SEACOR Marine Holdings Inc. (“SEACOR Marine”), a leading provider of global marine and support transportation services to offshore oil and gas exploration, development and production facilities worldwide, today announced the final formation of SEACOSCO Offshore LLC, a jointly owned Marshall Islands company (“SEACOSCO”) with affiliates of COSCO SHIPPING GROUP, the world’s largest ship owner.
SEACOSCO entered into contracts for the purchase of eight Rolls-Royce designed new construction platform supply vessels (“PSVs”) from COSCO SHIPPING HEAVY INDUSTRY (GUANGDONG) CO., LTD (the “Shipyard”). Six of the PSVs are of UT 771WP design (4,400 tons deadweight) and two are of UT 771CD design (3,800 tons deadweight).
SEACOSCO will take title to seven of the PSVs in 2018 and one in 2019. Thereafter, the Shipyard, at their cost, will store the PSVs at their facility for periods ranging from six to 18 months. The storage period can be shortened by mutual agreement.
Separately, SEACOSCO contracted with Rolls-Royce Marine AS to outfit six of the PSVs with a state-of-the-art battery energy storage system designed to reduce fuel consumption and enhance the safety and redundancy of the vessels’ systems. This follows SEACOR Marine’s recent order for battery energy storage systems on four large PSVs in Mexico.
John Gellert, SEACOR Marine’s Chief Executive Officer, commented: “We are excited to partner with COSCO SHIPPING GROUP. We are confident that we have structured a transaction that meets the needs of the Shipyard while also managing the cash outlay from the equity owners. The acquired vessels will modernize our operating fleet and expand our offerings to our customers. Combining a proven and advanced design, best in category accommodations, and the innovative Rolls-Royce battery system, these vessels will be highly marketable across all major offshore energy regions worldwide.”
SEACOSCO will be funded 30% with equity and 70% with debt financing secured by the PSVs on a non-recourse basis to the equity owners. Aggregate total consideration for the eight PSVs, including the battery system, is approximately $161.1 million. SEACOR Marine’s total cash outlay is approximately $22.4 million, with approximately $20.0 million payable in the first quarter of 2018 and the balance due over the next 14 months as vessels and the Rolls Royce battery equipment are delivered.
SEACOR Marine will be responsible for full commercial, operational, and technical management of the vessels on a worldwide basis under a separate management agreement with SEACOSCO.