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Deep Sea Supply and Scan Geophysical settle newbuildings dispute

OSLO-listed shipping companies Deep Sea Supply and Scan Geophysical have settled financial claims over three newbuilding offshore vessels. The dispute was over ships that are under construction at ABG Shipyard in India. DSS, ordered the vessels in early 2006 and the newbuilding contracts were acquired by Scan Geophysical in June 2006. DSS, in which John Fredriksen’s Hemen Holding has a 34% stake, said Scan Geophysical agreed to pay DSS $1m as part of the claim. It said outstanding claims of $12.4m were to be settled upon delivery of the three vessels. The ships are being built as seismic survey vessels for Scan Geophysical. Their deliveries are heavily delayed by yard and workforce issues, so that they will not be leaving ABG Shipyard until this year. So the $1m payment is an interim measure for Scan Geophysical, which is suffering from too little financial support. The Scan Empress, Scan Finder and Scan Superior are due to be delivered this year. They are designed to acquire 3D seismic data for the oil and gas industry. The resolution of this dispute came as Scan Geophysical was having trouble refinancing its newbuilding payments. The Norwegian company, which publishes its fourth quarter results today, failed to gain sale and lease-back agreements for the newbuildings. It has a fleet of three vessels including the 2008-delivered Scan Stigandi, which it charters from Neptune Seismic.

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