Oil Report

Norway's Karmsund shipyard files for bankruptcy

OSLO, March 10 (Reuters) - The Karmsund shipyard in western Norway has filed for bankruptcy, its owner Karmsund Maritime AS said on Tuesday.

The unlisted group said its Karmsund Maritime Services AS (KMS) unit, which ran the yard and had 2007 turnover of 800 million Norwegian crowns ($113.6 million) and 130 employees, had been unable to secure financing.

“The firm has experienced cost overruns and as a consequence of the financial crisis has been unable to get financing for further operations,” Karmsund Maritime said in a statement.

The parent company also owns 14 other companies, which it said continued to operate.

Oilfield services group Solstad Offshore SOFF.OL said its subsidiary Solstad Rederi AS had ordered two vessels from KMS.

“KMS has incurred significant cost overruns and considerable delays during the two projects, and informed involved banks and Solstad Offshore that they are not in a position to stand by their contractual obligations,” Solstad Offshore said in a statement.

Solstad Chief Executive Sven Stakkestad told Reuters he would not rule out taking delivery of the vessels, but Solstad no longer considered the agreements binding.

“We are not ruling it out, but as of today we are calling on the guarantee and cancelling (the orders). That is necessary because they are filing for bankruptcy,” Stakkestad said.

Norwegian savings bank SpareBank 1 SR-Bank ROGG.OL said its total exposure to KMS was 290 million Norwegian crowns ($41.2 million).

The exposure was mainly related to the financing of the two vessels ordered by Solstad and to a guarantee for a contract with Lewek Shipping in Singapore, a subsidiary of maritime services company Ezra Holdings EZRA.SI, the bank said.

Ezra Holdings said Lewek Shipping was cancelling shipbuilding contracts for two deep-water multi-functional vessels with KMS. [ID:nSN3651671]

Shares in Solstad Offshore were down 2 percent at 1237 GMT against a 2.2 percent rise on the Oslo bourse main index .OSEBX, while Sparebank 1 SR-Bank was up 6.8 percent in thin volume. (Reporting by Richard Solem and Joergen Frich, editing by Will Waterman) ($1=7.040 Norwegian Crown)