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 Pactual 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.
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.
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 long term 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