EOC Limited, one of Asia’s leading providers of offshore production services to the oil and gas (O&G) sector, has successfully signed a $200 million sale & leaseback arrangement for the Lewek Champion with a unit of ICBC Financial Leasing Co. Ltd (part of the Industrial & Commercial Bank of China (ICBC) group).
The $200 million price tag for the Group's DP2 pipelay and heavy lift construction vessel, the Lewek Champion, is based on current market valuations. Under the terms of the deal, EOC will leaseback the vessel on a 10-year bareboat charter basis with options to re-purchase from the end of the fifth charter year. EOC expects to report a gain from the sale.
The Lewek Champion itself is on a long term bareboat charter to EMAS AMC, the subsea services arm of Singapore listed Ezra Holdings Limited (Ezra), a leading global installation and offshore services provider to the O&G industry.
EOC's Chief Financial Officer, 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.
"The 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 de-commissioning. 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."
As part of the Group's move to streamline its focus, Capt. Adarash Kumar will be appointed EOC's strategic adviser from March 1. Capt. Kumar has almost 30 years of experience in the offshore and marine industry. He has managed and advised various leading offshore oil and gas companies in Southeast Asia, and has held several senior leadership positions.
