The agreement will generate a profit to Hallin of approximately $9 million in the financial year 2008 and will enable the Company to operate the vessel for 10 years under a bare-boat charter.
Oslo based marine group RS Platou has set up a company to buy the Ullswater and to charter it to Hallin Marine at a very competitive fixed rate for the duration of the charter.
Hallin will receive an immediate initial payment of $5million, with the balance on completion, which is currently scheduled for October 2008, when the construction of the Ullswater is completed and the vessel has passed sea trials. Funds received at completion will be utilised in part to pay off the outstanding balance due under the existing vessel financing arrangements.
The Ullswater, a 78 meter DP2 Subsea Operations vessel, is currently being built by Pan-United Marine Limited at its yard in Singapore.
The charter will commence immediately upon the completion of the sale of the Ullswater and, together with Hallin's existing long-term charter of the vessel the Sanko Angel, gives the Company a firm basis on which to deliver its strategic plans for the future.
Hallin intends to use the surplus funds from the sale of the Ullswater to accelerate the Group's capital expenditure plans. The Company is considering the commissioning of a further vessel, subject to receiving suitable delivery and cost quotations. Under the terms of the sale agreement Hallin could draw down a further $5million of the balance of the purchase price in advance should it place an order for a further vessel.
In view of the size of the transaction relative to the Group, the sale of the Ullswater is subject to approval by Hallin shareholders at an EGM to be convened for this purpose on Wednesday, August 8th. A circular giving further information is being posted to shareholders shortly.
John Giddens, Chief Executive of Hallin, said: 'Our foresight and flexible approach to the ownership and operation of assets has enabled us to grasp the opportunity currently presented by the significant uplift in the price of vessels such as the Ullswater, despite the significant cost increases in materials and major components experienced during the construction period.
'We will use the resulting benefit to acquire and operate other capital assets and to accelerate the rate of profitable growth for the whole of the Group.
'Our policy of making strategic profitable capital disposals when favorable opportunities arise is enabling us to expand our overall asset base at a faster rate. This approach, coupled with the managing and operating of purpose-built vessels, is a key plank in ensuring the continued rapid and profitable growth of our business by being able to offer clients the requisite package of vessels, subsea intervention equipment and skilled staff to meet their development programs.'
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