Samsung Heavy Industries

 

[Alpha Biz= Reporter Kim Sangjin] Samsung Heavy Industries received a notification of contract termination from a Russian shipowner for ship equipment supply. As a result, Samsung Heavy Industries plans to file a lawsuit with the Singapore International Arbitration Court, demanding the return of approximately 1 trillion won in advance payments made to Zvezda Shipbuilding Complex.

On the 13th, Samsung Heavy Industries disclosed that the shipowner notified them of the termination of the contract for supplying ship blocks and equipment, valued at $4.2 billion (approximately 5.7 trillion won at the time), which was considered the largest contract in the shipbuilding industry.

Upon the announcement of the contract termination, Samsung Heavy Industries' stock price fell by 2.52% to 8,910 won compared to the previous trading day.

Samsung Heavy Industries had already dispatched local personnel to Zvezda Shipbuilding Complex to construct 5 out of 15 LNG carriers, which have already been delivered. In the shipbuilding industry, heavy-tail contracts often involve receiving a smaller advance payment and a larger payment upon delivery. It is reported that Samsung Heavy Industries received over 90% of the payment for the delivered 5 vessels.

However, following the outbreak of the Russia-Ukraine war in early 2022, Samsung Heavy Industries halted the construction of 10 LNG carriers and 7 shuttle tankers and withdrew local personnel. Amidst these developments, Zvezda Shipbuilding Complex faced sanctions, including from the United States, and ultimately requested the return of advance payments due to the impossibility of completing the construction of the remaining vessels.
 

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