Havila cancels Norway sailing due to insurance concerns, sanctions on Russia

Havila Kystruten announced on Thursday April 14th had cancelled the next sailing of its Norwegian coastal cruise ship Havila Capella (IMO 9865570) due to concerns that its insurance had been invalidated as a result of the EU’s sanctions against Russia. The ship remained in Bergen, 48 hours after its scheduled departure on an Easter cruise along the Norwegian coast.

News that the cruise had been cancelled came after Havila said that it would refinance its operations after the sanctions were expanded to include Russian-owned leasing company GTLK, which is financing the company’s four cruise ships.

Havila Kystruten CEO Brent Martini said that “we are disappointed that there was no solution”, noting that “the Ministry of Foreign Affairs has concluded that our liability insurance is not compatible with the sanction provisions.”

The company noted that its hull insurance remains in place, with the liability insurance the only issue.

The potential insurance snag only emerged on April 12th, after a reported 232 passengers had boarded the cruise ship ahead of their planned round-trip voyage from Bergen to Kirkenes and back. Havila Kystruten said that it was “seeking clarification” from Norway’s Ministry of Foreign Affairs on the matter.

The EU included GTLK in the sanctions, stating that the company was both Russian-owned and had direct ties to the Russian government. They reported that both Vladimir Putin and several influential Russian businessmen were on the board of the company and said the company could be directly contributing to financing the government and its war efforts.

Havila contends that the Havila Capella is a Norwegian ship, with no ties to Russia. The company said that it operated the ship and that it met all of Norway’s requirements. Previously they said that the only connection to Russia was that they were making lease payments on the first ship to GTLK.

The company noted that the ship was registered in Norway and approved by the Norwegian authorities and satisfies all requirements in the Norwegian Maritime Act. “Even though we have paid rent to a Russian-owned company, the ship is Norwegian for all practical purposes,” Martini said.

Initially, Havila thought that it had indications from the Norwegian government that the sanction provisions would not preclude the normal operation of the company’s vessels. Havila said that it was looking for a solution “to get Havila Capella back into operation as soon as possible.” The next cruise is scheduled to depart Bergen on April 23rd.

A second cruise ship, the Havila Castor (IMO 9865582), was also due for delivery from the Tersan shipyard in Turkey. with the ship’s maiden voyage scheduled to depart Bergen on May 10th. Havila noted that the ship remained owned by the shipyard until delivery, but indicated that it expected to proceed with the delivery as planned, while they were looking to refinance the operation. Two additional cruise ships are also due for delivery in the second half of 2022. Both these have also been financed by agreements with GTLK.

“We support the authorities’ sanctions against Russia and comply with sanction provisions set by the authorities,” said Bent Martini, CEO of Havila Kystruten. “We are now working to refinance Havila Capella to break all ties with sanctioned and Russian-owned companies,” he said while noting that it would also require alternates for the three other ships still under construction at the Tersan shipyard in Turkey.

Martini says “We had assessed what has now happened as a possible outcome and have for a period worked to find alternative financing for our coastal cruise ships.” Martini said that it was difficult to time when new financing would be put in place, but Havila planned to take delivery of the Havila Castor on schedule.

Havila Castor had been scheduled to enter service on April 7th but the maiden voyage was rescheduled for May 10th before the Russian financing problem emerged.

The third vessel Havila Polaris (IMO 9946910), was currently expected to be ready for delivery during Q3 this year, while the fourth, Havila Pollux (IMO 9946922), was scheduled for delivery in Q4.

 “With the experiences we had so far, there is uncertainty about the exact date of delivery of these ships,” Martini admitted.

221-built, Norway-flagged, 15,519 gt Havila Capella is owned by GTLK Asia M11 Ltd care of manager Havila Kystruten Operations AS of Fosnavaag, Norway. It had previously been entered with Gard (according to Equasis). No current P&I entry. As of April 18th the vessel was moored in Bergen.

2022-built, Norway-flagged, 15,812 gt Havila Castor is owned by HK Ship II AS care of manager Havila Kystruten Operations AS of Fosnavaag, Norway.