Postponed deliveries of two ships mean that Meyer Werft, the German shipbuilder, faces a delay in the payment of more than $1.0 billion to its bank account and the company has to seek funding to fill the gap.
The delivery of Iona to P&O Cruises in the UK that had been intended to take place in May, was first postponed to July and it is now hoped that the delivery could take place at the end of August, Bernard Meyer, head of the shipbuilder said in a video presentation to the company’s staff.
The postponed delivery, resulting from suspension of cruise operations of the Carnival Corporation & plc unit, means that the shipbuilder will not be able to receive the 80% of the contract price that is due to be paid on delivery until much later than originally planned. Consequently, the company has to seek additional short term funding to maintain its liquidity, Meyer said in the presentation to the staff of the company.
Iona has a contract price of USD1.1 billion, according to Shippax Info, the Swedish cruise and ferry industry publication. The amount due to Meyer Werft on delivery would thus amount to $880 million.
Spirit of Adventure, a newbuilding of about 56,000 gross tons for Saga Cruises in the UK, is also nearing completion and Meyer expects to deliver the vessel at the end of September. It was originally planned to be delivered in August. The ship’s contract price is $330 million, according to Shippax Info, of which the 80% due on delivery amounts to $264 million.
The cruise industry has been forced to postpone the commencement of operations, from early summer to late summer in some cases and in the case of the US, until late this year.
As cruise lines do not know when they can resume operations, it has not been possible to conclude talks about new delivery dates of ships they have on order at the shipyard, Bernhard Meyer said, describing the discussions as “complex.”
