Algoma Central Corporation Announces Favourable Outcome in Mingde Shipyard Arbitration
Feb 16, 2016
(TSX : ALC)
ST. CATHARINES, ON, Feb. 16, 2016 /CNW/ - Algoma Central Corporation ("Algoma" – www.algonet.com) announced today that the London, UK Arbitration Tribunal hearing a contract dispute involving three shipbuilding contracts between Algoma and Nantong Mingde Heavy Industries Stock Co. Ltd., has found in favour of Algoma.
"We are extremely pleased that the Tribunal has acted quickly to decide on this matter, given the bankruptcy of the shipyard", said Ken Bloch Soerensen, President and CEO of the Corporation. "We will now proceed to make a formal demand for reimbursement of our instalment payments as provided for under the terms of the contracts. The funds intended for these ships will be redirected towards investment in replacement fleet renewal contracts that we have announced in recent months."
The Company entered into contracts in 2010 to build six Equinox Class bulk freighters to replace aging ships in Algoma's domestic dry-bulk fleet. As a result of the bankruptcy of the shipyard, only two of these vessels have been delivered and the Company has cancelled the four remaining contracts. This Tribunal decision has resolved three of the outstanding claims and claims for the remaining contract are being pursued.
About Algoma Central Corporation
Algoma Central Corporation operates the largest Canadian flag fleet of dry and liquid bulk carriers on the Great Lakes - St. Lawrence Waterway, including 18 self-unloading dry-bulk carriers, seven gearless dry bulk carriers and seven product tankers. The Company has announced contracts for seven domestic dry-bulk vessels as part of its on-going fleet renewal program. Algoma also has interests in ocean dry-bulk vessels operating in international markets. Algoma provides ship management services for other ship owners and owns a diversified ship repair and steel fabricating facility active in the Great Lakes and St. Lawrence regions of Canada.
SOURCE Algoma Central Corporation