http://at.marketwire.com/accesstracking/AccessTrackingLogServlet?PrId=1031180&ProfileId=051205&sourceType=1HAMILTON, BERMUDA -- (Marketwired) -- 07/01/13 -- Press release from Ship Finance
International Limited, July 1, 2013
Ship Finance International Limited (NYSE: SFL) ("Ship Finance" or the
"Company") today announced that the Company has agreed to acquire the
harsh-environment jack-up drilling rig West Linus from a subsidiary of
North Atlantic Drilling Limited ("NADL"). West Linus is currently under
construction at Jurong Shipyard in Singapore with scheduled delivery in
December 2013.
The total acquisition cost will be $600 million and the drilling rig
will be chartered back to NADL on a bareboat contract for a period in
excess of 15 years. NADL has been granted four purchase options, first
time after five years and the last at the end of the charter period. Ship
Finance will also have an option to sell the rig back to NADL at the end
of the charter period. NADL has sub-chartered the rig to ConocoPhillips
Skandinavia AS ("ConocoPhillips") for a period of five years with two
extension options of two years each. Expected delivery to ConocoPhillips
is April 2014 and the rig will be at a mobilization rate from the delivery
from the shipyard until commencement of the sub-charter.
$195 million of the purchase price was paid in June 2013, and the remaining
$405 million will be paid on delivery from the shipyard in December
2013. The financing package will be $475 million in total, of which $70
million has been funded now, and $405 million will be funded at delivery
from the shipyard. The $125 million equity investment has been funded from
the Company's recent equity offering.
The bareboat charter rate over the first five years (excluding the
four-month mobilization period) will be approximately US$220,000 per day
and the average rate for the remaining 10-year lease period will be
approximately US$115,000 per day. The transaction will add more than $800
million to our the charter backlog, and the average yearly net cash flow,
after interest and loan amortization, is estimated to be approximately $19
million, or $0.20 per share, during the first five years.
NADL is an offshore harsh environment drilling company with focus on the
North Atlantic basin. The company has nine drilling units in the fleet,
including five semi-submersible, a drillship, and three jack-up
rigs. Seadrill Limited currently owns 74% of the outstanding shares and
the company is listed on the Oslo OTC exchange with a market
capitalization of approximately $2 billion.
The bareboat charter includes an interest compensation clause whereby NADL
will compensate us for volatility in the interest rate environment, and
due to the frontloaded nature of the contract, we will be able to repay
the loan amounts quickly. We expect the rig-owning subsidiary to be
accounted for as 'Investment in associate' under US GAAP, similar to our
three deepwater drilling rigs on charter to Seadrill.
Ole B. Hjertaker, CEO of Ship Finance Management AS, said in a comment:
"Ship Finance has in the recent months invested nearly $1 billion in new
assets which is a firm commitment to our continued growth strategy. We
are very pleased to increase our exposure to the strong offshore
industry with a state-of-the-art harsh environment jack-up drilling rig
which will be employed on a long-term drilling contract to
ConocoPhillips. Our charter backlog and long-term distribution
capacity is building in an accretive manner, and there is still good
capacity for more investments."
July 1, 2013
The Board of Directors
Ship Finance International Limited
Hamilton, Bermuda
About Ship Finance
Ship Finance is a major ship owning company listed on the New York
Stock Exchange (NYSE: SFL). Including newbuildings, the Company has a
fleet of 70 vessels, including 24 crude oil tankers (VLCC and
Suezmax), two chemical tankers, 12 drybulk carriers, 19 container
vessels (including eight newbuildings), two car carriers, six
offshore supply vessels, two jack-up drilling rigs (including one
newbuilding), two ultra-deepwater semi-submersible drilling rigs and one
ultra-deepwater drillship. The fleet is one of the largest in the world
and most of the vessels are employed on long-term charters. More
information can be found on the Company's website: www.shipfinance.org
Cautionary Statement Regarding Forward Looking Statements
This press release may contain forward looking statements. These
statements are based upon various assumptions, many of which are based,
in turn, upon further assumptions, including Ship Finance management's
examination of historical operating trends. Although Ship Finance
believes that these assumptions were reasonable when made, because
assumptions are inherently subject to significant uncertainties and
contingencies which are difficult or impossible to predict and are beyond
its control, Ship Finance cannot give assurance that it will achieve or
accomplish these expectations, beliefs or intentions.
Important factors that, in the Company's view, could cause actual
results to differ materially from those discussed in this presentation
include the strength of world economies and currencies, general
market conditions including fluctuations in charter hire rates and
vessel values, changes in demand in the tanker market as a result of
changes in OPEC's petroleum production levels and worldwide oil
consumption and storage, changes in the Company's operating expenses
including bunker prices, dry-docking and insurance costs, changes in
governmental rules and regulations or actions taken by regulatory
authorities, potential liability from pending or future litigation,
general domestic and international political conditions, potential
disruption of shipping routes due to accidents or political events, and
other important factors described from time to time in the reports
filed by the Company with the United States Securities and Exchange
Commission.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Ship Finance International Limited via Thomson Reuters ONE
[HUG#1713209]
Investor and Analyst Contacts:
Harald Gurvin
Chief Financial Officer
Ship Finance Management AS
+47 23114009
Magnus T. Valeberg
Senior Vice President
Ship Finance Management AS
+47 23114012
Media Contact:
Ole B. Hjertaker
Chief Executive Officer
Ship Finance Management AS
+47 23114011