GEOS-ME secures charter extension for Energy Scout, a right to acquire two new MPSVs and mandate advisors
Golden Energy Offshore Services AS (ticker: “GEOS-ME”) (the “Company”) has agreed to enter into an agreement with Nantong Rainbow Offshore & Engineering Equipments Co., Ltd (“ROC”) securing the right (on certain terms and conditions) to acquire two newbuild PX 121H Multipurpose Platform Supply Vessels (“MPSVs”) at attractive terms.
Pursuant to the terms and conditions of the agreement, the Company secures the right to acquire the MPSVs to be utilized latest end of January 2019. Arctic Securities AS and Fearnleys Securities AS are mandated as joint managers (the “Managers”) for the Company for the purpose of raising equity and/or other alternative capital for the financing of the acquisition of the MPSVs. The financing structure, terms and timing have not been determined.
The Company has received support from shareholders representing a substantial portion of the existing share capital to proceed to grow the Company in anticipation of a possible recovery of the market. An increase of the Company’s fleet with two high spec newbuild MPSVs is expected to be one of the key drivers for such growth, and thereby a major step for the Company in its pursuit of its business plan to create shareholder value.
The newbuild PX 121 H MPSVs are versatile vessels capable of low cost upgrade to IMR and the offshore renewables market. Golden Energy Offshore Management AS has had building supervision of the vessels during their construction and acknowledge the quality of these MPSVs. Golden Energy Offshore Management AS shall supervise the finalisation of the MPSVs at the yard on behalf of the Company and start marketing the vessels for work pursuant to management agreements to be entered into.
The Company has agreed a purchase price for each vessel of USD 17,900,000 and the Company has an option to acquire the MPSVs with a Seller’s Credit of 40% of the purchase price with no amortization before bullet payment two years after delivery. Should the Company elect to draw under the Seller Credit, a fee of USD 200,000 per vessel is payable and the credit will come at a cost of LIBOR plus 2,5% p.a. on any outstanding amount. As mentioned above, the Company plans to raise equity to finance the MPSVs. To secure the right to acquire the Vessels under the agreement, the Company has paid a down payment of 5% by utilizing a portion of the excess liquidity generated from the continued charters of the Company’s two existing vessels.
The Company will continue looking for opportunities to grow the fleet with modern quality offshore vessels at attractive prices enabling the Company to benefit from the strong interest in the market for vessels managed by Golden Energy Offshore Management AS together with an expected normalisation of the OSV market.
CEO Per Ivar Fagervoll comment as follows: “I am very pleased that we have been able to reserve these two vessels. The team at Golden Energy Offshore Management AS, Ulstein Design and ROC made the specifications for the MPSVs. I am sure that the market will welcome these environmental friendly vessels where focus on safety and comfort for the crew, energy - and cost efficient solutions will fit the demand in the PSV market as well as in the light IMR market and the offshore renewable market. The MPSVs will presumably be among the youngest vessels available in the market for a long time and will upon delivery enter in fierce competition with older vessels. This step is the first step of many to secure quality vessels to create additional shareholder value in the Company and I expect this to create additional investor interest in the Company’s shares”.
Chairman Sten L. Gustafson comment as follows: “We are excited about the opportunity this transaction presents to create shareholder value through taking advantage of our strong balance sheet to make strategic acquisitions at attractive prices. Being able to add newbuild vessels like these should position Golden Energy Offshore Services well to benefit from the improving OSV market”.
The agreement includes a right to terminate the contract with ROC at with no additional fees payable should the market during second half of 2018 not develop favourably. No decision has been made to launch a possible equity raise or other financing, and the structure, terms and conditions of a possible equity raise or other financing have not yet been determined. Any increase in the share capital of the Company and the issuance of new shares will require approval of by the Company’s extraordinary general meeting.
The Company has also secured a three (3) months extension in direct continuation of the current charter with Total Nigeria as end user of the Energy Scout. Energy Scout has therefore firm employment until 1 October 2018 and the charterer has an option to extend the charter in an additional 3 months period.
Arctic Securities AS («Arctic») and Fearnley Securities AS («Fearnley») are acting as financial advisor to the Company Advokatfirmaet BAHR AS («BAHR») is acting as legal advisor.
