Auction company 

Swan Hellenic’s second cruise ship up for auction due to sanctions

The expedition cruise ship SH Vega leaving the building lobby in Helsinki (photos courtesy of Helsinki Shipyard)

Posted on 20 June 2022 20:17 by

The Maritime Executive

In the latest twist of international sanctions against Russian entities and their impact on the shipping industry, recently relaunched expedition cruise line Swan Hellenic finds itself forced to bid for its new cruise ship just weeks before its scheduled entry into service. The 10,600 gross tons SH Vegawhich the Helsinki Shipyard simply refers to as Hull No 517 is being sold ‘as is’ and ‘where is’ with bids due this Friday 24th June.

The SH Vega is a sister ship of SH Minerva what was delivered to the cruise line end of 2021 part of a brand reboot effort that dates back to the 1950s and is considered one of the pioneers of expedition and educational travel. The sister ships, along with a third large cruise ship still under construction, were financed by the new cruise line working with Russian leasing company GTLK. The contracts provide for the vessels to operate under long-term charters with Swan Hellenic.

In April 2022, however, the EU and US extended their sanctions against Russian entities, including GTLK and its affiliates. Swan Hellenic was one of many shipping companies, including Havila Voyages, that found itself caught under sanctions. Last week, Havila announced that he had turned to the UK courts are trying to resolve his property issues and was able to protect its cruise ships under construction from the shipyard acting without Havila’s permission. Swan Hellenic announced in the spring that it would exercise call options in its cruise ship contracts but is still seeking court clearance to finalize the acquisitions because, like Havila, they cannot send money to a sanctioned company.

“As a result of the sanctions announced in April, the leasing company GTLK Europe defaulted on payments as a new build contract for NB 517 SH Vega. Additionally, all assets owned by GTLK should be frozen in the EU,” Swan Hellenic said in a statement today indicating that GTLK will not be able to take delivery of the vessel.

SH Vega completed sea trials in late May for delivery (Helsinki Shipyard)

Finnish shipbuilder Helsinki Shipyard issued a tender notice a week ago inviting interested bidders to acquire the expedition cruise ship. “Helsinki Shipyard seeks the best fair market value for the vessel and reserves the right to reject all offers,” the company said in the notice. The shipyard attests to having become the sole owner of the cruise ship stating that it will select the winner and announce the new owner by July 1, with delivery of the ship to be completed by July 19.

Explaining its current situation, Swan Hellenic reports that the Helsinki Shipyard has started the legal process of auctioning the new build under the terms of the shipbuilding contract. Swan Hellenic says he is the “priority buyer” and has already submitted a bid for the ship which he plans to commission on July 20 with an Arctic cruise from Trömso, Norway.

Swan Hellenic said “he is at an advanced stage of preparing the paperwork for the transfer of title to SH Vega and is ready to take full control of the vessel at the end of the tender. Therefore, we expect there will be no change of plans in the scheduled cruises.

Hellenic Shipyard reports that Hull 517 is ready for delivery and that “upon completion of sale and purchase, possession of the vessel will be automatic and immediately deemed to pass to the purchaser.” The ship’s sea trials were completed on May 20 with Jonas Packalén, the ship’s project manager, indicating that they had carried out around 800 tests. The final tests took place at the shipyard.

Work is also continuing on the third cruise ship under construction for Swan Hellenic. The shipyard reported that the last block of the ship arrived in Helsinki on May 22. They plan to float the ship named SH Diana later this summer. Delivery is scheduled for the end of 2022.

Swan Hellenic in May announced that they would focus their operations for summer 2022 on the SH Vega in the arctic. The company had planned to reposition the SH Minerva after its first season in Antarctica also in the Arctic. They did, however, report that new COVID-related restrictions necessitated changes to routes and itineraries and that with a general easing of the travel market partly due to the situation in Ukraine, they were jumping ship in Montevideo, Uruguay to ready for the Antarctic season in October.

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