Marine Subsea optimistic about new JV for African ChallengerCompany News // March 18, 2011
Marine Subsea reports that it has signed an MoU with CIMC Raffles for a new 50/50 JV and revised contract for African Challenger.
If the new agreement is finalised, CIMC Raffles will upgrade African Challenger at the request of Marine Subsea, to a pure accommodation DP3 semi, without the large crane capacity included in the previous specification.
Furthermore, CIMC Raffles will construct, finance and lease the unit to the 50/50 JV on an 11 year bareboat lease. The JV will have a purchase option after 11 years.
The contract price for the revised unit has been agreed at US$260 million, with US$83 million financed as equity payment from the JV and the balance financed through the 11 year lease from CIMC Raffles.
Marine Subsea’s 50 per cent share of the equity (US$41.6 million) reflects the full payment made by Marine Subsea to the project date, including interest up to the expected date of delivery mid 2012.
The Board of Marine Subsea said it is "very positive" about the revised specification for African Challenger and the new JV structure.
"We see the opportunity for a long-term co-operation with CIMC Raffles that can be highly successful in West Africa. The final agreements are however not intended to be in place before late March 2011. The Board can therefore not guarantee the completion of the agreement," said the company.