore Exchange by volume on Monday.
In a Sep 27 statement, Yangzijiang Shipbuilding said three of its subsidiaries had cancelled shipbuilding contracts worth around US$180 million with an unnamed buyer. The contracts were for four units of 50,000 deadweight tonnage medium-range oil tankers.
Jiangsu Yangzijiang Shipbuilding, Jiangsu New Yangzi Shipbuilding and Jiangsu Yangzi Xinfu Shipbuilding cancelled the contracts after having received “critical information” that the buyer’s sole shareholder was allegedly involved in a scheme to circumvent US sanctions, laws and regulations.
The allegations had only just come to light despite “earlier extensive due diligence on the buyer and its shareholder”, Yangzijiang Shipbuilding said.
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“In light of these developments and based on legal advice that they have received, the subsidiaries have determined that the buyer is in anticipatory repudiatory breach of the contracts,” the statement said.
The company said that it had not recognised any revenue or profit relating to the contracts up to Jun 30, 2025. It added that it had received a deposit of 10 per cent of the value of the deal (around US$18 million) at the time of the signing of the contract, as well as collected a 10 per cent instalment worth US$4.5 million for the building of one vessel, which had just started.
In a separate statement, Yangzijiang Shipbuilding said it had secured additional shipbuilding contracts for eight vessels, with a total contract value of US$440 million. These are scheduled for delivery between 2027 and 2029.
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The terminations and the new contracts are not expected to have a material impact on the company’s net tangible assets and earnings per share for the current financial year ending December.