"Energy Dutchess"
Foto: Ukjent via Golden Energy Offshore
Golden Energy Offshore Services AS (ticker: “GEOS-ME”) (the “Company”) has agreed to enter into an agreement with Nantong Rainbow Offshore & Engineering Equipments Co., Ltd (“ROC”) securing the right (on certain terms and conditions) to acquire two newbuild PX 121H Multipurpose Platform Supply Vessels (“MPSVs”) at attractive terms.
Pursuant to the terms and conditions of the agreement, the Company secures the right to acquire the MPSVs to be utilized latest end of January 2019. Arctic Securities AS and Fearnleys Securities AS are mandated as joint managers (the “Managers”) for the Company for the purpose of raising equity and/or other alternative capital for the financing of the acquisition of the MPSVs. The financing structure, terms and timing have not been determined.
The Company has received support from shareholders representing a substantial portion of the existing share capital to proceed to grow the Company in anticipation of a possible recovery of the market. An increase of the Company’s fleet with two high spec newbuild MPSVs is expected to be one of the key drivers for such growth, and thereby a major step for the Company in its pursuit of its business plan to create shareholder value.
The newbuild PX 121 H MPSVs are versatile vessels capable of low cost upgrade to IMR and the offshore renewables market. Golden Energy Offshore Management AS has had building supervision of the vessels during their construction and acknowledge the quality of these MPSVs. Golden Energy Offshore Management AS shall supervise the finalisation of the MPSVs at the yard on behalf of the Company and start marketing the vessels for work pursuant to management agreements to be entered into.
The Company has agreed a purchase price for each vessel of USD 17,900,000 and the Company has an option to acquire the MPSVs with a Seller’s Credit of 40% of the purchase price with no amortization before bullet payment two years after delivery. Should the Company elect to draw under the Seller Credit, a fee of USD 200,000 per vessel is payable and the credit will come at a cost of LIBOR plus 2,5% p.a. on any outstanding amount. As mentioned above, the Company plans to raise equity to finance the MPSVs. To secure the right to acquire the Vessels under the agreement, the Company has paid a down payment of 5% by utilizing a portion of the excess liquidity generated from the continued charters of the Company’s two existing vessels.
The Company will continue looking for opportunities to grow the fleet with modern quality offshore vessels at attractive prices enabling the Company to benefit from the strong interest in the market for vessels managed by Golden Energy Offshore Management AS together with an expected normalisation of the OSV market.
CEO Per Ivar Fagervoll comment as follows: “I am very pleased that we have been able to reserve these two vessels. The team at Golden Energy Offshore Management AS, Ulstein Design and ROC made the specifications for the MPSVs. I am sure that the market will welcome these environmental friendly vessels where focus on safety and comfort for the crew, energy - and cost efficient solutions will fit the demand in the PSV market as well as in the light IMR market and the offshore renewable market. The MPSVs will presumably be among the youngest vessels available in the market for a long time and will upon delivery enter in fierce competition with older vessels. This step is the first step of many to secure quality vessels to create additional shareholder value in the Company and I expect this to create additional investor interest in the Company’s shares”.
Chairman Sten L. Gustafson comment as follows: “We are excited about the opportunity this transaction presents to create shareholder value through taking advantage of our strong balance sheet to make strategic acquisitions at attractive prices. Being able to add newbuild vessels like these should position Golden Energy Offshore Services well to benefit from the improving OSV market”.
The agreement includes a right to terminate the contract with ROC at with no additional fees payable should the market during second half of 2018 not develop favourably. No decision has been made to launch a possible equity raise or other financing, and the structure, terms and conditions of a possible equity raise or other financing have not yet been determined. Any increase in the share capital of the Company and the issuance of new shares will require approval of by the Company’s extraordinary general meeting.
The Company has also secured a three (3) months extension in direct continuation of the current charter with Total Nigeria as end user of the Energy Scout. Energy Scout has therefore firm employment until 1 October 2018 and the charterer has an option to extend the charter in an additional 3 months period.
Arctic Securities AS («Arctic») and Fearnley Securities AS («Fearnley») are acting as financial advisor to the Company Advokatfirmaet BAHR AS («BAHR») is acting as legal advisor.
"Energy Dutchess"
