South Korean yard cancels French owner's boxship construction contract

South Korean shipbuilder HD Hyundai Mipo Dockyard has confirmed its cancellation of the construction contract for five new container vessels ordered by French shipping company Zephyr and Boree.

On May 19, 2023, the two parties signed a contract for the construction of the containerships, each with a capacity of about 1,300 TEUs and fitted with methanol-fuelled engines and sails. The contract has a value of approximately US$311 million.

The vessels were originally scheduled to be delivered between late 2025 and mid-2026. These were slated for operation under long-term charter with various French cargo companies.

However, recent problems in financing have forced Zephyr and Boree to request for the cancellation of its newbuilding contract with HMD. The latter then cancelled the contract and said the cancellation will not result in any losses.

Zephyr and Boree meanwhile assured that it intends to secure adequate financing by the end of the year, and that construction of the ships at HMD may still resume.