FreeSeas' two newbuildings on order in China have been cancelled as the owner failed to make the final payment on the vessels.
Nasdaq-listed FreeSeas reveals in an SEC filing the yard ended the deal after the owner defaulted on a $3.66m sum which came due in April.
FreeSeas had been struggling to meet the final expense on the 33,000-dwt brace at Jiangsu Yangzijiang Shipbuilding after ABM Amro ripped up a loan backing the $49.88m order.
It penned the ships in August 2010 and they were due to hit the water in May.
It is understood FreeSeas and the yard remain in dialogue and there is still a chance the owner could take the vessels in if the cash can be secured.