Prosafe to Buy Newbuilds, 25 pct in Dan Swift for $70 mln

Accommodation rig firm Prosafe says:

* Prosafe has signed a letter of interest to acquire Axis' two semi-submersible units under construction, Axis Vega and Axis Nova, as well as a 25 pct minority stake in the company's monohull Dan Swift

* Says agreed consideration for acquisition will be $70 million

* Axis Nova and Axis Vega each control shipbuilding contracts with Cosco Qidong Shipyard for the construction and delivery of a semi-submersible accommodation rig ("Axis Nova" and the "Axis Vega")

* Prosafe will pay through issuance of 585.8 million ordinary shares priced at nok 0.30 per share, and a subordinated zero coupon convertible bond of nok 403.4 million

* Says convertible bond of nok 403.4 million, is convertible into 1,344.7 million shares at a conversion price of nok 0.30 per share

* Will following the transaction have three accommodation vessels completed or nearing completion in a preserved, strategic stacking mode with Cosco Quidong Shipyard in China

* The intention is to start negotiations with the Yard and other parties to find a solution for the delivery, financing and operations of the units such that Prosafe can take delivery on attractive terms upon a market recovery

* CEO Stig Harry Christiansen says the remaining installments to the yard is about $211-215 mln per vessel

* Prosafe says if no agreement is made with the Yard and related parties Prosafe has the right to claim cancellation on the newbuilding contracts due to late delivery and claim deposit of $60 mln fully secured by Bank of China (BACHF)

* Assuming the transaction and this process is completed, Prosafe envisage scrapping additional accommodation vessels in the period ahead, in addition to the three units already scrapped in 2016

* Axis shareholders include HitecVision Fund VI and LF Investment ApS (a company owned by Lauritzen Fondet), who respectively own approx. 66 pct and 34 pct of the shares in Axis

* The transaction values Dan Swift at an enterprise value of USD 119 million

* Fully dilutive effect of settlement in shares will be 1.93 bln shares, or 21.9 pct of share in Prosafe, HitecVision funds will own 32.1 pctd

* Prosafe's CEO repeats that he expects recovery in the accommodation rig market from 2018, sees market balance by 2020

* CEO says day rates are well below 100.000 dollar per day in the very near term and 200.000 dollar in 2018, that makes me optimistic that the market has bottomed out

* Clarksons Platou Securities and Schjødt act as advisors to Prosafe on the transaction

* Danske Bank has delivered a fairness opinion on the terms of the transaction to the Board of Prosafe.

Reporting By Ole Petter Skonnord