Seatrium shares plunge up to 7.8% on US$475 million Maersk Offshore Wind contract termination

[SINGAPORE] Shares of Seatrium plunged as much as 7.8 per cent on Friday (Oct 10) morning after the company announced the termination of a US$475 million contract for a nearly completed wind turbine installation vessel.

The counter dropped S$0.19 to S$2.25 as at 9.39 am, before inching up and closing at S$2.28, 6.6 per cent down, with 57.2 million shares having changed hands.

The contract was inked with a Maersk Offshore Wind affiliate in 2022 for the construction of a wind turbine installation vessel at the US offshore wind farm, Empire Wind 1. The vessel is about 98.9 per cent complete.

In a bourse filing, Seatrium said that it is evaluating its legal and commercial responses for “wrongful termination” and is exploring “viable solutions”, including with the end-customer, Empire Offshore Wind.

Citi analyst Luis Hilado said: “We believe the development is likely to have a negative near-term impact on the share price.”