Two start-up cruise lines are reporting that they have been able to work around challenges created by the Russian sanctions. Both Swan Hellenic and Havlia Kystruten had financed their new ships with the Russian-owned GTLK, which in April was included on the growing list of sanctioned companies by European and American officials.
Helsinki Shipyard announced today that it has declared Swan Hellenic the winner of a tender auction staged by the shipyard to determine the ownership of the recently completed second expedition cruise ship Newbuild 517 built to Swan Hellenic’s specifications. The keel of the 370-foot cruise ship was laid down in December 2020 in Helsinki and the ship was ready for delivery when the sanctions intervened.
GTLK, which was due to take delivery of the cruise ship, was unable to complete the handover due to the sanctions. Helsinki Shipyard then announced under the terms of the contract, that they were going to place the cruise ship up for sale accepting bids through last Friday, June 24.
Swan Hellenic found itself in the unusual position of having to bid for its ship which is due to sail on its maiden voyage in just over a month’s time. They reported however that they were the priority bidder and today the shipyard said it had reviewed the bids and declared Swan Hellenic the winner. The cruise line said as soon as registration is completed with the Bahamas it will take delivery of the SH Vega and the maiden voyage will proceed as planned on July 20 from Tromsø, Norway.
In the spring, Swan Hellenic had announced that it was exercising the purchase rights under its charter for its ships from GTLK. The company’s first cruise ship, SH Mineva, however, was laid up in South America instead of repositioning for planned summer cruises in the Arctic. The cruise line cited a softening of demand due to the geopolitical situation, travel restrictions due to COVID-19, and its need to complete the purchase of the ship.
Havila found itself also caught in a similar situation. The first of the company’s four cruise ships, Havila Capella, had to be laid up in April after the sanctions were announced and its insurers canceled the general liability coverage for the ship. The cruise line reported it was seeking a solution to refinance and went to court in Norway and the UK seeking to win control of their first ship.
After being laid up for 11 weeks, Havila Capella will resume its Norwegian coastal voyages on June 28. The company reported that it recently won a court order in Norway to arrest the ship with forced use for up to two years. Last week, they were able to resolve the insurance issues and received the necessary certificates from the Norwegian Maritime Directorate to resume operations of the Havila Capella.
The cruise lines, however, continue to have challenges from the sanctions as they also seek to refinance the ownership of the vessels. Under the sanctions, they are not permitted to hand over monies to GTLK as a sanctioned entity. Havila had proposed putting the proceeds into a blocked account which GTLK could access when the sanctions ended. GTLK, however, reportedly rejected that option continuing to seek immediate payment for the ships.
Both Swan Hellenic and Havila also have additional cruise ships under construction that would have been covered under the original financing arrangement. Havila reported that the UK court ordered that the shipyard could not take any actions on Havila’s two additional cruise ships due for delivery in late 2022 without the line’s approval. Helsinki Shipyard is also building a third, larger cruise ship for Swan Hellenic due for delivery at the end of 2022.
