Thailand’s Precious Shipping has accepted a close to $4m discount on the contract price of two newbuilding 63,345 dwt bulk carriers under construction at China’s Taizhou Sanfu Ship Engineering.

The discount works out to approximately $1.98m discount on each vessel. Each of the newbuilding was originally priced at $27.48m and the discount will now price the ship at $25.5m.

Bangkok-based Precious Shipping said the bulk carriers have not been build to deliver promised fuel savings, leading to the breach of contract and specifications.

The new ships are expected to be delivered to Precious Shipping “free of any emcumbrances” on 27 October and 28 October respectively, Precious Shipping said.

The shipowner added that an addition of a new fourth instalment of $4m per ship will be paid to Sanfu prior to the new delivery dates, but this instalment will be paid using the shipyard’s extension of $4m per ship worth of unsecured corporate credit to Precious Shipping in return.

Additionally, the repayment of the unsecured corporate credit to Sanfu is conditional upon an arbitration lodged by Precious Shipping over damages claims. If no damages are awarded to Precious Shipping, the shipowner will repay Sanfu within one year, but if damages are awarded, Precious Shipping will repay Sanfu the $4m credit minus the damages assessed.