Vard customer cancels order for 2 LPG vessels

VARD Holdings' 50.5 per cent subsidiary Vard Promar SA has received a cancellation notice from Petrobras Transportes SA (Transpetro) on two liquefied petroleum gas (LPG) carriers.

The termination is not expected to materially affect earnings in 2015, said Vard, a shipbuilder.

The cancelled vessels are the last two of a US$536 million eight-vessel order placed in June 2010 for delivery between 2014 and 2016. Vard said construction of the two vessels was at a "very early stage".

"The company is currently reviewing its overall exposure to the Brazilian market, and the termination - if effective - is expected to reduce the company's overall exposure," Vard said in an announcement. "At the same time, the company intends to claim compensation from Transpetro for damages in relation to the terminated contracts."

Vard closed at 26 Singapore cents on Friday.