20-F: Saint Barth Shipping Inks $56.5 Million Deal for Chemical Tanker Construction

Saint Barth Shipping Company enters into a shipbuilding contract with Jiangsu Yangzijiang Shipbuilding Group for a 75,000 DWT product oil/chemical tanker.

Summary

• Saint Barth Shipping Company Inc. has contracted with Jiangsu Yangzijiang Shipbuilding Group Co., Ltd. and its affiliates to build one 75,000 DWT product oil/chemical tanker.
• The contract price is $56,533,000.00, excluding the cost of Buyer's Supplied Items.
• The vessel, Hull No.: YZJ2024-1624, will be identical to the Reference Vessel with Hull No.: YZJ2023-1529 and is to be registered under the flag of Marshall Islands.
• The vessel is guaranteed to have a service speed of not less than 14.5 knots and a deadweight of not less than 74,700 metric tons.
• The specific fuel oil consumption of the Main Engine in Tier II mode is guaranteed not to exceed 156.0 g/kwh (Tolerance: + 6%).
• Payment will be made in installments, with 15% due after receipt of the Refund Guarantee, and 55% due upon delivery.
• The delivery date is scheduled for on or before 31st March 2027, but not earlier than 12th January 2027 without the Buyer's prior written consent.
• The contract includes provisions for price adjustments due to delayed delivery, insufficient speed, excessive fuel consumption, and insufficient deadweight.
• The Buyer has the option to cancel the contract if the delivery is delayed more than 210 days or if the deficiency in actual speed is more than one knot below the Guaranteed Speed.
• A refund guarantee is required from the Seller's nominated Bank to cover the 1st, 2nd, 3rd, and 4th installments plus interest.
• The contract is governed by English law and disputes will be settled by arbitration in London.

Sentiment

Score: 7

Explanation: The document is a standard shipbuilding contract, which is generally neutral. The sentiment is slightly positive due to the agreement being finalized, indicating progress for both parties.

Positives

• The contract includes a warranty of quality for 12 months following delivery.
• The buyer has the right to have full access and be copied in the relevant technical correspondence and to attend meetings between the seller and the Classification Society if the buyer so requires.

Negatives

• The buyer may incur additional costs if there are compulsory changes in rules and regulations after the contract signing.
• The buyer is responsible for the cost of delays caused by the late delivery of Buyer Supplied Items.

Risks

• The contract price is subject to adjustments based on performance metrics, creating financial risk.
• Delays in delivery can lead to reductions in the contract price.
• The buyer bears the risk of delays in obtaining visas for their supervisors.
• The buyer may face additional costs if there are compulsory changes in rules and regulations after the contract signing.
• The buyer is responsible for the cost of delays caused by the late delivery of Buyer Supplied Items.
• The buyer is responsible for the cost of delays caused by the buyer's representatives not being acceptable to the seller in accordance with the rules, regulations and/or Laws of the Peoples Republic of China.

Future Outlook

The document outlines the terms for the construction and delivery of a vessel in the future, with specific dates and conditions.

Management Comments

• JYS, JNYS and JYXS are severally and jointly liable under this CONTRACT. Any failure of any of them shall be deemed as if this failure is made by the SELLER.

Industry Context

This announcement reflects ongoing activity in the shipbuilding industry, particularly in China, where many vessels are constructed for international shipping companies. The contract terms are typical for shipbuilding agreements, addressing key performance indicators and potential liabilities.

Comparison to Industry Standards

• The guaranteed speed and fuel consumption are typical metrics used in shipbuilding contracts to ensure vessel performance.
• The liquidated damages for delayed delivery are a standard provision to protect the buyer.
• The use of Lloyds Register of Shipping as the Classification Society is common in the maritime industry.
• Comparable companies like Hyundai Heavy Industries and Daewoo Shipbuilding & Marine Engineering also engage in similar shipbuilding contracts with detailed specifications and performance guarantees.

Stakeholder Impact

• Shareholders: The contract represents a capital investment and potential future revenue stream.
• Employees: The contract supports employment at the shipbuilding company.
• Customers: The new vessel will provide additional capacity for transporting product oil and chemicals.
• Suppliers: The contract will generate demand for materials and equipment from suppliers.
• Creditors: The contract may impact the company's financial leverage and creditworthiness.

Next Steps

• The seller needs to deliver the Refund Guarantee to the buyer within 90 days.
• The seller will proceed with the design and construction of the vessel.
• The buyer will make installment payments according to the agreed schedule.
• The buyer will monitor the construction progress and conduct inspections.
• The seller will conduct trials and deliver the vessel to the buyer upon completion.

Key Dates

Keywords

shipbuilding, tanker, contract, delivery, vessel, buyer, seller, price, guarantee, yzj