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Samsung Heavy faces cancellation of ship order upon delivery

Samsung Heavy Industries Co., a major South Korean shipbuilder, is facing cancellation of an order for a $181 million drill ship that has already been built and is ready for delivery, the company said Thursday.

The ship, Pacific Zonda, was set to be delivered to Luxemberg-based Pacific Drilling on Tuesday, but the offshore drilling company has refused to accept the delivery and said it was canceling the order, company officials said.

Pacific Drilling cited a delay in delivery, which was originally set to be made late June, they added.

"The date of delivery had been rearranged to the (October) 27th as there had been some problems, but we recently received an unexpected call that they were calling off the order," an official said, asking not to be identified.

The last-minute cancellation, if upheld, will significantly add to difficulties already facing the South Korean shipyard, which posted a net loss of 1.15 trillion won ($1.01 billion) in the second quarter. The company earlier said its third-quarter earnings have also plunged 71 percent on-year to a net profit of 51 billion.

The company officials said the company will take all necessary means to make the drilling firm honor its contract, which may include arbitration by the London Maritime Arbitrators Association.

If all available means fail, Samsung Heavy may still seek to find another buyer, they added.


Korea Herald daum