(TSX : ALC)
ST. CATHARINES, ON, March 31, 2016 /CNW/ - Algoma Central Corporation ("Algoma" – www.algonet.com) is pleased to announce that it has received payments totalling US$53.4 million from refund guarantees related to the cancellation of three shipbuilding contracts. The refund of amounts paid on a fourth shipbuilding contract remains subject to arbitration.
"We are extremely pleased to announce the collection of these outstanding instalment refunds", said Peter Winkley, Vice-President and CFO of Algoma. "The collection process proceeded smoothly once the shipyard and its representatives ceased to pursue their arbitration of our cancellation of the contracts. We would like to formally thank the refund guarantee bank for their actions in closing these files."
Algoma entered into contracts in 2010 to build eight Equinox Class dry-bulk carriers in China. Only three of the contracted vessels were completed and Algoma took steps to cancel the contracts and collect a refund of the related construction instalments. In conjunction with cancelling the existing contracts, Algoma entered into new contracts with shipyards in Croatia and in China for the construction of five new full sized Equinox Class vessels, deliveries of which are expected to occur in 2018. The instalments refunded in this action will be used to fund a portion of the costs for the new contracts.
About Algoma Central Corporation
Algoma Central Corporation operates the largest Canadian flag fleet of dry and liquid bulk carriers on the Great Lakes - St. Lawrence Waterway, including 13 self-unloading dry-bulk carriers, seven gearless dry bulk carriers and seven product tankers. The Company has announced contracts for seven new Equinox Class domestic dry-bulk vessels as part of its on-going fleet renewal program. Algoma also owns four ocean dry-bulk vessels operating in international markets and has a 50% in three other oceans dry-bulk vessels. Algoma provides ship management services for other ship owners and owns a diversified ship repair and steel fabricating facility active in the Great Lakes and St. Lawrence regions of Canada. In 2016, Algoma announced a new strategic initiative to grow into attractive global niche markets, beginning with a fifty percent interest in a pneumatic cement carrier business.
SOURCE Algoma Central Corporation
For further information: Ken Bloch Soerensen, President and CEO, 905-687-7885; Peter D. Winkley, CPA, CA, Vice President, Finance and CFO, 905-687-7897