Bangalore: Chennai-based Tebma Shipyards Ltd has lost a contract worth Rs400 crore to build four ships after US-based Trico Marine Services Inc. cancelled part of an order to reduce expenses.
The original contract in 2007 was for seven ships that would be used for supporting offshore oil exploration activities.
The cancellation would reduce capital expenditure obligations by $100 million (Rs462 crore), Trico Marine said in a statement on 18 February.
A spokesman for Tebma Shipyards said discussions were held with Trico Marine on cancelling four ships as the shipowner was going through a financial restructuring exercise, but declined to give details. Such cancellations typically entail penalties.
Tebma will now have to re-sell the four ships to another buyer at current prices, which are lower than the peak rates that prevailed in 2007.
Trico said in its statement it expects the global offshore supply vessel market to remain “very weak” and has tailored its fleet to this reality, trimming it to 37 vessels from 45.
Tebma has delivered two of the seven ships to Trico and another two were in advanced stages of construction, said the firm’s spokesman. Each of the seven ships were valued at around Rs100 crore, he added.
In 2007, ICICI Venture Funds Management Co. Ltd, through its India Advantage Fund–VI (IAF-VI), had acquired a 33% stake in Tebma.
Subsequently, IAF-VI acquired an additional 20% stake from the public in an open offer as per India’s take-over laws.
For the year ended 31 March 2009, Tebma had a net loss of Rs82 crore, mainly on account of foreign exchange losses of around Rs78 crore.