Vard ends shipbuilding contract with ER Offshore

Singapore

SINGAPORE, March 16, 2015 – Norwegian offshore construction company Vard Holdings said on Friday that two affiliates of its customer, German supply vessel company ER Offshore, filed for insolvency at a court in Germany on March 12.

Vard is building one platform supply vessel for each affiliate and has already received a 10-percent instalment for one of the vessels. On March 13, Vard terminated the contracts and has no plans to repay the instalment fee, choosing instead to complete the vessels and sell them to recover any losses.

Vard issued a statement saying, “The group does not expect to repay the prepayment received, and expects to be able to sell the vessels at a price that will cover the expected construction cost less the prepayment received.”

The company does not foresee any negative effect on its earnings per share during fiscal year 2015 (January-December) as a result of the termination and proposed resale.

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