Due to the shipowner’s breach of contract, China’s largest private shipbuilder, Yangzijiang Shipbuilding, decisively announced the termination of the shipbuilding contract.
On September 27, Yangzijiang Shipbuilding (Holdings) Ltd. (hereinafter referred to as “Yangzijiang Shipbuilding” or “the Company”) issued an Announcement on Termination of Shipbuilding Contracts, declaring the termination of an order for four MR oil tankers valued at US$180 million.
The announcement disclosed that three subsidiaries of the company—Jiangsu Yangziliang Shipbuilding Group Co., Ltd, Jiangsu New Yangzi Shipbuilding Co., Ltd, and Jiangsu Yangzi XinfuShipbuilding Co., Ltd. — have terminated contracts for the construction of four 50,000 DWT MR oil tankers with a specific buyer. The contracts, valued at approximately US$180 million, were originally scheduled for delivery between 2026 and 2027.
Yangzijiang Shipbuilding said that although its subsidiaries had previously conducted comprehensive due diligence on the buyer and its shareholders, in view of the latest key information disclosed by the buyer (which was not previously known to the subsidiaries), the subsidiaries decided to terminate the contract.
This key information alleges that the buyer’s sole shareholder was involved in a scheme to circumvent US sanctions laws and regulations. In light of this development and based on the legal advice received, its subsidiaries have determined that the buyer has committed anticipatory breach of contract. Furthermore, because the buyer’s payment obligations involved subsequent illegal conduct, the relevant contract has become impossible to perform due to force majeure. Accordingly, its subsidiaries have terminated the contract and reserve all rights to pursue legal action against the buyer.
As of June 30, 2025, Yangzijiang Shipbuilding has not recognized any revenue or profit related to the construction contracts for four 50,000 DWT MR oil tankers. Additionally, a 10% down payment totaling $18 million was received upon contract signing. Currently, only one vessel has commenced construction, and an additional milestone payment of 10% for that vessel, totaling US$4.48 million, has been received.
Analysis suggests that the owner of the four 50,000 DWT MR tankers may be Global One Energy (Gloen), a Swiss trading company headquartered in Geneva. In November 2023, this owner was reported to have signed a tanker construction contract with Yangzijiang Shipbuilding. The order quantity, value, and delivery schedule align closely with the details mentioned in Yangzijiang Shipbuilding’s announcement.