Chinese court seizes chemical tanker

A Chinese court has seized a chemical tanker being built at Jiangyan Shipbuilding after the privately-owned yard defaulted on loan repayments over the ship financing terms. The chemical tanker was seized on Wednesday afternoon following a visit by court officials to the yard in Ezhou city, Hubei province. A few years ago the shipbuilder had borrowed RMB10m ($1.6m) from an unnamed local financial institution, but defaulted on loan repayments that were due recently, according to reports. The seized vessel was worth approximately RMB67m, according to an official from the Chinese yard. The ship was built for a Greek shipowner under a 2008 twin vessel deal worth a total of RMB152m. The Greek shipowner had forked out an initial payment of RMB100m for the newbuildings but subsequently abandoned the orders due mainly to the ailing state of the global shipping market. Sources familiar with the 1967-established Chinese yard said the company is facing severely tight cash flow since last year and it had attempted to secure private loans at high interest rates.