In conjunction with the above transactions, two of the companies in the KSES group will also provide a host of services encompassing offshore and rig consultancy, procurement and asset management, crew and personnel support as well as general support services for three years ("Rig Management and Service Contracts"). The Rig Management and Service Contracts, with a total value of approximately US$34.5 million, is expected to commence in June 2005.
In August 2004, the Company announced that its 80% owned subsidiary, Atlantic Esbjerg Holding Pte Ltd had entered into a 50:50 joint venture with Atlantic Marine Offshore Services to form AEL and AMS Denmark. AMS Denmark secured a 3-year charter contract from Maersk Olie og Gas AS to procure, upgrade, deploy, operate and manage an accommodation platform in the North Sea. The total value of the charter contract was approximately Euro 50 million. The accommodation platform has been successfully upgraded and is currently on tow for deployment in Esbjerg, Denmark. The accommodation platform is expected to be operational by June 2005.
Mr. Chew Thiam Keng, the Managing Director of KSES commented, "The completion of the sale of the accommodation platform by AEL will allow KSES to book a gain in FY2005. In addition, the sale will free up capital and together with the gain, we expect to deploy these financial resources in other rig related projects at a later date. With the expected completion of the sale of accommodation platform, we will not have associate income from our 40% share of AEL but the Rig Management and Service Contracts will provide a new revenue source to the Group. Profit contribution from the Rig Management and Service Contracts is expected to at least match the 40% associate income from the Maersk charter contract had the accommodation platform not been sold."
The above transactions are expected to have positive material impact on the earnings per share and net tangible asset per share of the Group for the financial year ending 31 December 2005. None of the Directors or substantial shareholders has any interest, directly or indirectly, in the above transactions.
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