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    Havyard confirms cancellation of shipbuilding contract

    Yard News // January 5, 2017

    Havyard Ship Technology in Norway has confirmed that it has cancelled a contract for a Havyard 833 WE platform supply vessel (PSV) it was building for Fafnir Offshore. In December the company had announced that it had reached agreement with the shipowner to postpone delivery of the PSV from March 2016 to June 2017.

    In a statement, Havyard said: "The buyer has worked on several projects for long-term charters for the vessel, which is a prerequisite for obtaining long-term financing in today's market. The buyer has not succeeded in obtaining a charter or financing. On 18 October 2016 Havyard announced that the parties had agreed that the buyer would pay an additional pre-delivery instalment as a condition off postponing delivery time of the vessel until April 2019. The buyer has now failed to pay the additional pre-delivery instalment, and Havyard has therefore decided to cancel the contract. Havyard will claim compensation for its losses, and will work to obtain a sale of the vessel."

    Havyard said pre-delivery instalments are expected to cover estimated losses as of today, but eventual future losses will depend on price achieved when the vessel is eventually sold.

    Havyard stopped progress on the project on completion of the hull in the autumn of 2015 and since then the hull has been laid up at the shipyard in Leirvik i Sogn.

    Havyard said it is now free to dispose of the project and, with the pre-delivery instalments paid by the original buyer, "will be in a good position to complete or re-build the vessel."

    The cancellation will have no direct impact on liquidity, and the yard's goal is to complete delivery of the vessel by the second quarter of 2019.

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