KDM Shipping boosts new vessels order to six from four

KDM Shipping (KDM PW), a Ukrainian maritime shipping company, announced on Dec. 3 that it renegotiated the terms for a new order of cargo vessels placed with the China Machinery Engineering Corp. and Jingjiang Nanyang Shipbuilding Co. The renewed contract with both companies, primarily signed in May 2011 but has not been activated so far, foresees an increase in the number of ordered vessels to six from four. The price of each vessel, with a deadweight of 6,000 tons, was reduced by 37% from the previous agreement to USD 8.5 mln. Construction of the new vessels will start in 2013, with the first ship and last ship to be delivered in 15 and 27 months respectively from the start of the contract’s implementation (between 1Q14 and 2Q15 in the best case). The funding of these investments will be covered by the company’s operating cash flow and debt financing, according to KDM’s IPO prospectus. The company named Chinese Eximbank as one of the key sources for debt financing.