Havila avoids penalties as sanctions continue to delay operations

A year after financial sanctions were first imposed on Russian financial institutions, Norwegian company Havila Voyages continues to work to resolve the complicated issues delaying the delivery of the company’s third and fourth coastal passenger ships. The company invoked “force majeure” to avoid potentially damaging Norwegian fines, but continues to delay the maiden voyage of the third cruise ship, Havila Polaris.

The company signed a deal with the Norwegian Ministry of Transport in 2018 to start coastal service between Bergen and Kirkenes. The historic agreement split operations on the route for the first time, giving Havila the order for four ships while Hurtigruten retained part of the route with the right to operate seven ships. Havila was scheduled to begin service in 2021.

“Above all, we want to be fully operational as planned with all four ships on the Norwegian coast,” said Bent Martini, Managing Director of Havila Voyages. “Unfortunately, we have been hit by many unfortunate and unforeseen circumstances, most recently being unable to take on a completed ship like the Havila Polaris due to sanctions regulations.”

The Norwegian Ministry of Transport told the company today, April 14, that it has agreed to withdraw a proposed fine for the third cruise ship’s unscheduled launch in early 2023. In February 2023, the Ministry informed the company of its intention to impose a penalty equal to part of the compensation paid to Havila for the third ship that was delayed in entering service on the coastal route.

“We believe that we should not be penalized for a delay that is beyond our control,” Martini said. The company cited force majeure in its response to the government’s request that the fine be reconsidered and withdrawn. Martini warned that if the ministry proceeded with the fine, “it would make us more vulnerable in terms of liquidity.” He said the coastal route is working with a small margin.

However, for the fifth time, Havila has been forced to delay the Havila Polaris’ maiden voyage. The ship has been completed and the company originally expected to take delivery in the second week of December 2022. Instead, the ship remained at the Tersan shipyard in Turkey, with the December 29 departure being postponed first to February 11, then to April 7 and finally to April 29. Havila is now targeting May 21st for the maiden voyage from Bergen.

“We continue to work to resolve complicated legal processes to receive Havila Polaris and eventually Havila Pollux,” Martini said. The ships were financed by Russian company GTLK and chartered to Havila, but sanctions have prevented the company from buying the ships due to restrictions on payments to Russian financial institutions. Havila won a court order that should allow them to take possession of the ships and completed the refinancing agreements. It is awaiting court approval to proceed with the solution, in which the funds are deposited in frozen accounts and the company takes over the ships.

Source: News Network