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Vard Holdings terminates 2 contracts linked to insolvent customers

Shipbuilder Vard Holdings on Saturday said two affiliates of a customer E.R. Offshore have filed for insolvency at a local court in Germany.

Consequently, on March 13, it terminated two shipbuilding contracts for one platform supply vessel, or PSV, per affiliate, the company said. Vard was first notified of the insolvency case on March 12. It has received a 10 per cent instalment for one of the vessels.

"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," it said.

The impact of the termination and the proposed resale is expected not to have a material effect on the earnings per share of the group for the financial year ending Dec 31, 2015.