Solstad cancels newbuilds after KMS files for bankruptcy

Solstad Offshore has confirmed that it has cancelled two newbuilding contracts at Karmsund Maritime Service (KMS), after the yard announced its bankruptcy. Solstad Rederi AS, a 100 per cent owned subsidiary of Solstad Offshore, held two newbuilding contracts with KMS.

The shipyard, at Kopervik, has incurred significant cost overruns and considerable delays on the two projects, and informed involved banks and Solstad that the yard is not in a position to stand by its contractual obligations.

Said Solstad: “In an attempt to find a model for completing the vessels, negotiations between the involved parties have taken place; however, a successful agreement has not been reached regarding distribution of the cost overrun.

“The present breach of contract and the announcement of a petition for bankruptcy mean that the shipbuilding contracts are no longer considered as binding agreements. Solstad will, on this basis, claim all deposits under the refund guarantees.”

Days earlier, Ezra Holdings Ltd also said that it had been informed by KMS that the yard will not be able to complete and deliver two vessels it is building for Ezra Holdings’ subsidiary, Lewek Shipping, in accordance with the contracts. As a result, Lewek Shipping also cancelled its orders. OSJ