Cosco, KS Energy May Sell KS Orient Star 2 if Offer Covers Building Cost
Cosco Corporation (Singapore) Limited (the Company) referred Monday to the Company’s announcements May 26, 2011 and July 10, 2015 in relation to the building contract to build 2 units of jackups based on the LeTourneau Workhorse Class design, signed between Cosco (Nantong) Shipyard Co., Ltd. (Cosco Nantong) (a subsidiary of the Company’s 51 percent owned subsidiary, Cosco Shipyard Group Co., Ltd.) and KS Drilling Pte Ltd. (the Owner).
The Board wishes to announce that, in light of current unfavorable market conditions, the Owner and Cosco Nantong have mutually agreed to further extend, by way of a further amendment agreement, the time for delivery of the undelivered rig bearing hull number N408 or KS Orient Star 2 (400' ILC) (which is ready for delivery) from April 30, 2016 until Dec. 31, 2017, on mutually agreed terms and conditions. Either party remains entitled to sell the Rig to a third party if the offer could recover their respective costs, or the parties could negotiate in good faith for a compromise solution to sell the Rig.
The Company is not able to ascertain the financial impact of the above amendment at this point in time as there is still no certainty as to how the Rig will be eventually dealt with after the further amendment agreement.
The Company will make announcements of any significant development in this matter at the appropriate junctures.
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