The total cost of the project, including the key equipment, is estimated to be close to US$50 million. The Company expects to deliver the jack up rig before the end of the second quarter of 2005. The bulk of the project cost is expected to be settled upon delivery. The balance of the project cost will be settled over a 30-month period from the delivery of the rig. This project is KS Tech's fifth such rig related projects in the last 16 months and it reinforces the Company's position in providing refurbished rigs to meet the offshore drilling requirements of the market.
Mr. Chew Thiam Keng, the Managing Director of KS Tech commented, "We are pleased to be able to provide practical and cost-effective rig solutions for our clients. Given the long lead time and high capital cost of building new rigs, the refurbishment of vintage rigs will continue to remain the answer for many users for the foreseeable future."
The above transaction is expected to have positive material impact on the Group's earnings per share for the financial year ending 31 December 2005. None of the Directors or substantial shareholders has any interest, directly or indirectly, in the above project.
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