Havila Gets License to Release Delayed Ships from Sanctioned Lender

Havila Kystruten received a license from the Central Bank of Ireland which along with authorization in London and Norway will permit the company to proceed with the refinancing and take delivery of its two delayed coastal cruise ships. The Norwegian shipping company says it has been a complicated process and taken longer than anticipated to establish a legal solution to pay off debts and release security linked to the vessels from the divisions of sanctioned Russian finance company GTLK.

The company reported in mid-January that it had won a decision in the Irish courts that would permit it to take delivery of the ships Havila Polaris and Havila Pollux from the Tersan Shipyard in Turkey. The vessels are being built under a financial arrangement that called for them to be owned by divisions of GTLK and operate on long-term charters to Havila. 

The sanctions imposed on Russian financial institutions in April 2022 after the invasion of Ukraine however prevented Havila from completing the original agreements. The company’s first vessel was out of service for months while the company could find a solution and the second vessel was delivered with temporary financing from the shipyard. Delivery of the Havila Polaris has been delayed since December 2022 while they worked on the financial solution and while construction was being completed for Havila Pollux.

“The licenses are critical for our facilitators to be able to work freely in relevant markets for us to settle our debts to the original lender to a frozen account according to the sanction regulations and release the security in the vessels,” explains Brent Martini CEO of Havila Voyages. “The ships will be ready for delivery as soon as we have completed the financing process.”

The licenses will permit the company to undertake a new round of financing with EU and Scandinavian investors. Havila reports it has appointed Arctic Securities and Fearnley Securities as facilitators to assist in the financing process.

Due to the delays in obtaining the Irish licenses, Havila however reported in an exchange filing that it has had to request an extension from the courts in London on the settlement deadlines. They expect the British courts to grant the extension during the coming week. In addition, Havila has also applied for licenses in the UK and USA to ensure both British and American investors can participate in the financing.

Havila reports that it continues to receive strong demand for its coastal voyages between Bergen and Kystruten in Norway. During the first quarter with only two of the planned four vessels operating they achieved almost 70 percent occupancy and they report around 50 percent of the capacity for all four ships is already sold for 2023.

However, the continuing delays in completing the financing arrangements caused Havila to yet again reschedule the first sailings for the two ships. The Havila Polaris which was due to enter service on December 29 is now scheduled for its first voyage on June 12. The fourth ship, Havila Pollux, is also nearing delivery and they have scheduled her first sailing for June 18.

Havila operates under a contract with the Norwegian Ministry of Transport to provide the coastal service. The service contract is split between Havila Voyages and Hurtigruten. It provides a critical transport route along the coast and is also offered as cruise voyages for tourists.