Seatrium shares plunge up to 7.8% on US$475 million Maersk Offshore Wind contract termination

This development will likely have a negative near-term impact on the stock, says Citi analyst Luis Hilado

Shares of Seatrium plunged as much as 7.8 per cent on Friday (Oct 10) morning after the company announced the termination of a US$475 million contract for a nearly completed wind turbine installation vessel.

The counter dropped S$0.19 to S$2.25 as at 9.39 am, before inching up and closing at S$2.28, 6.6 per cent down, with 57.2 million shares having changed hands.

The contract was inked with a Maersk Offshore Wind affiliate in 2022 for the construction of a wind turbine installation vessel at the US offshore wind farm, Empire Wind 1. The vessel is about 98.9 per cent complete.

In a bourse filing, Seatrium said that it is evaluating its legal and commercial responses for “wrongful termination” and is exploring “viable solutions”, including with the end-customer, Empire Offshore Wind.

Citi analyst Luis Hilado said: “We believe the development is likely to have a negative near-term impact on the share price.”