Deep Sea Supply and BTG Pactual establish a Joint Venture in Brazil

* DESS sells 15 vessels to the Joint Venture 
  * Joint Venture acquires 6 newbuildings

 

Deep  Sea Supply Plc ("DESS") and BTG Pactual Oil & Gás Participações S.A. ("BTG Pactual")  are pleased to announce  that they have agreed  to enter into a joint venture (the "Joint Venture") for the ownership and operation of Platform Supply Vessels ("PSVs") and Anchor Handling Tug and Supply Vessels ("AHTS") in Brazil. The Joint Venture will be owned 50/50 by BTG Pctual and DESS and will initially own  and operate a fleet of 15 vessels.   The Joint Venture will also acquire 6 large  PSVs  currently  under  construction  with Sinopacific Shipbuilding Group ("Sinopacific") and will look to acquire additional PSVs and AHTS. By  implementing the Joint Venture, the parties will combine DESS' knowledge and experience  within  the  offshore  supply  industry  with  BTG  Pactual's  local presence,  and further develop its  position as a large  player in the Brazilian market  through  the  Joint  Venture.  "We  see big advantages in developing the business  in Brazil together  with a strong,  local partner and  we consider BTG Pactual an excellent strategic partner." says Finn Amund Norbye, CEO of DESS.

 

The Acquisition

BTG  Pactual will purchase a  50% ownership interest in each  of Deep Sea Supply Navegação  Marítima Ltda.  ("Deep Sea  Navegação") and  Deep Sea Supply Serviços Marítimos  Ltda ("Deep Sea Serviços") from DESS. Deep Sea Navegação and Deep Sea Serviços  have an organization of 20 Brazilian employees conducting among others the  chartering and the technical and crew  management of DESS' fleet of vessels operating  in  Brazil  from  offices  in  Rio  and  Macaé.  Deep  Sea  Navegação furthermore  owns  the  2012 built  PSV  "Sea  Brasil"  of 4,700 d.w.t. recently delivered from STX Offshore do Brasil and has the local "EBN" license to operate and charter vessels in the Brazilian market.

Further, DESS will transfer 9 AHTS and 5 PSVs to the Joint Venture. In exchange, the  Joint Venture  will make  a cash  payment equal  to the equity value of the vessels and will take over the vessels' current financing.

The  Joint Venture  will acquire  6 large PSVs  currently under  construction at Sinopacific.  The  PSVs,  which  are  expected  to  be delivered in 2013, are of Ulstein  PX  105 design  with  a  size  of  4,700 d.w.t. and are well suited for operation   in   the  Brazilian  market,  especially  with  regard  to  pre-salt operations.  The vessels will be acquired from PSV Holding Inc., an affiliate to Hemen  Holding Ltd., the largest  shareholder of DESS. PSV  Holding Inc. will be responsible  for the completion of each vessel including supervision costs. Both Joint  Venture partners  will pay  in cash  at the  closing of the Joint Venture transaction  an equity portion of  the financing of these  vessels and the Joint Venture  will work to secure  necessary bank financing for  the vessels prior to their delivery.

The  transactions hereunder imply an enterprise  value of the Joint Venture upon delivery of all the vessels of approximately MUSD 852 where the existing vessels account  for approximately MUSD 578 and the remaining MUSD 274 is related to the newbuildings.  The Joint Venture partners will  also make an equity injection in the  Joint Venture of MUSD 48, with 50 %  from each, to meet the Joint Venture's working capital requirements.

The  vessels to be  owned and operated  by the Joint  Venture will be managed by Deep  Sea Navegação together  with certain DESS  subsidiaries. The Joint Venture shall  be governed by a board consisting of  two directors from each of DESS and BTG Pactual.

 

Completion

The  closing of the  Joint Venture transaction  is subject to  usual third party closing  conditions including relevant competition authorities and approval from the   vessels'   charterers.   All   commercial  lenders  have  preapproved  the transaction. Expected closing of the transaction is during Q1/2013.

 

Use of Proceeds

The  net  cash  effect  to  DESS  after  the  transaction (involving the sale of vessels,  acquisition of newbuildings and injection  of working capital) will be around MUSD 60. The amount will be used to facilitate further growth of DESS. DESS  will publish an Information Memorandum in accordance with the requirements of the Oslo Stock Exchange.

 

Limassol, 17 January 2013.

Deep Sea Supply Plc,

BTG Pactual is an investment vehicle from Banco BTG Pactual S.A. ("BTG"). BTG is a  leading  Investment  Bank  in  Latin  America, with approximately 30 years of experience  in  Brazilian  and  international  markets.  Present in Chile, Peru, Colombia,  the US, the  UK and China,  BTG is a  leading global resource manager based in emerging markets. BTG is one of the largest global asset managers, with over  USD 74.2bn in funds under its management and/or administration, and one of the leading Wealth Management players in Brazil, with USD 21.4bn in assets under management.

Deep  Sea Supply Plc ("DESS")  is incorporated in Cyprus  and is a public quoted company  listed on the Oslo Stock Exchange. DESS is a ship owner and operator of AHTSs  and PSVs,  with worldwide  operations, and  currently has  a fleet of 24 vessels.   DESS' fleet will grow to 30 vessels with the 6 newbuildings mentioned above.  Over the past three  years, DESS has developed  its activities in Brazil which  today constitutes the  single most important  market for DESS. In Brazil, DESS  operates a fleet of vessels through its own local management organizations in Rio and Macaé. The Brazilian fleet includes 1 newbuild PSV recently delivered from  a Brazilian yard.  Twelve of the  vessels operating in  Brazil are on longterm time charter contracts with Petrobras and BP.

The 15 vessels to be owned by the Joint Venture are:

AHTS: Sea Tiger, Sea Panther, Sea Leopard, Sea Cheetah, Sea Jaguar, Sea Fox, Sea Jackal, Sea Vixen and Sea Stoat

PSV: Sea Halibut, Sea Pike, Sea Bass, Sea Turbot, Sea Pollock and Sea Brasil

 

This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)

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.

Associated companies:


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