<![CDATA[Odfjell SE]]>
In 2004 Odfjell placed contracts with the large Russian "Sevmash" shipyard, located near Archangelsk, for up to twelve 45,000 tdw IMO type II coated product/chemical carriers.
The initial fixed total contract price for all twelve vessels was approximately
USD 500 million, later increased to USD 544 mill.
Following serious delays in the construction process, combined with demands for further price increases from the Yard, continuous cooperation problems as well as protracted negotiations, Odfjell decided today to serve formal notice of cancellation to Sevmash. The instalments already paid are covered by standard refund guarantees from international banks. Odfjell will further claim full compensation for its costs and losses caused, on account of wilful misconduct and massive contract breaches by the Yard.
Unless the matter is solved amicably between the parties, the issue will be solved by arbitration in Sweden, as provided for in the contract.
Bergen, February 21, 2008  
Contact person :
Terje Storeng
Phone + 47 55 27 00 00