Sevan Marine Drafts letter of Intent
In its capacity as lender under its MUSD 60 convertible loan agreement (the “Convertible”) with Logitel Offshore Pte Ltd, Sevan has entered into a tri-partite letter of intent (the “LOI”) with Teekay Offshore Partners LP (“TOO”) as buyer and Cefront Technology AS (“Cefront”) as seller of all of the shares in Logitel Offshore Holdings AS (“Logitel”), which owns two hulls that are currently being converted into floating accommodation units (“FAUs”) at the COSCO (Nantong) Shipyard (“COSCO”) and options to order up to six additional FAUs. TOO intends to utilize Sevan’s technology to build a position in the floating accommodation market.
Under the terms of the LOI, Sevan will be relieved from its exposure as “intervening party” under Logitel’s employment contract with Petrobras in respect of FAU no 1.
The LOI also entails that the repayment profile and maturity for the Convertible is amended to six instalments of MUSD 10, payable not later than six months after delivery of the relevant FAU from the COSCO yard. Sevan will also receive license fees and provide services, as further FAUs are built by TOO.
The LOI is expected to become effective and formally documented within two months.
CEO Carl Lieungh commented, “We are pleased to see the use of the Sevan design in yet another offshore application with the potential for growth. This demonstrates the flexibility and universal performance advantages of the cylindrical design. This transaction also represents the final step in the risk mitigating exercise relative to the semi-completed hulls with substantial attached liabilities formerly owned by Sevan. It helps clean up Sevan’s balance sheet with clearer visibility to our asset-light business model, while still recognising that a part of the convertible loan and license fees are dependent on Teekay Offshore’s expansion in the floating accommodation market.”
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