HD Korea Shipbuilding & Offshore Engineering Co. said Tuesday it has canceled a 416.9 billion-won ($313 million) order to build two passenger ships for a New Zealand state ferry operator.

The contract was canceled at the request of KiwiRail Holdings Ltd., a New Zealand state-owned enterprise responsible for rail operations and operating interisland ferries, the South Korean shipbuilding giant said in a regulatory filing.

HD Korea Shipbuilding had clinched the deal from KiwiRail in 2021, but it had not started work on the ships.

The shipbuilder said it will hold negotiations with the New Zealand company on detailed issues after the contract cancellation, including a claim for design costs.

HD Korea Shipbuilding, a subholding company of shipbuilding, oil refining and machinery conglomerate HD Hyundai, has three domestic units under its wing -- HD Hyundai Heavy Industries Co., Hyundai Mipo Dockyard Co. and Hyundai Samho Heavy Industries Co. (Yonhap)