Mermaid Maritime Public Company Limited wishes to announce that its wholly owned subsidiary, Mermaid Offshore Services Ltd. ("MOS"), had on 20 February 2009 entered into sale and purchase agreements with Aquanos Ltd. (UK) ("Seller") for the purchase of two Triton XLX class ROVs from Perry Slingsby Systems Inc. The purchase also includes the assignment of a client contract for one of the ROVs (collectively, the "Transaction").
The total consideration for the Transaction was GBP 3,700,000. The consideration was concluded after arm’s length negotiations, and is considered to be below market value as estimated by the Company after comparing the purchase price with quotations dated 06 February 2009 received from the same manufacturer (Perry Slingsby Systems Inc.) for the construction of ROVs with similar specifications; consideration of the potential revenue stream from the first ROV currently in operation; and other potential earnings from prompt delivery of these ROVs (compared against a longer timeframe if Mermaid had to place new orders with the manufacturer for delivery of new ROVs with similar capabilities).
Payment comprises a deposit equivalent to 25% of the consideration paid on signing of the sale and purchase agreements with the balance to be paid upon delivery of the ROVs. Both ROVs are ready for delivery and are scheduled to be delivered to MOS by no later than 27 February 2009. The majority of the consideration will be funded from borrowings and the remainder from retained earnings of MOS.
The two Triton XLX ROVs are heavy work class / construction class ROVs with water depth capabilities of up to 3000 meters. The first ROV is less than three months old and is presently operating on a contract with a potential value of GBP 500,000 and scheduled to expire about June 2009 while the second ROV is new and is on standby ready for work. Both ROVs include full manufacturer warranties.
Acquiring these ROVs with ultra/deep water rating will allow Mermaid to offer a complete ROV solution to prospective clients by opening up access into a growing deep and ultra deep water ROV market. With this capability, Mermaid believes it will be positioned to compete throughout the full ROV range of services. Although Mermaid does not presently operate in the ultra deepwater market segment, Mermaid believes that its reputation for quality of service will allow it to place these units into service. Two primary market opportunities exist: one to Engineering, Procurement, Installation and Commissioning ("EPIC") contractors for ROV intervention and inspection (divers cannot be used due to the water depth) and another to offshore (deepwater) mobile drilling units ("MODU") who may place such ROVs on their rigs on a full time basis.