Neptune Marine Services Limited today announced that its wholly owned Singapore subsidiary, Neptune Marine Pacific Pte Ltd (Neptune Pacific), has signed a Memorandum of Agreement with PT Wintermar, of the Indonesian listed PT Wintermar Offshore Marine group, for the sale of the Neptune Trident vessel.
Under the terms of the agreement Neptune Pacific will sell the vessel for a total consideration of USD$14,025,000. The proceeds will allow Neptune to eliminate outstanding term debt.
Neptune's Acting CEO, Robin King, said the sale of the Neptune Trident was an important component of the company's ongoing restructuring initiatives that are focused on returning the business to profitability.
"Two primary elements of our restructuring plan are a reduction in debt levels and a move away from the capital burden associated with vessel ownership. The Trident sale is a significant step forward in both regards and is in line with our evaluation that ownership of the vessel is no longer a strategic fit for the company moving forward," he said.
"The emerging potential for ongoing operational losses against the vessel following the cancellation of anticipated work scopes resulted in the decision to sell being brought forward.
"Concurrently, we are investigating the establishment of an operational agreement with Wintermar that would provide for collaboration and the potential for Neptune to utilise the vessel on future projects," he added.
The sale value achieved for the Neptune Trident falls within the $12-$15 million valuation range that is indicative of current market rates. The Neptune Trident has a written down value of $21.5 million giving rise to a loss on sale of approximately $7.5 million that will be recorded in the current half year report.
Completion of the sale is scheduled for May 2011.
The Neptune restructuring program remains ongoing with further asset and business sales, reductions in overheads and additional strengthening/renewal of the Board expected.