Payment Default for Nautilus Production Support Vessel
Nautilus has been informed by Fujian Mawei Shipbuilding that MAC Goliath (MAC), the buyer of the production support vessel (PSV) being built for Nautilus’ Solwara 1 subsea mining project, has failed to pay the third installment of the contract price (approximately USD 18 million + interest).
Under the shipbuilding contract, MAC is required to rectify the default immediately, and perform corresponding obligations under the contract.
If MAC fails to remedy the default within 21 days of the receipt of a notice to MAC from the Shipyard, then the Shipyard may cancel the contract. In the event that the contract is terminated, the Shipyard has the right to either complete or not complete the vessel and to sell it by private sale either in a complete or incomplete state.
In accordance with the terms of the contract, Nautilus Minerals Singapore has the option to either remedy the default on behalf of MAC and/or replace MAC as a party to the contract by way of a novation or assignment within fourteen days of receipt of the notice to the company from the Shipyard.
Nautilus noted that the current build of the PSV is progressing well, with construction over 70% complete. The derrick substructure was recently delivered to the shipyard for installation on the PSV. Foundations for two of the three launch and recovery systems (LARS) are being installed, the bulk cutter winch has been installed, work on the cargo handling system is progressing, and both the 100T and 200T cranes have now also been installed.
Nautilus is in discussions with the Shipyard, MAC and third parties with respect to the default and potential remedies, and said it will issue further updates as matters develop.