Norway's Havila Shipping has torn up a long-term subsea vessel charter after counterparty DeepOcean filed for court protection in the UK.
The 127-loa cable-layer Havila Phoenix (built 2009) has served DeepOcean since 2013 and had a firm deal up to May 2023, with further options.
DeepOcean, whose headquarters is in Oslo, filed for court protection on 18 November to wind up its UK-based activities, including the subsidiary that chartered the Havila Phoenix.
Havila said the vessel had just finished a project for DeepOcean, but was given no further indication about future work.
As a result, the Norwegian owner said DeepOcean is in breach of contractual obligations, including payment default.
Havila tore up the charter on Friday.
Payment demanded
It has asked for payment from DeepOcean and offered the vessel to the market.
The DeepOcean restructuring relates to three UK subsidiaries — DeepOcean 1 UK, DeepOcean Subsea Cables and Enshore Subsea — in its cable-laying and trenching (CL&T) business.
The High Court action in London is planned to allow these units to wind down on a solvent basis.
There will be a hearing on 15 December to convene creditor meetings to vote on the plans.
"The process follows an extended period of loss-making operations by the CL&T Group and reflects changes in the industry’s procurement strategies and available installation capacity, as well as a mismatch between the CL&T Group’s contractual commitments and market conditions," DeepOcean said.
DeepOcean said it remains committed to the renewables sector and to investing in new technologies that reduce costs and emissions for the industry.
Loss-making business
Chief executive Oyvind Mikaelsen said: "Despite our long-term commitment to the cable lay and trenching division, it has been loss-making for some time.
"We have invested and explored structural alternatives to turn around the business. However, the division is not sustainable and there is no prospect of it becoming profitable under current market conditions and with current contractual obligations."
He said the court process allows the rest of the group to move to a secure financial footing.
The company has been contacted for details of its other vessel charters.
