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

** 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


** 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

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

** CEO says has some interesting leads but competition is

** 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

** 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


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