Cecon ASA Enters Agreement with Export Development Canada

Cecon ASA has received an acceptance from Export Development Canada (EDC) for Cecon ASA’s proposal to acquire the rights in the USD 200 million EDC financing received by Cecon ASA February 2009. The acceptance and solution from EDC enables Cecon ASA to complete the construction of the three vessels at Davie Yard in Lévis Canada.

Cecon ASA will proceed to negotiate a final purchase and sale agreement whereby EDC will sell their rights in the USD 200 million Loan Agreement dated April 23, 2009 for an agreed cash settlement to Cecon ASA. The closing of the transaction is conditional upon Cecon ASA reaching a final commercial contract with the Davie Yard Joint Venture formed by Upper Lakes Group and SNC Lavalin, to complete the three vessels currently under construction at Davie Yard. The closing and settlement of the transaction is expected to take a few weeks.

The revised cost to complete the three vessels, including the EDC cash settlement, will be in the range USD 250-270 million. The contract with Davie Yard is a fixed price turn- key contract with payment upon Cecon ASA’s satisfactory delivery of the vessels from Davie Yard. Cecon ASA has been working with an international bank that will deliver sufficient financing and payment guarantees in order to enter into a binding and final contract with the Yard.

Cecon ASA’s Chief Executive Officer, Terje Tellefsen, said in a comment: “We are delighted to have reached an agreement with EDC and we are now looking forward to complete the project and take delivery of the three state of the art subsea construction vessels. The delivery of the vessels will strengthen Cecon as a global provider of subsea services within pipelaying and similar subsea work.”

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Source: cecon, April 25, 2012