Yangzijiang Shipbuilding terminates US$180M MR tanker contracts over US sanctions allegations

The shipbuilder disclosed via the Singapore stock exchange that its subsidiaries terminated the contracts upon receiving critical new information that had not surfaced during earlier due diligence on the buyer and its shareholder.

The four contracts, valued at a combined US$180M, covered 50,000-dwt tankers scheduled for delivery through 2027.

“In light of these developments, and based on legal advice they have received, the subsidiaries have determined that the buyer is in anticipatory repudiatory breach of the contracts,” Yangzijiang said. The company added that the agreements had been frustrated by supervening illegality tied to the buyer’s payment obligations.

“Accordingly, the contracts have been terminated, and the subsidiaries have reserved all of their legal rights against the buyer,” the statement continued.

Financially, Yangzijiang said no revenue or profit had been recognised from the contracts up to 30 June 2025. The company received a 10% deposit (US$18M) at signing, and for one vessel where construction had begun, an additional 10% instalment (US$4.48M) was collected.

Yangzijiang does not expect the terminations to materially affect its net tangible assets or earnings per share for the current financial year ending 31 December 2025.

Influx of new orders

Despite the cancellations, Yangzijiang announced last week that it had secured fresh contracts for eight vessels worth US$440M in total. These include four container ships and four bulk carriers.

Among the buyers is Seaspan Corporation, which has ordered two 11,800-TEU container vessels. All newly contracted ships are scheduled for delivery between 2027 and 2029.

In total, Yangzijiang has secured 44 effective contracts so far this year, with a combined value of US$1.9Bn.

As of early September, the company’s orderbook stood at 258 vessels: 125 container ships, 64 tankers, 41 bulk carriers, and 28 LNG/LPG carriers.