November 15, 2007
Algoma Central orders two product tankers in China
Canada's Algoma Central Corporation has entered into an agreement, through a wholly-owned subsidiary, to construct two 25,000 DWT double-hulled, IMO II, petroleum product tankers at the Nantong Mindge Heavy Industry Stock Co., Ltd. shipyard in Jiangsu, China.
Deliveries of the two vessels are scheduled for August 2010 and April 2011 at an expected cost of approximately $90 million U.S. in total.
These vessels are in addition to the acquisition of three 16,500 DWT double-hulled IMO II petroleum product tankers announced September 11, 2007.
All five of these vessels will be employed and operated as part of Hanseatic Tankers, a new venture being established with Bernhard Schulte Group, Sloman Neptun, Intrepid Shipping LLC and the Corporation.
Hanseatic Tankers plans to employ and operate eighteen 16,500 DWT and up to eight 25,000 DWT tankers. Trading areas for the ships are expected to be focused in Europe, the Mediterranean and Asia. These opportunities allow for further diversification of Algoma Central within the global shipping industry.
Algoma Central owns and manages four Canadian-flagged product tankers with delivery of an additional two tankers scheduled for the first half of 2008. The corporation also owns a foreign-flag product tanker through a wholly-owned foreign subsidiary. It is expected this foreign-flag product tanker will also be operated and employed as part of the Hanseatic Tankers commencing in late 2008.
In addition to product tankers the corporation owns 19 Canadian flagged dry-bulk vessels that operate on the Great Lakes - St. Lawrence Waterway as part of a 35 vessel fleet that is managed by Seaway Marine Transport, a partnership with an unrelated party, Upper Lakes Shipping Ltd.
On November 7, 2007, the partners announced they had entered into agreements with Chengxi Shipyard located in Jiangyin, China, to construct two maximum seaway size self-unloading forebodies and to attach these new forebodies to the aft-ends of the Algobay and Algoport. The completed vessels are expected to be in service in December 2009 and September 2010, respectively at an expected cost of approximately $125 million with the Algoma Central's share amounting to $62.5 million. This expected total cost includes cost estimates to modernize the aft-ends of both vessels and a 25% import duty currently payable on the imported forebodies.
Upon delivery in December 2009 and September 2010, these vessels will be bareboat chartered to Seaway Marine Transport.
Algoma Central owns two ocean-going self-unloaders through a wholly-owned foreign subsidiary and an interest in five ocean-going self unloaders through a joint venture. These seven vessels are part of a 28 vessel, ocean-going, self-unloader fleet that is commercially managed by a third party.
Algoma Central also owns a diversified fabrication, ship and engine repair operation and commercial real estate.