Pioneer Marine Inc. Announces Cancellation of Five Newbuildings

By Vessels

Pioneer Marine Inc., a leading shipowner and global drybulk handysize transportation service provider, announced the following developments regarding its newbuilding program:

  • Termination of five (5) newbuilding contracts for Green Dolphin 38,400 dwt Handysize vessels following mutual agreement with Yangzhou Guoyu Shipyard. The instalments paid in relation with these contracts including interest will be paid back by the refund guarantor.
  • Delays in the current delivery schedule with one (1) vessel now scheduled to be delivered in Q3 2016 and the last vessel in the newbuilding program to be delivered in Q1 2017.

Pioneer Marine Inc. Announces Cancellation of Five Newbuildings

The Company's CEO, Pankaj Khanna, further elaborated by stating, "The unprecedented downturn in drybulk freight rates has prompted us to cancel another five of our newbuilding contracts at Guoyu Shipyard. This cancellation was achieved amicably through mutual consent in a negotiated settlement with the shipyard. The cancellation frees up $30 million in cash immediately, to add to our existing cash balance of $57 million as of the end of February 2016. In addition we have $24 million in pre-paid instalments for the last two newbuildings. To put it simply we have $111 million of cash with two newbuildings to be delivered in the next ten months.

"We have proactively created a long runway for the company even assuming todays very low freight rates, reduced our capital expenditure commitments and have worked in the last few months to trim our costs significantly. Post the cancellation we now have 15 vessels on the water and only two newbuildings, which have been financed with 60% debt with Sinosure cover. Pioneer is now in a strong position to take advantage of the distress in the drybulk market either from direct asset purchases, bank deals or an M&A transaction."

The Company also announced the resignation of Erol Sarikaya, one of Garrison Investment Group's representatives on the Pioneer Board of Directors. Mr. Sarikaya is leaving Garrison to pursue other shipping related interests. Mr. Gregg Chiota, the Head of the Financial Assets Group within Garrison, will be replacing Erol on the Board.

"We thank Mr. Sarikaya for his energy and contribution to the Company's development for the last two and a half years and wish him well in his next venture," Khanna added.

Pioneer Marine Inc. is a leading shipowner and global drybulk handysize transportation service provider. Pioneer Marine owns fourteen Handysize and one Handymax drybulk carriers with an additional 2 Handysize newbuildings on order for delivery through 2016 and 2017. The Handysize Green Dolphins newbuildings are 'Eco' vessels.

Source: Pioneer Marine