The counterparty that torched the orders, Vard Holdings, shed light on the revelation in an announcement published Friday evening.
"The Board of Directors of Vard Holdings Limited wishes to inform that on12 March 2015, the company was notified that two affiliates of ER Offshore, our customer, have filed for insolvency at a local court in Germany," it said.
The shipbuilder added: "On 13 March 2015 the group terminated the two shipbuilding contracts."
Vard pointed out that it does not intend to refund a prepayment that represents roughly 10% of the purchase price of one unit.
The shipbuilder also assured investors that it should be able to sell the vessels “at a price that will cover the expected construction costs 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,” it added.
ER Offshore made headlines in July of 2014 when an affiliate penned a contract to construct a PSV at Vard’s Vung Tau shipyard in Vietnam.
At the time, the shipbuilder said another affiliate of the same operator acquired a resale that was inked by Carlotta Offshore a few months prior.
Vard told investors the former would likely hit the water in the second-quarter of 2016. It indicated that the latter was due for delivery in the third-quarter of 2015.
Attempts to reach ER Offshore for insight about its health and the insolvency of the affiliates that cancelled the orders at Vung Tau were not immediately successful at the time of writing Friday.
