NCL confirms Lloyd Werft penalty

Lloyd Werft will pay Norwegian Cruise Line €29M ($36.3M) in compensation for the 13-month delivery delay of the Pride of America, documents filed yesterday reveal. While under construction at the Bremerhaven yard, the Pride of America partially sank during a severe storm in January 2004. The NCL/Lloyd Werft compensation deal – which was said to be finalised last month – is slightly lower than the sum originally announced by NCL. According to an October 2005 NCL prospectus, Lloyd Werft had previously agreed to pay NCL €30M in compensation “subject to various provisions, including savings realised from renegotiations with subcontractors, subsequent profits, etc.” Following the Pride of America sinking, Lloyd Werft filed for bankruptcy protection and a settlement agreement was reached in July 2004 whereby Lloyd Werft would use its insurance proceeds – combined with €165M ($213M at 2004 rates) in additional construction payments from NCL – to complete and repair the water-logged newbuild.