Sovcomflot fined Finnish shipyard Arctech Helsinki Shipyard for $ 50 million

The shipyard, owned by the United Shipbuilding Corporation, has been experiencing financial crisis for several years already, regularly and monotonously breaks orders.
Sovcomflot fined the Finnish shipyard Arctech Helsinki Shipyard, part of the United Shipbuilding Corporation (USC), for delaying the delivery of four vessels for the Sakhalin-2 project. According to Kommersant's information, the fine was about $ 50 million. Taking into account the losses on the Murmansk icebreaker for Rosmorport, the plant will not be able to make a profit within the next seven years. As part of the rehabilitation of the shipyard, USC plans to sell control to the Kermas group, after which the plant can gain access to foreign financing and attract orders for cruise ships.

Kommersant learned that the Finnish shipyard Arctech Helsinki Shipyard paid fines to Sovcomflot following the construction of supply vessels for the Sakhalin-2 project. The reason was the untimely surrender of all four vessels (the supplier of Gennady Nevelskoy and the three onboard vessels Stepan Makarov, Fedor Ushakov and Evgeni Primakov) who will work under a long-term charter agreement for Sakhalin Energy. The parties do not disclose the amount of fines. OSK President Aleksei Rakhmanov notes that the initially imposed fines were reduced by three courts in three courts by 30%, and by "Yevgeny Primakov" by 3.5 times: "The delay was about seven months and is associated exclusively with the sanctions imposed on USC." Sovcomflot declined to comment. "Originally the amount of fines was simply astronomical, and in the end amounted to about $ 50 million," - says a source of Kommersant.

The most difficult for the Finnish shipyard was 2015, when the plant was left without funding: after joining the Crimea and imposing sanctions on a number of Russian companies (including USC), Western banks refused to work with Arctech. USC only a year later managed to get a loan in Sberbank for completion of orders. At the end of 2016, the corporation was re-credited to VTB at 4.5% per annum for € 435 million. "The contract had only a 20% advance, so we had to look for 80% ourselves," explained Alexei Rakhmanov.

But the financial problems of the plant are not limited to fines to Sovcomflot. In the same year in 2015, the construction of the icebreaker "Murmansk" of project 21900M for Rosmorport was paralyzed in Helsinki. "We are not so worried about the losses from the construction of the series, like the story of the icebreaker. Before we got full control of the shipyard, it was contracted by Finnish colleagues in rubles with a 60 percent share of foreign components. As a result, we received a course difference, which no one compensated, "- says Alexei Rakhmanov. According to him, the loss was about half the price of the icebreaker.

Now USC is trying to attract to its Finnish shipyard an order for the construction of cruise ships with a displacement of up to 75 thousand tons. "We have preliminary talks with Japanese customers. The Chinese operator is also interested, "says Alexei Rakhmanov. He admits that in view of Arctech's financial losses in recent years, the shipyard will not make a profit in the next seven years and allows a recovery option through bankruptcy. So OSK sorted out the debts of the Baltic plant, which was divided into two legal entities, united only recently. However, the corporation is counting on the support of the Kermas group, with which they are negotiating the sale of the controlling stake in Arctech. The group owns the Croatian shipyard Brodotrogir, a year ago it laid the front of the tanker for transporting gas condensate, ordered from Arctech for the Yamal-LNG project. Kermas hopes to boost the loading of the shipyard in Croatia by attracting orders placed on Arctech.

According to Kommersant's sources, there is a great demand on cruise ships in the world market, but Arctech is not among the leading players and it will be difficult for it to compete with Dutch and German shipyards. Director of the Marine Engineering Bureau Gennady Egorov, on the contrary, believes that the Finnish shipyard USC is able to obtain orders for medium cruise ships for about 1,000 people: "World leaders in cruise shipbuilding - the Italian Fincantieri and Meyer Werft in German Papenburg. But they, as a rule, build ships for 3-5 thousand passengers. Arctech is quite capable of building a ship for 1,000 people, they have all the competencies for this. The main thing is that the order was not unique. "