Sembcorp Marine joined Keppel Corp in saying a long-awaited settlement with Sete Brasil for rig-building contracts value billions of that had been frozen after the Brazilian firm was compelled to file for chapter amid a sweeping corruption probe.
In December 2011 Keppel Offshore and Marine obtained a letter of intent from SETE Brazil for the development of 1 DSS semi-submersible. This was adopted in April 2012 by a brand new letter of intent for 5 further items.
In August 2012 Semcorp Marine obtained an order from SETE Brazil for seven Jurong Espadon ultra-deepwater drillships.
Keppel Offshore & Marine’s wholly owned subsidiaries, Fernvale and FELS Offshore, have entered right into a settlement settlement with subsidiaries of Sete Brasil together with Urca, Frade, Bracuhy, Portogalo, Mangaratiba and Botinas, in relation to the Engineering, Procurement and Construction contracts (EPC Contracts) for the development of six semisubmersible drilling rigs for these six Sete Brasil subsidiaries.
As a part of the Settlement Agreement, Fernvale will take over possession of the uncompleted rigs which arose from the efficiency of the EPC Contracts with Bracuhy, Portogalo, Mangaratiba and Botinas. The EPC Contracts and associated agreements entered into with these 4 subsidiaries shall be deemed to be amicably terminated, with no penalties, refunds and/or any further quantities being on account of any celebration, and the events will waive all rights to any claims.
The works achieved beneath the EPC Contracts with Bracuhy and Portogalo are about 40% and 21% accomplished respectively, whereas these for Mangaratiba and Botinas are under 10%.
When the Settlement Agreement comes into impact, Fernvale may have full possession over the 4 uncompleted rigs, and can have the ability to discover varied choices to extract the very best worth from these property.
As for the rigs beneath development for Urca and Frade, a complete sum of near US$260m shall be recognised as a part of the undisputed debt included in Sete Brasil’s court-approved Judicial Reorganisation Plan. The excellent quantity shall be paid to Fernvale proportionally and pari passu with the opposite collectors of the Sete Group as a part of, and out of the proceeds of, its Judicial Reorganisation Plan.
Semcorp Marine mentioned its seven drillship contracts with Sete Brazil subsidiaries value a complete US$5.6 billion shall be terminated and the events will mutually launch one another from all claims in relation to the contracts. This is topic to sure prior situations being fulfilled. The firm beforehand obtained some $2.70 billion in progressive funds for the work carried out on these tasks, up till November 2014 when Sete Brasil was unable to proceed with the funds.
For 5 of the seven drillships, Sembcorp Marine will maintain all works carried out.
The remaining two have made probably the most development progress, and shall be cut up between Sembcorp and Sete Brasil in proportion to funds already made by Sete Brasil. Sete Brasil has recognized a purchaser for its items that personal the 2 drillships. The purchaser is predicted to barter with Sembcorp to enter new contracts to finish the drillships.
(Sources: Sembcorp Marine/Keppel O&M/Business Times)
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