On Thursday, shares of steel fabricator Gulf Island Fabrication soared by 13% to $3.70 following the settlement of a lawsuit involving its subsidiary Gulf Island Shipyards and Hornbeck Offshore Services. The dispute, which centered around the construction of two multi-purpose supply vessels, was dismissed by the court at the request of both parties.
In the aftermath of this legal resolution, Gulf Island, along with Fidelity & Deposit Co. of Maryland and Zurich American Insurance, entered into a binding term sheet concerning performance bonds and related indemnity agreements for these vessels. As per the terms of this agreement, Gulf Island is set to pay Zurich $20 million plus interest in 15 equal installments starting from December 31, 2024.
Richard Heo, CEO of Gulf Island, expressed that this resolution eliminates a significant distraction for the company and creates a clear path for their focus on business expansion.
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