Singapore’s Mermaid Offshore, a subsidiary of Mermaid Maritime Public Company, has cancelled an order for a subsea vessel ordered at Hong Kong-listed China Merchants Industry Holdings in 2014.
The DP1 dive support and construction vessel was originally ordered at CMIH’s yard on Mazhou Island, in January 2014 for a contract price of US$145.2m.
“In light of the challenging global oil and gas market situation and the cooperative relationship between the company and the builder (CMIH), the parties have mutually entered into a settlement agreement to terminate the construction contract for the vessel effective 6 December 2016,” Mermaid said.
The agreement provided for retention of US20.4m by CMIH. Mermaid was allocated US$1m for expenses incurred in relation to the construction contract and settlement.
Although the cancellation was only announced on December 7, Mermaid said the company had moved to mitigate financial exposure by recording and asset impairment on the total pre-paid sum and associated costs related to the vessel in its 2015 financial statements.