Norwegian shipbuilder Havyard has cancelled a platform supply vessel delivery deal it had with Iceland’s Fafnir Offshore.
To remind, more than a year ago, December 2, 2015, Havyard made a deal with the buyer of hull no. 126, a Havyard 833 WE platform supply vessel, for postponement of the delivery time of the vessel from March 2016 to June 2017.
The buyer, Havyard said, has worked on several projects for long-term charter of the vessel, which is a prerequisite for obtaining long-term financing in today’s market.
The buyer has not succeeded in obtaining such long-term charter or financing, and on October 18, 2016 Havyard announced that the parties had agreed that the buyer was going to pay an additional pre-delivery installment as a condition for a postponement of the delivery time of the vessel until April 2019.
While Havyard did not identify the buyer in its statement on Tuesday, the newbuild’s number and the data found on the company’s website show that Havyard was building the vessel, of the Havyard 833 WE ICE design, with hybrid battery power for Fafnir Offshore, a company based in Iceland.
“The buyer has now failed to pay the additional pre-delivery installment, and Havyard has therefore decided to cancel the shipbuilding contract. Havyard will claim compensation for its losses and will work to obtain a substitute sale of the vessel. The cancellation will not result in net result consequences for the financial year 2016/17,” Havyard said on Tuesday.
Paid pre-delivery installments are expected to cover estimated losses as of today, but eventual future losses will be dependent on the contract price of the project by a substitute sale, the shipbuilder said on Tuesday.
Havyard stopped all progress on the project on completion of the hull in autumn 2015 and since then the hull has been laid up at the shipyard in Leirvik i Sogn after agreement on compensation from the buyer.
“Havyard will now be free to dispose the project and with the pre-delivery installments paid by the original buyer, Havyard will be in a good position for completion or reconstruction of the vessel for new purposes. The cancellation will have no direct impact on liquidity, and the goal is a completion and delivery of the vessel within Q2 2019,” the company said.
Offshore Energy Today Staff