Cosco has announced three more delays

Cosco has announced three more delays to its bulk carriers on order. It has agreed with the ship owner to reschedule the delivery dates of three 57,000 dwt bulk carriers, which were contracted in June 2007. The delivery dates for the three vessels will now take place between six and eight months after their original delivery dates, the last of which will now take place by May 2010 instead of September 2009.

These re-schedulings follow the previously disclosed cancellation of 4 bulk carriers and rescheduling of another 21. This latest delay is in line with our expectation that the challenging market environment will cause more order cancellations and/or customer requests for delivery delay. We have built these into our assumptions. Our SOTP fair value of Cosco stands at S$1.35, but despite the implied 31% upside, we are maintaining Hold recommendation, with even more delays being announced and provisioning.

Sponsored Links