SCAN's sale, lease-back deal with Ship Finance canceled

OSLO: SCAN Geophysical ASA's sale and lease-back agreement with Ship Finance International Ltd. that was made in March 2007 has been terminated.

In March of 2007, SCAN had agreed to sell its three newbuild, high-capacity, 3-D vessels, including complete seismic equipment, to Ship Finance based on a total price of US$210 million, or US$70 million per vessel. The seismic equipment consists of eight, 3.7-mile (6-km) streamers. The agreement included 12-year bareboat contracts for the vessels, with a charter rate per vessel of approximately US$26,500 per day during the first three years, US$24,500 per day during the second three years, and US$10,000 per day during the final six years. SCAN was also granted fixed price purchase options for each of the vessels after six, 10 and 12 years at approximately US$20 million, US$14 million and US$9 million, respectively. SCAN worked over the weekend towards an alternative solution and has reached a mutual understanding with Singapore-based Pacific First Shipping Pte (PFS), whereby PFS will acquire the vessels with seismic equipment and lease them back to SCAN on bareboat charters. PFS is affiliated with ABG Group, which is the majority owner of ABG Shipyard in India. SCAN plans to raise up to NOK 150 million (US$22.44 million) in new capital provided completion of the sale and lease-back transaction with PFS. The vessels in the agreements are purpose built at ABG Shipyard and are specifically designed for efficient 3-D seismic acquisition with high streamer capacity of 10 tow points and streamer lengths of up to 6.2 miles (10 km) for up to eight streamers, corresponding to a total capacity of 50 miles (80 km) streamers. The vessels, SCAN Empress, SCAN Finder and SCAN Superior, are scheduled for delivery in the second, third and fourth quarters of 2009, respectively.
Read More