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Hyundai Samho in $170m settlement with Seadrill over cancelled rig

Hyundai Samho in $170m settlement with Seadrill over cancelled rig
Seadrill has reached a settlement with Hyundai Samho Heavy Industries (HSHI) over the cancelled semi-submersible rig West Mira.

Under the terms of the settlement Seadrill will receive a cash payment of $170m, while as part of the settlement the rig was purchased by another John Fredriksen company Seatankers.

The West Mira was ordered by Seadrill in May 2012 and was due for delivery by 31 December 2014. In October 2015 the company cancelled the rig at HSHI due to late delivery and said it was looking to recoup $168m in installments plus interest.

“Arbitration proceedings began in October 2015 following the cancellation of the construction contract for the West Mira and were expected to conclude during the first half of 2018. This settlement agreement brings an early conclusion to the arbitration process,” Seadrill said. It will take a $44m non-cash impairment for the difference to the carrying value of the rig.

New owner Seatankers will not engage in drilling activities in competition with Seadrill which expects to undertake its commercial and operational management.

The West Mira was originally slated for a five year charter with Husky Oil Operations in Canada.

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