Solstad Offshore ASA (SOFF) has today announced the cancellation of two newbuilding contracts at Karmsund Maritime Services (KMS), after the yard announced its bankruptcy earlier today.
KMS has today informed that they will submit a petition for bankruptcy. Solstad Rederi AS, a 100% owned subsidiary of SOFF, has two newbuilding contracts with KMS.
KMS has incurred significant cost overruns and considerable delays under the two projects, and informed involved banks and SOFF that they are not in a position to stand by their contractual obligations. In an attempt to find a model for finalizing the vessels, negotiations between the involved parties have taken place, however without successfully reaching an agreement regarding the distribution of the said cost overrun.
The present breach of contract and the announcement for petition for bankruptcy means that the shipbuilding contracts are no longer considered as binding agreements. SOFF will on this basis claim all deposits under the refund guarantees.
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