Havila Forced to Delay Delivery of Cruise Ship Waiting for Settlement
Norwegian shipping company Havila Kystruten was forced to delay the delivery of its third cruise ship the Havila Polaris and cancel its first four round trips as it awaits a resolution of its financing impacted by the sanctions placed on Russian institutions due to the war in Ukraine. This is the latest in a series of delays and challenges the company has faced in the efforts to start its Norwegian coastal cruises.
“In a year filled with challenges we could never have foreseen, we have learned to take such setbacks head on,” said Bent Martini, managing director of Havila announcing the latest delay. “We have to wait until delivery can take place in line with the regulations. While we would like to start operating earlier, there is no alternative if we wish to avoid a further legal dispute. Therefore, we have not yet been able to bring Havila Polaris home,” explained Martini.
The problems for the shipping company began in April as the sanctions against Russia and its financial institutions were extended. The Norwegian company had entered into an agreement with a well-known Russian financing company, GTLK, to build and operate the four 15,500 gross ton cruise ships under long-term charters.
Havila announced last week that it had won a legal case in The High Court of Justice, Business and Property Courts of England and Wales, Commercial Court (QBD) in London that would settle the dispute over the debt and ownership of its vessels. The company sought relief from the British court in June after it found itself in an impasse by which it could not buy the ships from GTLK and receive clear title.
In September, Havila reached terms on a €370 million ($390 million) refinancing of the fleet and for payments to the Tersan shipyard for the completion of the third and fourth vessels, Havila Polaris and Havila Pollux. In addition to completing the last two vessels, it was to be used for the redemption of existing debt related to all ships.
The British court confirmed to meet the restrictions under the sanctions, that the payments would be made to a frozen bank account. GTLK had opposed this solution but it will gain access to the funds when the sanctions permit. The shipping company however cannot take delivery of Havila Polaris pending clearance of a legal settlement to the blocked account.
Havila reports the building of the Polaris is complete and it now hopes to get clarification in the next few weeks on the settlement. The company noted that the legal process is taking longer than both its legal advisers and it had expected.
They had hoped to take immediate delivery of the Havila Polaris and sail her from the shipyard in Turkey to Bergen for her final outfitting, hopefully still making her December 29 maiden voyage. Based on the latest developments, Havila canceled the round trips departing from Bergen through the end of January 2023. Havila Voyages set a deadline for the delivery of Havila Polaris “a little over halfway through January” in order to start sailing from Bergen on February 11, 2023.
Delivery of the fourth cruise ship, Havila Pollux, in the last update, was scheduled for no later than the end of March 2023. It is a series of long delays for the ships, which originally were to be built in Spain by Astilleros Hijos de J Barreras. After the financial collapse of that shipyard in 2019, it was agreed that the unfinished ships would be towed to Turkey where the Tersan shipyard was building the other two vessels. Under the company’s contract with Norway, they had originally been scheduled to start the coastal voyages by January 2021 but they required several delays before finally starting the service at the end of the year. The company's first two cruise ships are currently sailing on the Norwegian coastal voyages.