HOUMA, La.--(BUSINESS WIRE)--SEACOR Marine Holdings Inc. (NYSE:SMHI) (“SEACOR Marine”), a leading provider of global marine and support transportation services to offshore oil and gas exploration, development and production facilities worldwide, today announced the final formation of SEACOSCO Offshore LLC, a jointly owned Marshall Islands company (“SEACOSCO”) with affiliates of COSCO SHIPPING GROUP, the world’s largest ship owner.
SEACOSCO entered into contracts for the purchase of eight Rolls-Royce designed new construction platform supply vessels (“PSVs”) from COSCO SHIPPING HEAVY INDUSTRY (GUANGDONG) CO., LTD (the “Shipyard”). Six of the PSVs are of UT 771WP design (4,400 tons deadweight) and two are of UT 771CD design (3,800 tons deadweight).
SEACOSCO will take title to seven of the PSVs in 2018 and one in 2019. Thereafter, the Shipyard, at their cost, will store the PSVs at their facility for periods ranging from six to 18 months. The storage period can be shortened by mutual agreement.
Separately, SEACOSCO contracted with Rolls-Royce Marine AS to outfit six of the PSVs with a state-of-the-art battery energy storage system designed to reduce fuel consumption and enhance the safety and redundancy of the vessels’ systems. This follows SEACOR Marine’s recent order for battery energy storage systems on four large PSVs in Mexico.
John Gellert, SEACOR Marine’s Chief Executive Officer, commented: “We are excited to partner with COSCO SHIPPING GROUP. We are confident that we have structured a transaction that meets the needs of the Shipyard while also managing the cash outlay from the equity owners. The acquired vessels will modernize our operating fleet and expand our offerings to our customers. Combining a proven and advanced design, best in category accommodations, and the innovative Rolls-Royce battery system, these vessels will be highly marketable across all major offshore energy regions worldwide.”
SEACOSCO will be funded 30% with equity and 70% with debt financing secured by the PSVs on a non-recourse basis to the equity owners. Aggregate total consideration for the eight PSVs, including the battery system, is approximately $161.1 million. SEACOR Marine’s total cash outlay is approximately $22.4 million, with approximately $20.0 million payable in the first quarter of 2018 and the balance due over the next 14 months as vessels and the Rolls Royce battery equipment are delivered.
SEACOR Marine will be responsible for full commercial, operational, and technical management of the vessels on a worldwide basis under a separate management agreement with SEACOSCO.
Forward Looking Statements
Certain statements discussed in this release as well as in other reports, materials and oral statements that the Company releases from time to time to the public constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “believe,” “plan,” “target,” “forecast” and similar expressions are intended to identify forward-looking statements. Such forward-looking statements concern management’s expectations, strategic objectives, business prospects, anticipated economic performance and financial condition and other similar matters. These statements are not guarantees of future performance and actual events or results may differ significantly from these statements. Actual events or results are subject to significant known and unknown risks, uncertainties and other important factors, including decreased demand and loss of revenues as a result of a decline in the price of oil and resulting decrease in capital spending by oil and gas companies, an oversupply of newly built offshore support vessels, additional safety and certification requirements for drilling activities in the U.S. Gulf of Mexico and delayed approval of applications for such activities, the possibility of U.S. government implemented moratoriums directing operators to cease certain drilling activities in the U.S. Gulf of Mexico and any extension of such moratoriums, weakening demand for the Company’s services as a result of unplanned customer suspensions, cancellations, rate reductions or non-renewals of vessel charters or failures to finalize commitments to charter vessels in response to a decline in the price of oil, increased government legislation and regulation of the Company’s businesses could increase cost of operations, increased competition if the Jones Act and related regulations are repealed, liability, legal fees and costs in connection with the provision of emergency response services, such as the response to the oil spill as a result of the sinking of the Deepwater Horizon in April 2010, decreased demand for the Company’s services as a result of declines in the global economy, declines in valuations in the global financial markets and a lack of liquidity in the credit sectors, including, interest rate fluctuations, availability of credit, inflation rates, change in laws, trade barriers, commodity prices and currency exchange fluctuations, the cyclical nature of the oil and gas