Algoma Central Corporation Announces Collection of Refund Guarantee
Sep 01, 2016
(TSX : ALC)
ST. CATHARINES, ON (September 1, 2016) — Algoma Central Corporation (“Algoma” – www.algonet.com) is pleased to announce that it has collected US$29.1 million being the final refund guarantee related to the cancellation of the four shipbuilding contracts with Nantong Mingde Heavy Industries Co. Ltd.
“The collection of this final refund guarantee brings to an end the extended process related to the cancellation of the four Mingde shipbuilding contracts”, said Peter Winkley, Vice-President, Finance and CFO of Algoma. “These funds, along with amounts previously collected, will be invested in active shipbuilding contracts now underway in Croatia and China,” Mr. Winkley continued.
Algoma entered into contracts in 2010 to build six Equinox Class dry-bulk carriers in China. Only two of the contracted vessels were completed. Algoma took steps to cancel the contracts and has now collected full refunds of the related construction instalments plus interest.
Algoma entered into new contracts with shipyards in Croatia and in China for the construction of five new full sized Equinox Class vessels, deliveries of which are expected to occur in 2018. The instalments refunded in this action will be used to fund a portion of the costs for the new contracts.
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 self-unloading dry-bulk carriers, gearless dry bulk carriers and product tankers. The Company has announced contracts for new Equinox Class domestic dry-bulk vessels as part of its on-going fleet renewal program. Algoma also owns 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. In 2016, Algoma announced a new strategic initiative to grow into attractive global niche markets, beginning with a fifty percent interest in a pneumatic cement carrier business.
For further information please contact:
Ken Bloch Soerensen
President and CEO
Peter D. Winkley, CPA, CA
Vice President, Finance and CFO