UAE-based offshore contractor Lamprell has secured funding to cover the costs for the continuation of the construction of two IMI jack-up rigs.
Lamprell has agreed, in principle, the structure and commercial terms of a $45 million UAE Export Credit Agency backed revolving trade loan facility. The agreement was reached with two regional banks, instead of three as previously expected.
As explained by Lamprell on Tuesday, this initial facility will assist with the working capital requirements of the two IMI newbuild jack-up rigs, which are currently under construction at the group’s Hamriyah yard.
As part of the terms of the initial facility, there is an option of a further $45 million accordion funding arrangement subject to the provision of additional security to the banks similar to that for the Initial facility, which will be agreed in due course and is expected to be available in 1Q 2022 as opposed to initial expectations of it being available in 4Q 2021.
The drawdown of the initial facility will be conditional on, amongst other things, the company successfully completing a 19.99 per cent equity raise. The company previously announced it expects to undertake the equity raise in 4Q 2021 and raise a minimum of $30 million.
The company said back in August 2021 that the capital raised through equity would be used to meet the working capital requirements of the IMI rig projects. Meaning, once delivered, the final milestone payments will be invested in the company’s facilities to increase efficiency and capacity to grow in particular the renewables business unit and to fund the outstanding equity investment in the IMI joint venture in Saudi Arabia.
Lamprell secured a formal order to build two newbuild jack-up rigs for International Maritime Industries (IMI) in January 2020 following a letter of intent from December 2018. IMI is a joint venture between Saudi Aramco, Lamprell, Bahri, and Hyundai Heavy Industries.
It was agreed that the two rigs would be built collaboratively between IMI and Lamprell, with Lamprell’s share of project value amounting to circa $350 million. The rig design is based on the Super 116E and the vast majority of the work is being performed at Lamprell’s UAE facilities with final commissioning works to be undertaken in Saudi Arabia.
The contract stipulated that the work is to be completed in just over two years for the first rig with the second rig being delivered three months later. By mid-January 2021, the two IMI jack-up rigs were progressing with the fabrication of hull, cantilever and leg sections well under way.