Singapore's EMS to Supply MEP for Rigs to Asia-Based Shipyard for $570M
Singapore's EMS Energy Ltd. (EMS) reported Thursday that the newly-enlarged EMS Group (Enlarged Group), formed as a result of the company's Very Substantial Acquisition (VSA) of the Koastal Group (Koastal), announced that it has signed a binding Letter of Intent (LOI) worth $570 million for the supply, testing and commissioning of up to six sets of Major Equipment Package (MEP) for rigs, each worth $95 million per set. The LOI is signed with a reputable shipyard based in Asia (the Buyer).
This LOI marks a milestone for the Enlarged Group, brought about by the successful integration of the complementary services provided by EMS and Koastal.
“We are heartened with the signing of this LOI as it indicates a strong recognition in the marketplace of the combined strengths and capabilities of our Enlarged Group. Given the weak oil price, having this LOI translate into a firm contract will be a major milestone win for us. With the consolidation of Koastal in the Enlarged Group, we are strengthening our business model – one that stays resilient amid a low oil price regime,” said Ting Teck Jin, executive chairman and chief executive officer, EMS Energy Limited.
The Enlarged Group is expected to enter into formal contracts with the Buyer before Dec. 31, subject to the outcome of exclusive negotiations between the two parties. The delivery schedule for the first set of MEP is expected to be before June 30, 2017. Barring unforeseen circumstances, the contract is expected to have a significant positive impact on the Group’s financial performance for the financial years ending Dec. 31, 2016 to 2019.
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