Vard's Brazilian customer cancels order for 2 LPG vessels

Vard Braila.

SINGAPORE - Mainboard-listed Vard Holdings said Petrobras Transportes SA (Transpetro) has terminated the contracts for two liquefied petroleum gas (LPG) carriers on order from its 50.5-per cent owned indirect subsidiary, Vard Promar SA.

The vessels in question are the last two of a series of eight LPG carriers originally contracted in June 2010, for delivery from Vard Promar between 2014 and 2016.

The combined contract value for the series of eight vessels was US$536 million (S$757.6 million), Vard said in a filing with the Singapore Exchange on Monday (Dec 14). It did not give a contract value for just the two cancelled vessels.

Construction of the two vessels was at a very early stage, the company added.

Vard said it intends to claim compensation from Transpetro for damages in relation to the terminated contracts.

It is also currently reviewing its overall exposure to the Brazilian market.

Vard said the impact of the termination is not expected to have a material effect on the earnings per share of the group for the financial year ending Dec 31, 2015.

Vard shares fell when trading opened on Monday (Dec 14), with the counter down 2 cents or 7.7 per cent at 24 Singapore cents as at 9.12am.