Triumph Subsea and Harland & Wolff’s wind farm vessel deal off, Triumph says InfraStrata’s statement ‘misleading’
The Letter of Intent (LoI) for the construction of a Windfarm Development Vessel (WDV) – issued last year by Triumph Subsea Services to InfraStrata plc – has been formally cancelled, Triumph Subsea said after InfraStrata reported the LoI had been set aside as the shipbuilder was not confident the project would move forward in an update on the London Stock Exchange on 30 June.
Harland & Wolff’s parent company stated on 30 June that the LoI had been set aside for the time being as the company did not have “a high enough level of confidence in this project progressing to speculatively invest heavily in it at this time“. However, Triumph Subsea claims it had not received any formal commercial quotation and vessel build schedule after the LoI was issued and that it had already issued an LoI termination letter to InfraStrata.
Triumph Subsea said that no contract could have been agreed or signed since information that forms part of a shipbuilding contract was not received, and that it could not proceed with discussions with any of the financial institutions supporting the company in building the vessel(s) with this information missing.
“Triumph did however have a Teams call and video presentation with Harland & Wolff on the 11th of March 2021 wherein an ad-hoc presentation was shown to Triumph, the presentation consisted essentially of a Very Rough Order Magnitude price and an equally rough schedule. The VROM and rough schedule was significantly different to the £340 million and £360 million over the 24-30 month periods agreed as per the LoI”, Triumph said in a press release on 1 July.
The company issued the LoI to InfraStrata for one firm and one optional Windfarm Development Vessel (WDV) on 9 December. Under the terms of the LoI, InfraStrata’s fully owned subsidiary, Harland & Wolff (Belfast) Limited, would be responsible for the build, assembly, and delivery of the WDVs to Triumph.
In an update on the London Stock Exchange on 30 June, InfraStrata said that – given the level of inquiries from the renewables industry – it had taken a decision to prioritise projects that were in a highly advanced state and had the highest probability of success and revenue potential.
“To that extent, the Letter of Intent (LoI) for the fabrication of the Windfarm Development Vessel (WDV) for Triumph Subsea Services Ltd (Triumph), announced in December 2020, has been set aside for the time being as we do not have a high enough level of confidence in this project progressing to speculatively invest heavily in it at this time“, InfraStrata stated on 30 June.
“Clearly, we will continue to evaluate the position as we move forward and will only consider the best fit of projects for the yards that provide the optimum economic outcomes for the Company”.
Triumph Subsea called the statement “completely erroneous, misleading and a false representation of the truth”, saying that InfraStrata’s statement implied that Triumph was unaware of the LoI being set aside, while the company had already cancelled the LoI.
“Furthermore if InfraStrata considers putting together a formal quotation and schedule as ‘investing heavily’, then they should reconsider if they want to be in the shipbuilding, renewable or energy sectors as putting together formal quotations is a key component to actually getting to the point of being in an ‘effective contract’”, Triumph Subsea stated on 1 July.
The company also referred to Harland & Wolff’s contract with Saipem, in support of which InfraStrata announced Placing and Open Offer in May, saying “the requirement to execute Placing and Open Offer to raise funds to be able to execute a contract the size of Saipem’s clearly demonstrates that InfraStrata may not have been financially capable of executing the contract with Triumph”.
Triumph further said it was “more than willing” to have a discussion with the InfraStrata’s Board of Directors and the five main institutional investors or to participate in an EGM with the shareholders of InfraStrata and discuss the LoI termination.
The company added that it welcomed discussions with UK shipyards and/or consortia of UK yards to execute the build of vessels.
The vessels will be of the ST-269 design, with a length of 200 metres and a beam of 35 metres, equipped with diesel-electric hybrid engines that will eventually transition into hydrogen fuel cells.
As multi-purpose vessels, the WDVs will be utilised for fixed and floating wind farm installations, as well as for subsea cable laying and providing marine services for offshore carbon capture and green hydrogen projects.