EOC signs sale and leaseback contract for Lewek Champion

EOC Limited has signed a US$200 million sale & leaseback arrangement for the Lewek Champion  vessel with a unit of ICBC Financial Leasing Co. Ltd (part of the Industrial & Commercial Bank of China (ICBC) group).

The US$200 million price tag for the Group’s DP2 pipelay and heavy lift construction vessel, the Lewek Champion, is based on current market valuations. Under the terms of the deal, EOC will leaseback the vessel on a 10-year bareboat charter basis with options to re-purchase from the end of the fifth charter year. EOC expects to report a gain from the sale.

The Lewek Champion itself is on a long term bareboat charter to EMAS AMC, the subsea services arm of Singapore listed Ezra Holdings Limited (Ezra), a leading global installation and offshore services provider to the O&G industry.

EOC’s Chief Financial Officer, Jason Goh said: “We plan to use the bulk of the sale proceeds to further reduce our bank borrowings, in line with our efforts to strengthen EOC’s balance sheet to position the company for future growth.

“The demand for accommodation units continues to grow on the back of strong global E&P spending and the need for these units during various stages from field development to de-commissioning. EOC already has three accommodation and construction vessels in our fleet, and we are well positioned to leverage growth in this area. With a healthier balance sheet, the Group will have the flexibility to grow its fleet of accommodation vessels. We will look for opportunities to increase our exposure with the aim of developing in this segment.”

As part of the Group’s move to streamline its focus, Capt. Adarash Kumar A/L Chranji Lal Amarnath will be appointed EOC’s strategic adviser from 1 March 2014. Capt Kumar is currently Ezra’s Group Chief Operating Officer and Executive Director.

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Press Release, February 19, 2014