COSCO announces negotiated delay of Sevan 650 drilling unit
The Board of Directors (the “Board”) of COSCO Corporation (Singapore) Limited (the “Company”) refers to the announcements made on 30 May 2011 and 17 October 2014 in relation to the turn-key EPC (Engineering, Procurement and Construction) contract entered into between COSCO (Qidong) Offshore Co., Ltd (“COSCO Qidong”) with Sevan Drilling Rig VI Pte Ltd (the “Shipowner”). As announced by the Company on 17 October 2014, the Shipowner and COSCO Qidong have agreed to defer the delivery date of Sevan Developer for 12 months with options exercisable at 6-month intervals, to extend the delivery date up to a total of 36 months from 15 October 2014, the Corporation said on Monday.
The Board wishes to announce that the Shipowner and COSCO Qidong have agreed to exercise the first option to extend the delivery date of Sevan Developer for 6-months up to 15 April 2016. COSCO Qidong is required to refund to the Shipowner the sum of US$26.3 million (being 5% of the contract price) plus interest, by 1 December 2015. The final payment for the contract has also been amended from the original 80% of the contract price to 85% of the contract price of US$526.0 million (amounting to US$447.1 million) and can be amended further upon the expiration of the option period. The other terms and conditions under the deferment agreement entered into on 15 October 2014, including termination rights, remain unchanged.
In view of the deferment and the uncertainty as to whether the remaining options will be exercised, it is not possible to ascertain the financial impact of the agreement for deferment at this point in time.
The Company will make announcements of any significant development in this matter at the appropriate junctures.
COSCO Corporation (Singapore) Limited ("COSCO Corporation" or the "Group") has one of the largest Ship Repair, Ship Building and Offshore Marine Engineering operations in China. A diversified group with activities also in Dry Bulk Shipping, Shipping Agency and other sectors, it is the SGX Mainboard-listed subsidiary of China Ocean Shipping (Group) Company (“COSCO Group”), China’s largest shipping group and one of the top shipping conglomerates in the world.
