24th Apr 2018 08:36
LONDON (Alliance News) - Oil and gas industry services provider Petrofac Ltd said Tuesday it has sold its JSD6000 vessel project to Shanghai Zhenhua Heavy Industries Co Ltd for USD190 million.
The transaction will see Petrofac sell the project through its subsidiary Petrofac International (UAE) LLC.
JSD6000 - a deepwater derrick lay vessel - will be sold including all furnished equipment for USD190 million.
Petrofac will provide technical support for the construction of the vessel which is expected to complete in 2022. It will not, however, contribute to the cost of construction and commissioning.
Of this, USD23 million will be offset after funds retained by Petrofac under a previous contract with Shanghai Zhenhua. Of the remainder, USD92 million will be received within 20 days of completion of the transaction. A further USD70 million will be received as assets are transferred which is expected to complete by early 2019 and a final USD5 million on commissioning of the vessel.
Petrofac will also be entitled to a 10% interest in a special purpose vehicle set up to own the vessel once it is commissioned.
The proceeds from the sale will be used by Petrofac to reduce its debt. In 2017, Petrofac generated USD542 million pretax profit on USD6.40 billion revenue. Net debt stood at USD600 million.
"This agreement materially completes our disposal of the project, in line with our stated intention to exit the deep-water market," Petrofac Chief Executive Officer Ayman Asfari said. "It is a further positive step in the execution of our stated strategy to focus on our core strengths, deliver organic growth and reduce capital intensity."
Shares in Petrofac were 0.8% higher at 624.00 pence on Tuesday.
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