Finland's business daily, Kauppalehti, has exposed the reason for why Russia's United Shipbuilding Corporation has failed to purchase the Arctech Helsinki Shipyard.
In what seemed like a done deal, USC announced last January its intention to buy out the other 50 per cent of the joint venture from the STX's Korean administrators.
And while the sale of STX Finland's Turku yard to Meyer Werft and the Finnish state concluded smoothly last month, the process for the Helsinki yard, which has orders predominantly consisting of ice-class vessels for Russia, has been, well, on ice.
The reason is now clear: USC has still not paid for the 50 per cent it bought back in late 2010, when STX Finland's Helsinki yard was re-named Arctech.
The matter is now so serious (and urgent) that it is currently being sorted out by a Finnish court of arbitration to adjudicate with proceedings held behind closed doors.
These proceedings began back in April, but their secretive nature meant they were not made public.
What is known is that the court's decision will be final with no right of appeal.
STX Finland is demanding payment of an €18 million (US$23.6 million) loan, €1.5 million (US$1.97 million) in share capital, and about €1.6 million (US$2.1 million) in guarantees and interest.
Together, these figures closely match the €20 million (US$26.25 million) that Finnish newspapers reported was the agreed sum at the time of the deal, but neither party confirmed nor denied.
Since then, tranche payment dates have come and gone, but not a single Euro has been forthcoming.
With Turku sold and Rauma closed, the half-ownership of Arctech is STX Finland's final outstanding asset.
At the time of the Turku sale, STX Finland CFO Jukka Tuovila confirmed that money from Turku would be going to parent company STX Europe.
However, as that deal did not include Helsinki (as it had already been earmarked for sale to Russia), when the money will arrive – and where it will go – remains unclear, with neither party willing to comment until the end of arbitration proceedings.
One bright spot is that although USC was on the USA's July list of companies sanctioned due to Russia's role in the Ukraine conflict, Arctech Helsinki Shipyard was not listed. Thus, any putative sale to the state-owned Russian shipbuilder will not be affected by economic sanctions.
John Pagni