Further to the announcement dated July 11, 2008, Neptune Marine Invests AS, a wholly owned subsidiary of Neptune Marine Oil & Gas Limited, had on September 19, 2008 signed a facility agreement with a group of banks to provide a US $290 million term loan to refinance its existing bank loan and to fund the remaining costs in the upgrading of the drillship, the Neptune Explorer.
Under the terms of the Agreement, Tranche A of the facility amounting to US $120 million, is drawn on October 29, 2008 and will be repaid over a 4 year period ending June 10, 2012. Tranche A is secured by, inter alia, a mortgage on the drillship, the Neptune Discoverer.
Tranche B of the facility, amounting to US $170 million, will be available for drawing upon the completion of the upgrading of the Explorer. Tranche B will be secured by, inter alia, a mortgage on the Explorer and will be repaid over a 36 month period.
Currently, the anticipated completion time for the Explorer is around April 2009. The delay in completion is due principally to the decision to replace all the old refurbished engines with new engines. These new engines will enable the Explorer to have a higher level of operating performance when it begins drilling operations. It will also provide an opportunity for the Explorer to operate in deeper waters, thereby enhancing its potential earnings and value.
Three of the five engines, which are supplied by Wartsila Finland OY, have been shipped and are expected to arrive in Singapore by mid November 2008. The remaining two engines have been completed by the supplier and are expected to be shipped in early November 2008.
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