Boa PSV AS, a 100 % owned subsidiary in the Boa Offshore group, has now cancelled the shipbuilding contracts for two multi-purpose support vessels (MPSVs) with Nantong Mingde Heavy Industry in China.
The company said that cancellation notice further claims repayment of all advance payments, including interest according to the contracts.
Furthermore, refund guarantees from the yard’s banks are in place and will be called upon if the yard does not pay within 30 business days.
According to Boa, following cancellation of yard contracts, the loan facilities with the China Development Bank Corporation is also terminated and will be repaid by funds already in escrow.
The company previously warned that this might happen. Namely, in its annual report for 2014, Boa reported that the Chinese yard has over a period of time, had financial problems and there had not been any progress in the building process of certain two newbuilds. According to Boa’s report, at the end of 2014 the Chinese yard started debt settlement negotiations with their creditors and had confirmed that despite the debt settlement negotiations, it would complete the building process for the vessels.
According to its annual report, Boa had started a legal process to look into the company’s rights to cancel the contracts according to the British regulations they are subjected to.
In addition, Boa said that it had completed payments to the shipyard on other projects in previous years. The company added that it is believed that those payments were intact and it would therefore not be necessary for further impairment of newbuilding projects.