23 November 2017
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SembMarine settles contractual spat with Marco Polo

Business Times
14 Nov 2017
Jacqueline Woo

The legal spat between Sembcorp Marine (SembMarine) and Marco Polo Marine has ended amicably.

SembMarine announced on Monday that its unit PPL Shipyard has entered into a settlement agreement with Marco Polo Marine and its subsidiary, Marco Polo Drilling, on a without admission of fault or liability basis.

This was based on the terms that a consent award be entered into in favour of PPL Shipyard for the whole of its claim and interest in the arbitration proceedings, and with Marco Polo Marine and Marco Polo Drilling withdrawing their own respective claims.

In November 2015, Marco Polo terminated a newbuild contract valued at US$214.3 million for a jack-up rig under construction at SembMarine's 85 per cent-owned PPL Shipyard, alleging that the shipyard had failed to comply with certain contractual obligations.

PPL Shipyard, which initially rejected the termination, then served its own termination notice on Marco Polo for allegedly failing to pay a progress payment plus interest.

SembMarine said in its latest statement that the matter is not expected to have any material impact on its net tangible assets and earnings per share for the year ending Dec 31.

For Marco Polo, the settlement agreement with SembMarine could mean one less bump in its restructuring journey.

The offshore and marine group, which has total debts of more than S$258 million on its books, has sought restructuring under two separate schemes of arrangement filed with the Singapore High Court.

The Business Times reported last week that nine prominent business names have pooled together S$60 million in rescue financing for the group, including the founders or founding families behind household names Super Group, Soilbuild, Goldbell and Yanlord.

Marco Polo chief executive Sean Lee said in a statement to BT: "As Marco Polo Marine is in the final leg of a restructuring programme, with nine prominent strategic investors supporting the group with their S$60 million investment, we decided not to pursue this dispute any further and to close this chapter and settle, with no admission of liabilities.

"This allows the group to move forward on a clean slate, with no baggage and no uncertainties."

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.