Petrofac agrees to sell its JSD 6000 offshore installation vessel
Petrofac has signed an agreement to sell its deepwater derrick lay vessel project JSD 6000 to Shanghai Zhenhua Heavy Industries Co Ltd (ZPMC).
The announcement on Tuesday follows news from March when Petrofac said it would sell the JSD 6000 offshore installation vessel within 12 months, and exit the deep-water market.
Petrofac JSD 6000 vessel was ordered in January 2014 from ZPMC and was supposed to be operational in 2017. However, the contract was then called off in 2015 by Petrofac, a move disputed by ZPMC.
The transaction announced Tuesday, comprises the sale of all JSD6000 related assets held by Petrofac, including the owner furnished equipment, for a gross consideration of $190 million and a 10% interest in a new special purpose vehicle set up to own the vessel once commissioned.
Petrofac said it would provide technical support for the construction of the vessel, which is now expected to complete in 2022. Petrofac will not contribute to the cost of construction, commissioning or testing of the vessel.
The total consideration of US$190 million is offset by a net amount of US$23 million retained by Petrofac under the previous hull and marine contract with ZPMC.
According to Petrofac, the remaining US$167 million net cash consideration will be received as follows: US$92 million within 20 business days; a further US$70 million in stages as assets are physically transferred (expected to be over the period mid-2018 to early 2019); and, a final amount of US$5 million upon commissioning of the vessel. The proceeds from the sale will be used to reduce gross debt, Petrofac said.
Petrofac’s Group Chief Executive Ayman Asfari said: “This agreement materially completes our disposal of the project, in line with our stated intention to exit the deep-water market. 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.”