Danaos cancels three ship orders

Danaos cancels three ship orders    Danaos Corp, said it would cancel an order for three 6,500-TEU ships with Hanjin Heavy Industries & Construction Co. Ltd. to be delivered in the first half of 2012.
   The agreement was reached with the consent of Yang Ming Line who was to charter the ships. Danaos said it is building another six large containerships with Hanjin, all of which are fully funded by committed loan facilities from various commercial banks.
   Danaos said cancellation of the order for the three ships forms part of an overall plan to address “total capex funding needs.”
   The company, which owns containerships and leases them to liner companies, said in a March 29 release announcing 2009 earnings, that its “charterers continue to perform and we remain current in payments of our scheduled debt service.”
   But it noted it was “facing significant newbuilding installment payments during 2010 and 2011, for which we do not currently have finalized relevant financing. Addressing these cash requirements is a principal focus of our discussions with the banks, the yards and the export credit agencies.”
   As a result of shipping overcapacity in 2009, Danaos noted in March that “asset values were significantly reduced, interest rates were kept very low and we suffered from non-cash losses in the fair value of our interest rate swaps. Consequently we breached certain loan covenants, for which we received and continue to request temporary waivers. This waiver process has led to increases in the margin over LIBOR that we pay on our debt.”