industry, activity in foreign countries and changes in foreign political, military and economic conditions, including as a result of the recent vote in the U.K. to leave the European Union, changes in foreign and domestic oil and gas exploration and production activity, safety record requirements, compliance with U.S. and foreign government laws and regulations, including environmental laws and regulations and economic sanctions, the dependence on several key customers, consolidation of the Company’s customer base, the ongoing need to replace aging vessels, industry fleet capacity, restrictions imposed by the Jones Act and related regulations on the amount of foreign ownership of the Company’s Common Stock, operational risks, effects of adverse weather conditions and seasonality, adequacy of insurance coverage, the ability to remediate the material weaknesses the Company has identified in its internal controls over financial reporting, the attraction and retention of qualified personnel by the Company, and various other matters and factors, many of which are beyond the Company’s control as well as those discussed in “Risk Factors” included in the Information Statement filed as Exhibit 99.1 to Amendment No. 3 to the Company’s Registration Statement on Form 10 and other reports filed by the Company with the SEC. It should be understood that it is not possible to predict or identify all such factors. Consequently, the preceding should not be considered to be a complete discussion of all potential risks or uncertainties. Forward-looking statements speak only as of the date of the document in which they are made. The Company disclaims any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which the forward-looking statement is based, except as required by law. It is advisable, however, to consult any further disclosures the Company makes on related subjects in its filings with the Securities and Exchange Commission, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K (if any). These statements constitute the Company’s cautionary statements under the Private Securities Litigation Reform Act of 1995.
About SEACOR Marine
SEACOR Marine provides global marine and support transportation services to offshore oil and gas exploration, development and production facilities worldwide. SEACOR Marine currently operates a diverse fleet of offshore support and specialty vessels that deliver cargo and personnel to offshore installations; handle anchors and mooring equipment required to tether rigs to the seabed; tow rigs and assist in placing them on location and moving them between regions; provides construction, well workover and decommissioning support; and carry and launch equipment used underwater in drilling and well installation, maintenance and repair. Additionally, SEACOR Marine’s vessels provide accommodations for technicians and specialists, safety support and emergency response services.
Please visit SEACOR Marine’s website at www.seacormarine.com for additional information.
About COSCO SHIPPING GROUP
The total fleet of COSCO SHIPPING GROUP comprises of 1114 vessels with a capacity of 85.32 million DWT, ranking No.1 in the world. Its container fleet capacity is 1.58 million TEU, ranking the fourth in the world. Its self-owned dry bulk fleet (365 vessels/33.52 million DWT), tanker fleet(120 vessels/17.85 million DWT), general cargo and specialized cargo fleet (3 million DWT), are No.1 in the world in terms of capacity.
COSCO SHIPPING GROUP owns over 46 container terminals all over the world, with over 190 berthing spaces. The throughput of its container terminals worldwide amounts to 90 million TEU, taking the second place in the world; the global sales volume of its ship bunker fuel exceeds 25 million tons, topping the world’s list; the container leasing business scale surpasses 2.7 million TEU, which is the third-largest in the world; and its offshore engineering manufacturing competence and vessel agency business are also leading in the world.
The vision of COSCO SHIPPING GROUP is to undertake the mission of globalizing Chinese economy, consolidate advantageous resources, take global shipping, integrated logistics, and shipping related financial services as core business, and develop diversified industrial clusters, so as to build a world-leading business entity that provides integrated logistics and supply chain services.
Focusing on four strategic dimensions, which are “scale growth, profitability, anti-cyclical capability and building a global company”, the Group highlights the “6+1” industrial clusters layout. The “6” is shipping, logistics, finance, equipment manufacturing, shipping services, and social services industrial clusters. The “1” means “Internet Plus” business based on business model innovation. This layout will help facilitate the integration of shipping factors and build a world-class logistics service provider.
Please visit COSCO SHIPPING GROUP’s website at http://en.coscoshipping.com for additional information.