Cosco Nantong Shipyard, a subsidiary of CSG, has sealed the EPC contract from Belgian shipping Giant, Exmar NV, to build a high standard accommodation barge valued at US$38.2 million. The new barge will be ABS (American Bureau of Shipping) class with offshore standard and be capable of accommodating about 360 personnel. It will be deployed in oil and gas exploration sites off the Western African coast. Under the agreement, Exmar NV has secured the option for one additional barge. Construction of the accommodation barge will commence immediately at Cosco Nantong shipyard and is scheduled for delivery in the third quarter of 2008.
CSG was also awarded five conversion projects from the Norwegian shipping giant Front Line to convert five suezmax tankers into five semi-submersible HLVs. These conversion contracts, totaling US$157.1 million in value, will be undertaken at Cosco Zhoushan, Guangzhou and Nantong shipyards. Each project takes between 3 to 6 months to complete. The semi-submersible HLVs are targeted for progressive deliveries before October 2008.
Mr. Ji Hai Sheng, Vice Chairman and President of the Company and Vice Chairman of Cosco Shipyard Group, said:
"These semi-submersible HLV conversion projects are high-yielding and can be quickly turned around. These projects therefore provide good returns within a relatively short time. The EPC contract is another valuable addition to our bulging marine engineering order book, which showcases our strong capabilities in a wide range of marine engineering work. Going forward, we are confident of improving our profit margins as the Group gain further experience in offshore engineering projects and improve on our operational efficiency."
None of the directors or controlling shareholders of the Company has any interest, direct or indirect in the contract.
The contracts are not expected to have a significant impact on the net tangible assets (NTA) and earnings per share (EPS) of the Company for the year ending 31st December 2007.
Cosco Corporation is a diversified group with core activities in shipping and shipping-related services. The Group owns bulk carriers and a majority stake in the largest shipyard group in China, operates shipping agencies, and provides marine engineering and ship repair services. Cosco Corporation is the listed subsidiary of China Ocean Shipping (Group) Company, the largest shipping group in China.
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