Hyundai Merchant Marine has singed a letter of intent (LOI) with Daewoo Shipbuilding & Marine Engineering (DSME) for the construction of five 300,000 dwt very large crude carriers (VLCCs) with an option of five more vessels.

HMM has formed a ˜newbuilding examination committee' at the end of last year, and has thoroughly reviewed all the conditions for newbuilding including demand/type/number of vessels, market trend, and investment feasibility etc.

Chang-keun Yoo, CEO of HMM stated We currently operate twelve VLCCs which have been foundational to stable profits and enhancing sales competitiveness. We thought this year is the right time to order new VLCCs at historically low newbuilding price. And he added HMM's fleet competitiveness in the medium and long run will be further strengthened through the New Shipbuilding Program.

Final agreement will be concluded by the end of July, and discussion about LNG carrier engine & Eco-friendly technology will be also made

This newbuilding deal is the first case of using New Shipbuilding Program with a pot of KRW 2.6 trillion ($2.28 billion), which Korean government announced on last October to support the shipping industry.

Apart from VLCCs, HMM also plans to order small to medium sized container ships.