DeepOcean to Purchase Arbol Grande for EUR 28.75 Million
Arbol Grande is owned by North Sea Commander Shipping AS, a subsidiary of North Sea Shipping AS (`NSS`). According to an agreement with NSS, DeepOcean has the option to purchase the vessel at a price of EUR 28.75 million on 9 June 2008. DeepOcean has now notified NSS its intention to exercise the option. 10 % of the payment will be made at signing of the final agreement with NSS (estimated in February 2008) and the remaining payment will be done at delivery in June 2008. The transaction will be fully financed through a new bank facility in DeepOcean.
The acquisition is in accordance with DeepOcean`s strategy to increase the number of owned vessels. Further, the price of the vessel corresponds to approximately 52 % of the market value of the vessel.
Arbol Grande was built in 2003 and is a general construction and subsea support vessel with dynamic positioning II. It is 94 meter long with an accommodation capacity of 199 persons. Currently, the vessel is operating as an inspection, maintenance and repair vessel for Constructora Subacuática Diavaz in Mexico.
As DeepOcean has decided to exercise the option to purchase Arbol Grande, the vessel will be accounted for as a financial lease in accordance with IAS 17, with effect from 1 January 2007. Consequently, the quarterly financial statements for the first three quarters in 2007 will be changed. For the first nine months of 2007 EBITDA increases with NOK 27 million, EBIT increases with NOK 18 million and Net Earnings increases with NOK 9 million. The full effects on the financial statement including profit & loss, balance sheet, equity reconciliation, cash flow statement and segment reporting are shown in the attached document.