Prosafe, Cosco in another flotel delivery delay

Oslo-listed flotel provider Prosafe and China’s shipbuilder Cosco have agreed to further extend a standstill agreement regarding the delivery of two accommodation units. The third unit must be delivered before the end of 2019.

Safe Eurus/©Prosafe

Three flotels waiting at Cosco’s Qidong shipyard in China to be delivered to Prosafe are the Safe Eurus, Safe Nova, and Safe Vega.

Deliveries for Safe Nova and Safe Vega have been postponed several times with the latest one pushing the delivery date to July 27.

Prosafe said on Thursday, July 26 that the parties agreed to extend the standstill agreement related to Safe Nova and Safe Vega until August 10, 2018.

The company added that it continued to work with Cosco to find a workable commercial solution for the delivery of the vessels.

If no agreement is reached, Prosafe has the right to claim cancellation of the newbuild contracts due to delay, and claim repayment of the installments paid including interest of around $60 million in total, secured by a refund guarantee from Bank of China.

Meanwhile, the Safe Eurus is in a preserved, strategic stacking mode with Cosco. Prosafe said that the vessel must be delivered before the end of 2019.

It is worth mentioning that Prosafe agreed on a deferred delivery of flotel Safe Eurus with the Chinese shipbuilder to 4Q 2019, or such earlier time required by the company, back in July 2016. The flotel was originally scheduled for delivery that year.