Vard terminates two shipbuilding contracts for bankrupt clients

It’s looking at reselling the vessels.

Vard Holdings has terminated two shipbuilding contracts after two affiliates of its customer, E.R Offshore, filed for insolvency at a local German court.

Vard’s subsidiary is currently constructing one PSV for each of these companies at its shipyard in Vung Tau, Vietnam and has received a 10% installment for one of the vessels.

Vard does not expect to repay the prepayment received after the contracts were terminated on March 13.

“The Group expects to be able to sell the vessels at a price that will cover the expected construction cost less the prepayment received. 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 31 December 2015,” Vard stated in a release to the SGX.