GulfMark Offshore announced today that a shipyard contracted to construct three vessels for the Company is in default of the contract.
Construction of the vessels is no longer in progress. The vessels were previously projected to be delivered to the U.S. market in the first half of 2010. The Company will record an impairment charge against its construction-in-progress of $46.2 million ($29.2 million after tax, or $1.16 earnings per diluted share) in the first quarter of 2009 related to these three vessels.
While the Company intends to pursue all contractual and legal remedies available to recover its investment, due to the uncertainty of recovery, the Company is taking an impairment charge for the full amount of its investment in these vessels. Other than costs to pursue any such remedies, which the Company does not expect will be material, this non-cash charge should not result in future cash expenditures.
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