Vard to build three Norwegian coast guard vessels for $840m

Shipbuilder Vard Holdings has clinched a contract to build three coast guard vessels for the Norwegian Defence Materiel Agency (NDMA) for more than five billion Norwegian krone (S$840 million), it announced yesterday.

The Norwegian government had first announced plans for the construction of the three vessels in September 2016. Following a review of offers from three competing yards, Vard Langsten was selected to continue negotiations last October.

The investments were approved by the Norwegian Parliament early this month, with final negotiations to be completed in the coming weeks.

The new tailor-made vessels will be developed for worldwide operations in all weather and sea conditions, and are specially designed to withstand operations in demanding arctic areas. The vessels feature strong ocean-going capacities for long-distance transits, search-and-rescue operations, surveillance and oil recovery, Vard said.

NDMA's director-general, Ms Mette Sorfonden, said: "Due to national security interests, the Norwegian government decided that the competition should be restricted to Norwegian yards only. Vard Group with its Vard Langsten yard was the provider that overall satisfied the defined requirements for solution and the Navy and the Coast Guard's needs in the best manner."

Deliveries of the three vessels are scheduled from Vard Langsten in Norway in the first quarters of 2022, 2023 and 2024. The hulls will be built at Vard Tulcea in Romania.

BEST ABLE TO MEET NEEDS

Due to national security interests, the Norwegian government decided that the competition should be restricted to Norwegian yards only. Vard Group with its Vard Langsten yard was the provider that overall satisfied the defined requirements for solution and the Navy and the Coast Guard's needs in the best manner.

MS METTE SORFONDEN, director-general of the Norwegian Defence Materiel Agency.

Vard said: "The effectiveness of the contract is subject to certain conditions being lifted". It did not elaborate on what these conditions were.

The contract is not expected to have any material impact on the company's earnings per share or net tangible assets per share for the current financial year, it added.

Shares of Vard, the target of a takeover by Italy's Fincantieri, ended unchanged at 25 cents yesterday. Fincantieri, which has amassed a more than 80 per cent stake in Vard, has made an offer to buy the remaining shares at 25 cents apiece and take the firm private.

Over the weekend, Vard announced it would delay an extraordinary general meeting on its proposed delisting, as the updated delisting circular is still being reviewed by bourse regulators.

A version of this article appeared in the print edition of The Straits Times on June 26, 2018, with the headline 'Vard to build three Norwegian coast guard vessels for $840m'. Print Edition | Subscribe