Mermaid Maritime purchases 20% share in Nemo Subsea IS, a Norwegian partnership holding beneficial ownership and interest in the M.V. Mermaid Asiana, a DP2 Dive Support Vessel (DSV) currently under construction and to be chartered to Mermaid upon her delivery in 2009.
Mermaid Maritime Public Company Limited ("Mermaid") wishes to announce that its wholly owned subsidiary, Mermaid Offshore Services Ltd. ("MOS"), had on 26 December 2008 entered into a Sale and Purchase Agreement for the purchase of a total of 20 shares representing 20% of the total shares in Nemo Subsea IS ("Purchase").
The total consideration for the Purchase was USD 2,160,000, representing USD 108,000 per share. The consideration was concluded after arm's length negotiations, and is considered to be within fair market value as estimated by Pareto Private Equity ASA on 26 December 2008 based on consideration to the current charter free value of the Vessel, the anticipated future cash flow based on the bareboat charterparty, and the estimated future value of the Vessel. The consideration is funded from retained earnings of MOS and will be paid to the Sellers upon the transfer of title and ownership of the subject shares from the Sellers to MOS.
Nemo Subsea IS ("Nemo") is a Norwegian internal partnership formed on 03 July 2007. Nemo's sole investment is in the Mermaid Asiana, a DP2 DSV currently under construction in Singapore at ASL Shipyard Pte. Ltd. ("Vessel"). The Vessel is scheduled for delivery in FQ4/2009. Upon delivery, the Vessel will commence its time charter with MOS. This time charter shall be by way of the Vessel being bareboat chartered to Great Cormorant Maritime Ltd., a subsidiary of Robert Knutzen Shipholding Ltd., who shall be responsible to operate the Vessel under a time charter to MOS. The period of both charters is for 10 years commencing from delivery of the Vessel to MOS. MOS has an exclusive option to purchase the Vessel after the 3rd year of charter.
The total partnership capital is USD 12,100,000. At the time of the Purchase, USD 8,100,000 has been paid. The remaining un-paid partnership capital of USD 4,000,000 is due by 30 May 2009. In the event that the maximum amount of un-paid capital is required, MOS will be responsible for a further capital contribution of USD 800,000 (i.e. 20% of the un-called partnership capital). However, the amount of remaining partnership capital that will be called will depend upon actual remaining capital requirements to complete the Vessel, which may be less than the maximum amount, but which shall in any case not exceed the maximum amount of un-paid capital.
Liability is capped to the investment made and commitments that will be due. All partners jointly beneficially own the assets in the partnership and share the profits and losses proportionally.
Nemo has beneficial ownership and interest in the Vessel which will be utilized by Mermaid. The Purchase will allow Mermaid greater security over the charter of the Vessel. It will also allow Mermaid to benefit from profits generated by Nemo from the Vessel's bareboat charter and, if the option to purchase the Vessel is exercised by Mermaid, any net proceeds from the sale of the Vessel. Furthermore, a 20% share in Nemo will allow Mermaid to propose a resolution to the partnership for an acceleration of the sale of the Vessel, subject to no other third party agreements being violated. If such proposal is successfully passed, Mermaid could potentially own the Vessel earlier than the scheduled date for the exercise of the purchase option (i.e. before the 3rd anniversary of the charter).