SINGAPORE (June 28): Vard Holdings says it has agreed to terminate a shipbuilding contract with Norwegian shipping company REM Offshore ASA in return for a compensation.
It was previously reported that Vard had won the contract, valued at about $168 million, from REM Offshore in June 2014.
In a Tuesday press release, Vard states that the agreement to terminate is “part of a restructuring plan agreed in principle between REM and its bank lenders, major bondholders and main stakeholders”.
As part of the compensation, Vard is due to receive shares equal to about 4% of the total issued shares in REM Offshore after the restructuring. Effectiveness of the termination is contingent on the restructuring plan being approved.
The contract was for the design and construction of one offshore construction and anchor handling vessel.
Delivery of the vessel was originally scheduled for 1Q16 as announced in 2014, but was postponed until 1Q18. To this date, the vessel is “in an early stage of construction”, according to Vard Holdings.
The financial impact of the contract termination is still being evaluated.
Vard says it will announce the unaudited results for the second quarter ending 30 June 2016.
Shares of Vard last traded at 16 cents.