Sigma Cancels Lifting Equipment Contract with TTS
- Business & Finance
TTS Group ASA has been informed that Sigma Drilling Ltd. has terminated the construction contract for a new, high-specification drillship with STX Offshore & Shipbuilding Co. Ltd. (STX) in Korea.
As a consequence of this an ordered lifting equipment package from TTS, with a total value of MNOK 130, also is canceled.
TTS Group ASA, through its subsidiary TTS Offshore Handling Equipment AS signed a contract 24 of October 2012 with STX to supply a complete lifting equipment package for an ultra-deepwater drillship. The customer of STX Offshore & Shipbuilding Co., Ltd. was Sigma Drilling Ltd., of which Vantage Drilling Co. is a partner. TTS has an indirect minor ownership position in Sigma Drilling Ltd.
TTS earlier have informed Oslo Børs that Vantage Drilling Co. had announced that STX has suspended construction efforts on the drillship in connection with STX’s restructuring efforts.
Since that time, the parties have negotiated to move the project to a mutually agreed shipyard. Due to a lack of progress in these negotiations, Sigma sent STX a termination notice dated January 8, 2014. In conjunction with the termination, Sigma has informed STX that it will claim a refund of its payments made to the shipyard plus interest, which is protected by a refund guarantee provided by an independent financial institution. Likewise is refund to TTS under negotiation.
TTS Group ASA has invested 5 MUSD in Sigma Drilling AS in connection with Sigma placing the order for a drillship with STX. The Skeie group, who controls approx. 30% of the shares of TTS Group ASA, has invested in Sigma separately.
Press Release, January 14, 2014