At 2211 local time on Saturday (1111 UTC) Henri Lloyd informed the Clipper Race Office of its intention to retire from Race 6/ The Rolex Sydney Hobart Yacht Race.
Clipper Race Director Justin Taylor explained: "This is due to a damaged rudder bearing which is allowing excessive movement of the rudder shaft.
"The skipper is making a seaman-like decision to retire and motor sail into the comparatively calmer waters off Flinders Island before altering course for Hobart.
"This is in an effort to prevent further damage to the rudder bearing. The yacht is not in any danger and should make Hobart without any outside assistance.
"We are monitoring the situation and are in regular contact with the skipper."
Skipper Eric Holden said: "It is obviously a big disappointment to have gone from leading the Clipper 70 fleet in the Sydney to Hobart race one minute to being forced to retire the next. It has also cost us the lead in the overall standing of the Clipper Round the World race. We are a strong competitive team and we will bounce back from this adversity so don't bet against us just yet."
Henri Lloyd is currently at the top of the overall Clipper Race leader board, so this will be a big setback to their campaign as well as ending Holden’s fourth RSHYR prematurely.