Scorpion Resolves Semisubmersible Construction Contract
On November 27, 2008 Scorpion Offshore announced that its wholly owned subsidiary, Scorpion
Deepwater Ltd. ('Deepwater'), was unable to secure necessary financing for the construction and delivery of a DSS-38 class semisubmersible ('Deepwater Rig'). Contracts were signed for construction of the Deepwater Rig at Keppel FELS in Singapore and for the provision of the unit's drilling and subsea equipment with third
parties ('Third Party Vendors').
Despite its best efforts, the continuing turmoil in the global credit market has prevented Deepwater from securing the necessary financing to meet its future payment obligations to Keppel FELS and the Third Party Vendors. Accordingly, Deepwater has reached agreement with Keppel FELS and Third Party Vendors to amicably terminate the construction contract and equipment orders on mutually acceptable terms. As a result of these negotiations, the Company's total combined liability for the cancellation of these contracts is not expected to exceed the US $74 million which has been paid by Scorpion to date.
Scorpion and Deepwater are working closely with Keppel FELS and the Third Party Vendors to progress discussions with other parties who have expressed an interest in assuming Deepwater's contracts to construct and equip the semisubmersible. The outcome of these discussions should not affect Deepwater`s financial exposure.
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Company: Scorpion Offshore more info
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