Oslo-listed shipowner and dry bulk transporter Pioneer Marine has cancelled newbuilding contracts for five Green Dolphin 38,400dwt Handysize bulkers following a mutual agreement with Chinese Yangzhou Guoyu Shipyard.

The company opted for the move due to an "unprecedented downturn in drybulk freight rates" and added that the instalments paid in relation with these contracts including interest will be repaid by the refund guarantor.

"The cancellation frees up USD 30 million in cash immediately, to add to our existing cash balance of USD 57 million as of the end of February 2016. In addition we have USD 24 million in pre-paid instalments for the last two newbuildings. To put it simply we have USD 111 million of cash with two newbuildings to be delivered in the next ten months," said Pioneer Marine's CEO Pankaj Khanna.

Khanna added that after this cancellation, the company has 15 vessels on the water and only two newbuildings, which have been financed with 60% debt with Sinosure cover.