Norway's Solstad Offshore is facing a legal scrap over the early termination of a vessel charter.
The Oslo-listed offshore shipowner said in September that Italy's Saipem had torn up an eight-year deal for the 177-loa multifunctional support vessel (MSV) Normand Maximus (built 2016) four years early.
Solstad believes it is entitled to a termination fee of $44.3m, due on 4 December.
But the shipowner said in its third-quarter results that Saipem has now written saying it has a claim for damages for alleged breach of the charter.
The figure is roughly equal to the fee owed. Saipem will withhold payment.
Legal action possible
Solstad said it will "pursue collection of the termination fee as necessary".
The Norwegian company had previously warned that it might be forced to buy back the vessel from its leasing owner, Maximus Ltd, as a result of the cancellation.
To avoid this, Solstad has to find a new charter. It remains in talks with the leaseback company to find a solution.
VesselsValue assesses the ship as worth nearly $122m.
Solstad booked an impairment of NOK 862 ($96m) in the quarter, mainly related to the Normand Maximus.
The net loss was NOK 1.1bn in the period, compared with NOK 1bn in 2019.
The effects of the prolonged Covid-19 pandemic resulted in pressure on rates, increased cost and reduced utilisation, the company said.
The 127 ships brought in revenue of NOK 1.31bn against NOK 1.48bn the year before.
Ebitda was down at NOK 395m versus NOK 515m.
Hope in wind work
"The Covid-19 pandemic and the decline in the offshore activity will affect the company's performance also going forward," Solstad warned.
"Within offshore wind it is a different picture. Investments are forecast to increase year by year going forward and could give a significant activity increase, both in Europe and other areas."
It added that the offshore fleet is "larger than the markets can consume, even under a normalised activity level".
The shipowner said a large number of vessels have to be taken permanently out of the market to improve the supply-and-demand balance.
"In addition, the shipowning side is still very fragmented and a more consolidated industry would be necessary to further balance the market," it added.
Charter extensions agreed
Last month, the company sealed a new beginning as shareholders voted through a $2bn debt restructuring that was more than five years in the making.
Debt worth NOK 9.7bn is being swapped into stock at a conversion price of NOK 3.74 per share.
The company announced on Friday that Inpex Operations Australia has extended two charters for the 21,457-hp anchor-handling tug supply ships Normand Scorpion (built 2009) and Normand Sirius (built 2014) until August 2023, with additional options.
The ships are supporting drilling for the Ichthys LNG development off north-western Australia.
