UPDATE 1-Rieber Shipping hopes for 2017 seismic recovery, but is prepared to wait

(Adds more details)

OSLO, Oct 13 (Reuters) –

** CEO Irene Waage Basili of Norway’s Rieber Shipping
says hopes marine seismic market could begin to
recover in 2017, but is prepared for current market weakness to
last another 2-3 years

** Statement followed firm’s announcement of agreement with
Rasmussengruppen AS to establish a new, 50/50 owned marine
geophysical company called Shearwater GeoServices AS

** CEO says as of today there is no increase in seismic
tender activity, but sees rising interest from investors who
believe this could be a good time to invest in the seismic
industry

** CEO says Shearwood will focus on marine contract market
and not on speculative multiclient investments (collecting data
without contract)

** CEO says pre-funding level has to increase before
Shearwood starts making multiclient investments

** Recently competitors PGS and TGS have
announced higher-than-expected sales due to increased
multiclient sales

** Broker Swedbank said in a note that establishment of a
new seismic player could represent yet another data point
supporting its view that the seismic market has passed the
trough in this cycle

** Swedbank said a more fragmented vessel market is positive
for TGS and Spectrum, which rent ships for
their operations, and negative for vessel owners such as PGS
, Polarcus, CGG and WesternGeco

** Rieber Shipping’s shares are up 14 pct compared with a
decline of 0.7 pct in Oslo’s benchmark share index

INJECTING $60 MILLION

** Rieber Shipping will put its four 3D marine seismic
vessels into Shearwood

** Rasmussengruppen will inject $45 million in cash and
Rieber Shipping $15 million

** The injected cash will be used to withstand current weak
market

** As of today none of the four ships are on contracts

** CEO says has some interesting leads but competition is
tough

** The total value of the four seismic vessels is set to
$228.5 million

** CEO says all debt related to the four vessels, around
$190 million, will be transferred to Shearwater

** The four vessels were originally on long term contracts
to Dolphin Group which earlier this year went bankrupt due to
the weak market

** The seismic equipment on the vessels was owned by
Dolphin. Shearwater will buy this equipment, which will add to
the $190 million debt

** Says will not comment on the price for the seismic
equipment

** In addition to cash injection from Rasmussengruppen and
Rieber, a new bank deal is negotiated for the four vessels

** The new terms include a 75 percent reduction in
instalments compared to the original repayment profile until
June 2019 and an extension of the term of the loans until
year-end 2022

** Acquisition of seismic equipment is financed by DNB
and SR-Bank

** The sale of the vessels to Shearwater implies an
impairment charge of approximately 130 million Norwegian crowns
($16.07 million), which will be booked in third quarter 2016

** CEO Irene Waage Basili of Rieber Shipping says she will
act as interim CEO at Shearwater until a permanent CEO is picked

($1 = 8.0919 Norwegian crowns)

(Reporting By Ole Petter Skonnord)

Source: Reuters

News

UPDATE 1-U.S. Treasury to sell $118 bln in bills

February 22, 2018 mmayha 0

(Adds background) WASHINGTON, Feb 22 (Reuters) – The U.S. Treasury Department said on Thursday it will sell record amounts of three-month and six-month short-term government debt next Monday and increased the offering size of one-year […]

News

AXA to decide on possible share buybacks soon after U.S. IPO

February 22, 2018 mmayha 0

PARIS (Reuters) – AXA Chief Executive Thomas Buberl promised investors on Thursday to decide quickly after the flotation of its American life insurance and asset management businesses what it would do with the proceeds from […]

Be the first to comment

Leave a Reply