Trader Gunvor has begun arbitration proceedings against Belgium's Exmar over a charter contract for a floating storage and regasification unit.
The row seems to centre on Exmar's 25,000-cbm S188 (built 2017), listed as laid-up by Clarksons.
Earlier this month, Exmar said the refinancing of the FSRU under a sale and leaseback deal with China's CSSC had been signed, but not executed yet pending the security documentation requiring the charterer’s signature.
Exmar said trader Gunvor, which had a 10-year charter in place for an Exmar barge-based FSRU for use in Bangladesh, had "raised some legal arguments that could lead to arbitration".
The shipowner now has confirmed that Gunvor has started arbitration "with respect to the execution of the charter for the FSRU barge".
"Exmar is confident about the outcome. Meanwhile the charter remains in full force and effect," the Belgian company added.
Bangladesh placed the deal in doubt last year when it decided to focus on larger gas projects.
The legal questions will further delay the signature of security documents and hence the drawdown under the CSSC financing before the end of September as originally planned, Exmar said earlier.
Extension secured
An extension of this period has been obtained until the end of October.
Exmar has as a result obtained from its close lending banks an extension of the $30m bridge loans that were originally due to expire on 30 September.
In 2017, Exmar completed a $200m deal to fully finance the unit with Bank of China, Sinosure and an unnamed "leading European financial institution".
The unit was being built at Wison Offshore & Marine.
Loss cut
Exmar posted a loss of $9.3m in the third quarter, against $16.4m in the same period of 2018.
Revenue grew to $95.7m from $74.9m, while year-to-date charter rates for VLGCs were up at $26,836 per day, against $11,192 the year before.
Ebit for the LPG division in the third quarter of 2019 was $4.1m, compared to $1m in 2018.
"The strength to the LPG freight markets has continued through the third quarter with VLGCs leading the way obtaining time charter returns in the spot market in excess of $1.8m per month supported by strong and increasing US exports with long-haul voyages to the Far East," the company said.
Ebit for the LNG ships was $1.2m, compared to a loss of $9.4m in the previous year.
