Posted by ageetkumar > 2016-03-11 17:44 | Report Abuse

I agree with most of the writer's observations except for the compensation. Usually in a contract like this the termination fees are so high such that the project IRR is usually improved if the contract is terminated early rather than serving out the full term of the contract. I other words it is higher than even the figure given by Daily charter rate x number of remaining days in firm contract. Now Armada will not get paid this amount if the client has reasonable grounds for termination. From what I hear there were definitely issues on the asset but nothing that will warrant a termination. So Armada's position is quite good on this. But do expect a long drawn out court battle on this before it is finally settled.