Eimskip further reduces purchase price of a new vessel building project

Delay of vessel delivery this year

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| Source: Eimskipafélag Íslands hf.
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In 2011, Eimskip and the shipyard Rongcheng Shenfei in China made an agreement of building two container vessels. Each vessel’s size is 875 TEU, thereof each containing plugs for 230 reefer containers. Deadweight of each vessel is approximately 12 thousand tons. The vessels are 140.7 meters long and 23.2 meters wide.

According to the amendment agreement with the shipyard from April 2013, expected delivery of the first vessel was in the first quarter of 2014. A new amendment agreement with the shipyard expects delivery of the first vessel at the second quarter of 2014, but besides the delay Eimskip has negotiated a further reduction of the first vessel’s purchase price in the amount of USD 750 thousand. Before, Eimskip had negotiated a reduction of the total purchase price of both of the vessels by USD 10 million.

There will also be a delay in the delivery of the second vessel. A new amendment agreement for the second vessel has not been made, but expected delivery is in the fourth quarter this year.

The delay of the vessels’ delivery time will neither affect these changes nor services to the company’s customers. The delay will however extend chartering of two vessels, but the new vessels are expected to replace two chartered vessels currently operated by the company.

 

Gylfi Sigfússon, President and CEO

“It is indeed unfortunate that the completion of the new vessel building project has been delayed, but fortunately the delay does not affect our services to the company’s customers. The negotiation of a reduced purchase price can be considered as the shipyard’s compensation since Eimskip has to charter vessels longer than expected.

The worldwide shipbuilding industry has been facing difficulties, among other things due to significant excess capacity of container vessels worldwide, which has resulted in vessel owners in general delaying delivery of new vessel buildings since they need additional assignments for the vessels. This has resulted in general delay in vessel delivery, including Eimskip’s new vessel building project.”

 

About Eimskip

Eimskip runs a network of 51 offices in 19 countries and operates 16 vessels. Total number of employees is around 1,390, of which about 800 are located in Iceland. About half of Eimskip’s operating revenue comes from operations outside Iceland. The company’s vision is to provide outstanding transportation services through a dependable transport system in the North Atlantic, as well as offering extensive worldwide network of reefer logistics services.