Contract termination follows insolvency application by shipyard
Irish Continental Group (ICG) has this morning confirmed the termination of a contract with Flensburger Schiffbau-Gesellschaft (FSG) for a new ferry for Irish Ferries Dublin – Holyhead route. The termination follows the yard applying for voluntary insolvency earlier this year. This appears to have been designed to get out of the ICG order according to some reports from Germany. The order was believed to be loss making. At present production at the shipyard has been paused due to COVID-19, though the yard is hopeful of resuming later this month. Brittany Ferries HONFLEUR is currently the only order on FSG’s books with the much delayed ship still being fitted out.
In its trading update, ICG said;
ICG has terminated its contract with the German shipbuilder FSG, who were contracted to build a new vessel for Irish Ferries. This follows the yard making an application through the German courts system to be placed in debtor in possession management under the oversight of an Insolvency Monitor. As part of the original contract with the yard, ICG paid a deposit on this vessel for 20% (€33 million) of the purchase price with the remaining 80% due on delivery of the ship. This deposit was protected by third party guarantees and has now been returned to ICG.
Epsilon to stay?
The huge new ferry was to have capacity for 5,615 lane metres of freight and 1,800 passengers. It would have been the largest capacity vessel on the Dublin – Holyhead route. Delivery had originally been scheduled for the middle of this year, but was subsequently pushed back to the end of the year. The contract termination would appear to mean that the chartered Ro-Pax EPSILON will stay with Irish Ferries for the foreseeable future. The new ship, which had been allocated yard number FSG777, was intended to release EPSILON to be returned to her Italian owner. EPSILON is currently on charter until November this year though ICG has the option to extend this by a year.
Competitor Stena Line introduced STENA ESTRID on sailings opposite EPSILON earlier this year. ‘Estrid’ is currently at Cairnryan undergoing work to one of her main engines but is timetabled to return to service next week. At the time of writing Irish Ferries has not announced any alternative project to replace FSG777. There had been rumours previously that Irish Ferries had been sounding out alternative shipyards in China to build the new ferry.
