Norway’s Siem Offshore Inc. entered into a long-term cooperation agreement with Singa Star Pte Ltd., an unrelated Singapore-based company involved in the ownership and operation of various types of vessels within the global shipping industry as announced on October 30, 2007.
As part of the agreement, Siem Offshore exercised its option to enter into construction contracts for two additional large anchor handling tug supply vessels (AHTSs) with Kleven Verft AS for approximately US$205 million. The vessels are scheduled for delivery in the fourth quarter of 2010. Singa Star will acquire the contracts from Siem Offshore, and Siem Offshore will supervise the shipbuilding and be the technical manager for the vessels.
Siem Offshore has the option to buy back the second of the two contracts based on the contract value with logical adjustments for interests and additional out-of-pocket expenses incurred by Singa Star.
The two newbuild AHTSs will be included in a pool with 10 similar vessels already under construction for Siem Offshore. The vessels in the pool will be managed by Siem Offshore.
The vessels are of Vik-Sandvik VS 491 CD design and will have 28,000 bhp, a bollard pull of 300 tons (272 tonnes), winch of 500 tons (454 tonnes), accommodations for 60 and full platform supply vessel capacities. The engine configuration will enable both diesel mechanical and diesel electric propulsion.
Also under the terms of the agreement, Singa Star agreed to subscribe for 30 million new shares of Siem Offshore at a subscription price of around US$18.12 per share, equivalent to gross proceeds of approximately US$101.5 million. The new shares are expected to be issued in early December, following which, Singa Star will have an 11.82 percent stake in Siem Offshore. Proceeds will be used to finance the construction of the vessels Siem Offshore has under construction.
