Knightsbridge Gets Burned by Capesize Charterers, Damages Sought

Knightsbridge Tankers Limited (Nasdaq:VLCCF) announced today that two of its charterers, Hong Xiang Shipping Holding Co Limited and Sanko Steamship, have canceled long term charter contracts prior to final maturity for two capesize dry bulk carriers, the Golden Zhejiang and the Battersea.

The Golden Zhejiang was on charter for a rate of $32,326 per day net, for a minimum period ending September 7, 2014 and included a two year extension option in Knightsbridge’s favour. The redelivery follows a period when Hong Xiang has not paid charterhire for the vessel when due.

Furthermore, Sanko Steamship Co., Ltd. served a notice purporting to cancel its charter party with Knightsbridge and will redeliver the capesize drybulk vessel Battersea prior to the expiration of the minimum period of the charter. The Battersea was on charter to Sanko at the rate of $39,500 per day net, for a minimum period ending on June 26, 2014.

Knightsbridge has a claim for outstanding unpaid hire from Sanko, as well as a guarantee from Hong Xiang’s parent company Beijing Jianlong Heavy Industry Group Co. Ltd., and will seek recovery of outstanding unpaid hire and damages for the remaining period of both charter contracts.

Alternative employment will be sought for both vessels following their redelivery.

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