Polarcus improves liquidity position through partial divestment of multi-client libraryCompany News // June 29, 2015
Polarcus Limited has signed a Letter of Intent (LOI) with TGS-NOPEC Geophysical Company for the sale of its multi-client projects in Northwest Europe and West Africa in return for a cash consideration of US$27.5 million and future revenue share on library late sales.
The agreement includes an upfront cash payment, a tiered revenue share from future sales of the divested multi-client projects and further contains cash payments for costs deferred under existing contractual agreements.
The transaction will result in a non-cash impairment of the multi-client library of approximately US$65 million.
Polarcus' Capreolus 3D survey offshore Australia does not form part of the transaction and will continue to be owned and marketed by Polarcus.
Commenting on the transaction, Rod Starr, CEO Polarcus, said: "The decision to sell a portion of the library provides Polarcus with additional liquidity to navigate the current challenging market environment by monetizing a portion of the asset value while retaining revenue upside from future late sales achieved by TGS. It should be noted that Polarcus is fully committed to continue developing its multi-client business going forward with a disciplined approach."
The transaction is subject to due diligence and final definitive documents with target closing date on or before July 31, 2015.