Norwegian ship technology company, Havyard Group, and an unnamed buyer have agreed to cancel a shipbuilding contract due to a challenging offshore market.
Havyard signed a contract to design and construct a subsea vessel with an international shipping company in July 2015. The contract was valued at approximately NOK 700 million.
In October 2015, the Norwegian company informed the vessel delivery had been postponed from the second quarter of 2017 to the second quarter of 2018. At the time, the duo also agreed that the buyer has the right to cancel the contract in March 2016.
In light of the continuing challenges in the offshore market internationally, Havyard Ship Technology and the buyer on Wednesday signed an agreement for cancellation of the shipbuilding contract, Havyard informed in its Oslo Stock Exchange filing.
The agreement involves payment of a compensation to Havyard. Since the vessel was planned for delivery in the 2Q 2018, it will therefore have no affect for liquidity and profits in Havyard Ship Technology for the financial year 2016.
The cancellation will however lead to a lower activity and a smaller margin loss in Havyard Design & Solutions for 2016, said the company.
The vessel would serve for IMR (Inspection Maintenance and Repair) and light construction work on subsea installations.
Offshore Energy Today Staff