Seatrium Limited (formerly SembCorp Marine and KOM)

[weijian]

Besides the North Atlantic high spec rig been "marketed" for sale together (~77% owned by SCM), 3 more rigs finally announced cancellation. Together with the 2 from Perisai in Aug, this brings to a total of 6 rigs that SCM holds on its inventory (Oro Negro-3, Perisai-2 and MPM-1)

Sembmarine cancels three Oro Negro rigs (4/10/2017):
https://fairplay.ihs.com/commerce/articl...negro-rigs

Singapore, 31 August 2017: Sembcorp Marine Ltd (the “Company”) wishes to announce that its wholly-owned subsidiary, PPL Shipyard Pte Ltd, has terminated two contracts with the subsidiaries of Perisai Petroleum Teknologi Bhd, for the construction of two jack-up rigs following the expiry of the existing Deferment Agreements.
http://www.sembmarine.com/stock-exchange...d-pte-ltd/

[karlmarx]

Does this mean that these 6 rigs have been constructed, and are now sitting on SCM's yards, waiting to be sold?

[weijian]

Oro Negro (3rigs) and Perisai (2 rigs) have been mentioned in previously be technically accepted (or 98% completed), while MPM (1 rig) was rejected due to "too many cracks" but disputed by SCM (contract terminated and now under lawsuit i believe)...So all 6 rigs should just to be activated from some sort of cold stack condition, to start drilling.

Based on AR15, a 280mil SGD impairment was made for these 6 rigs (~1.25bil USD contract value) and no further impairment was made for FY16, although all profit recognition was reversed in FY15 when the rigs were delayed. Doesn't take a genius to figure out there will be another impairment coming up in FY17.

SCM had previously took over and operated a ARV3 (accommodation and repair vessel at 227mil) when its prior owner Equinox Offshore Brazil defaulted but it already had a 5year charter with Petrobras.

[crabcrab]

Rigs sold...

http://infopub.sgx.com/FileOpen/SCM%20Pr...eID=473339

[CY09]

The sale is decent with SMM getting 500 mil cash upfront.

However, SMM has to be the "banker" for this scheme where they are giving a 5 year loan amount of US$800 mil to Borr Drilling at "market rates". So there will be a hefty trade receivable sitting in its balance sheet for 5 years.

[brattzz]

SCM financing Borr Drilling US$800milos?

Borr Drilling also brought over the Transocean's rigs at US$1.2billions before this deal... also funded by KepCorp?

:O

[weijian]

SCM financing Borr Drilling US$800milos?

Borr Drilling also brought over the Transocean's rigs at US$1.2billions before this deal... also funded by KepCorp?

:O

Keppel FELs seem to be in a "slightly better position of strength" since Transocean's orders were delayed, compared to SCM's completed-but-not-delivered rigs. Borr took over the contracts at quite almost unchanged contract values wrt to Keppel FELs and seems like Transocean is taking the 20% downpayment hit themselves.

keppel fels announcement: http://www.kepcorp.com/en/news_item.aspx?sid=6986
Borr and Transocean's deal: https://www.bassoe.no/investors-throwing...g/news/38/

[brattzz]

so what does Borr Drilling (ex-seadrill) sees in the current low oil price, end of deep sea oil production environment? :O
good timing to pick up cheap rigs at discount? or excellent financing schemes?

buying at the bottom izzit?

[specuvestor]

The results are probably non-event but will be interesting to see what SCI review due next week will say... I'm of the view that Keppel might takeover SMM

[desmondxyz]

The results are probably non-event but will be interesting to see what SCI review due next week will say... I'm of the view that Keppel might takeover SMM

I think the best for keppel is to spin-off the O&G arm and merge with Sembmar. It will sink even faster if it were to absorb sembmar.