EOC signs sale and lease back deal with ICBCCompany News // March 7, 2014
EOC Limited has signed a US$200 million sale and leaseback arrangement for Lewek Champion with a unit of ICBC Financial Leasing Co Ltd.
The US$200 million price tag for the group's DP2 pipelay and heavy lift construction vessel is based on current market valuations.
Under the terms of the deal, EOC will leaseback the vessel on a 10-year bareboat charter with options to re-purchase from the end of the fifth charter year.
EOC expects to report a gain from the sale.
Lewek Champion is on a long term bareboat charter to EMAS AMC, the subsea services arm of Singapore listed Ezra Holdings Limited.
EOC's Chief Financial Officer, Mr Jason Goh said: "We plan to use the bulk of the sale proceeds to reduce our bank borrowings as part of our efforts to strengthen EOC's balance sheet to position the company for future growth. Demand for accommodation units continues to grow on the back of strong global E&P spending and the need for these units during various stages from field development to decommissioning.
"EOC already has three accommodation and construction vessels in our fleet, and we are well positioned to grow in this area. With a healthier balance sheet, the group will have the flexibility to develop and increase our exposure to this segment when opportunities arise."