Israeli container shipping line, ZIM, said Tuesday that it has reached an agreement with Samsung Heavy Industries of South Korea to cancel five newbuildings with options to cancel even more.
In a statement, ZIM said the agreement relieves the company from obligations amounting to $1.4 billion and that ZIM will be refunded for advance payments $30 million.
In addition to the five cancelled orders, ZIM says the deal with Samsung also includes the postponement of delivery of other vessels to 2016, and an option to cancel an additional 4 orders, pending shipyards approval.
The company is expected to state a loss of $133 million in Q4 2012 as a result of the cancellations, ZIM added.
The statement, posted to the company’s website, is headlined as a “significant achievement” for ZIM.
For Samsung, the cancellations amount to $850 million, according to a regulatory filing on Tuesday. The five vessels were originally ordered in 2007 as part of an eight-ship order, the filing added.