YZJ Shipbuilding shares fall after three subsidiaries cancel contracts worth $232m

Shares of Yangzijiang Shipbuilding fell after the company announced that three of its subsidiaries had cancelled contracts valued at US$180 million (S$232 million) with an unknown party.

- 

This was executed by the shipbuilder’s three units — Jiangsu Yangzijiang Shipbuilding Group, Jiangsu New Yangzi Shipbuilding and Jiangsu Yangzi Xinfu Shipbuilding. The deal concerned four 50,000 deadweight tonnage medium-range oil tankers scheduled for delivery from 2026 to 2027.

In a statement on Sept 27, the group explained that the termination of the contracts was due to “certain critical information” concerning allegations that the buyer’s sole shareholder was involved in a scheme to circumvent US sanctions laws and regulations.

This had just been disclosed by the buyer, hence the subsidiaries were not aware of it, despite earlier extensive due diligence on the buyer and its shareholder.

The units have since determined that the unknown buyer is in anticipatory repudiatory breach of the contracts, in the light of these developments and following the legal advice received.