Prosafe Signs Pact with Cosco

Norwegian contractor Prosafe and COSCO Shipping (Qidong) Offshore Co have come to an agreement on three newbuild offshore accomodation units being built in China.

"Prosafe has reached agreements with COSCO and its lenders which will transform the company’s fleet, market position and earnings potential, and secure a significantly enhanced financial runway," said a statement from the company.

The agreement allows for flexible delivery and long-term financing of Safe Eurus, Safe Nova and Safe Vega. The Agreement with COSCO includes flexible option for delivery of the Units over a period of up to 5 years and a direct discount of USD 55 million to the combined original contract price for the Units.

Outstanding conditions precedent and final approvals for the Agreement are expected to be confirmed within August.

The Agreement provides a very attractive solution for both Prosafe and COSCO. Prosafe achieves commercial flexibility to take the Units to market as opportunities materialise in the years ahead, whilst  COSCO secures a delivery gateway for its key semi-submersible accommodation new builds via a leading accommodation vessel operator.

Prosafe has also been in recent discussions with its lenders in respect of its loan facilities to enable it to  fully utilise the strategic optionality and flexibility provided by the new Agreement, preserve values in the near term and potentially increase longer term cash flow for the benefit of all stakeholders.

In a comment, Jesper Kragh Andresen, CEO of Prosafe says; “The agreement with COSCO combined with the flexibility to possibly scrap up to another three legacy vessels will significantly change our fleet profile. Prosafe will be able to attain a modern and competitive fleet with future earnings potential for the long term."

Jesper added: "The agreement with our lenders includes improved financing terms and implies an extended financial runway as well as the ability to finance the staged delivery of the 3 vessels from existing cash and cash-flow from operations. The combination of the agreement with COSCO and the agreement with our lenders is expected to create value for all stakeholders”.