VARD signs diving support and construction vessel sales and purchase agreement

Source: press release, 7 September 2018

VARD 3 03 – Diving Support and Construction vessel of 12-m length, 121-m breadth: 23 m – designed by Vard Design
VARD 3 03 – Diving Support and Construction vessel of 12-m length, 121-m breadth: 23 m – designed by Vard Design (photo: VARD)

Vard Holdings Limited, a major global designer and shipbuilder of specialised vessels, has announced that it has signed a sales and purchase agreement (SPA) for the sale of its diving support and construction vessel previously contracted by Harkand Group. The SPA is signed with an undisclosed international customer.

The original contract with Harkand had been announced on 30 December 2013, followed by an update announcement in May 2016 when the Company was notified that Harkand had entered into administration. VARD has now cancelled the original contract with Harkand’s administration to facilitate entering into the new agreement.

The sale of the vessel will allow VARD to reduce the capital employed by eliminating a vessel from its inventory and reduce its liabilities by reimbursing the related construction loan with a direct benefit from lower financial charges going forward. As an additional consequence of the reimbursement of the construction loan, the company will benefit from the release of the cash posted as collateral in favour of the lending bank with a correspondent positive impact on the liquidity position of the Company. The impact of the expected transaction on EPS was already reflected in the Q2 2018 announcement through an adjustment to net realisable value of vessels in inventory.

The vessel is of VARD 3 03 design, specially designed and equipped for diving and subsea operation duties. The vessel is outfitted with a 250-tonne offshore crane and a twin bell 18 man saturation diving system, supporting split level diving operations to a maximum diving depth of 300 metres. Delivery is scheduled from Vard Søviknes in 1Q 2019, and the vessel will in the meantime be finalised, tested and prepared for operations.

The SPA has been entered into in the ordinary course of business of the company. None of the Directors or the controlling shareholders of the company have any interest, direct or indirect, in the above agreement.