Deep Sea Supply in Joint Venture in Brazil

Deep Sea Supply in Joint Venture in Brazil

– DESS sells 15 vessels to the J/V

– J/V acquires 6 newbuildings

Deep Sea Supply Plc (DESS) and BTG Pactual Oil & Gás Participações S.A. (BTG Pactual) announce that they have agreed to enter into a joint venture for the ownership and operation of Platform Supply Vessels and Anchor Handling Tug and Supply Vessels 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 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.

BTG Pactual will purchase a 50% ownership interest in each of Deep Sea Supply Navegação Marítima Ltda. and Deep Sea Supply Serviços Marítimos Ltda 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 transactions hereunder imply an enterprise value of the Joint Venture upon delivery of all the vessels of approximately US$ 852 million where the existing vessels account for approximately US$ 578 million and the remaining US$ 274 million is related to the newbuildings. The Joint Venture partners will also make an equity injection in the Joint Venture of US$ 48 million, 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.

(*) «Sea Brasil» was presented in Skipsrevyen no. 6/2012.