OPE Holdings has reached a binding agreement (subject to the satisfaction of various conditions) to sell the assets of its offshore engineering division (the "Engineering Sale Transaction") based in Houston, Texas and in Trinidad & Tobago to Foster Wheeler USA Corporation ("Foster Wheeler") of Houston, Texas.
The base sale price of the engineering division is $9,000,000 US, with an additional $2,000,000 US payable if Foster Wheeler elects to acquire the Corporation's interest in OPE Malaysia pursuant to an option that will extend 90 days from closing of the Engineering Sale Transaction and an additional $500,000 US payable if the engineering divisions meets a specified performance target within a year of the sale.
The engineering business represents one of the two principal lines of the business of the Corporation. The Corporation's other main line business is the ongoing development and commercialization of the Corporation's proprietary SSP(R) offshore platform technology. The proposed Engineering Sale Transaction will provide the Corporation with the ability to focus exclusively on the opportunities and challenges of the SSP(R) program and will provide significant working capital resources to fund such activities.
"It was a very difficult decision to sell the engineering division and it was a conclusion that management or the Board of Directors did not reach without a lot of thought and analysis," reported Gary Quenan, President and CEO of the Corporation. "The depressed state of the global equity and debt markets for development-stage companies has significantly limited our financing options for advancing the SSP(R) at the current time. All things considered, we have continued to make material progress in the SSP(R) commercialization plan over the past few months notwithstanding the difficult economic climate. We believe that it is critical for the Corporation to source the funds necessary to continue to build on the momentum of the SSP(R) program and to remove the distraction of managing two independent lines of business during this challenging economic climate."
"We believe that we have considered all reasonable options for advancing our business over the past few months, and the proposed Engineering Sale Transaction with Foster Wheeler represents the best available alternative. We value all the employees in our engineering division and greatly appreciate their contribution to the Corporation. We believe that they will have a great opportunity to flourish as a part of a highly respected organization, as Foster Wheeler continues its strategic growth initiative in the upstream oil and gas arena."
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