GC Rieber Shipping Releases Update on New Building Programme (Spain)

GC Rieber Shipping has an ongoing new building programme related to fleet renewal within subsea and marine seismic.

The IMR/CSV new buildings H702 and H703 are being built at the Freire yard in Vigo, Spain. The vessels have high manoeuvrability and station keeping capabilities and are built according to IMO SPS 2008 rules. H702 (“Polar King”) was delivered 22 March 2011 and will after mobilisation work and sea trials of the 150t offshore crane commence on a 3 year time charter with Technocean. The vessel is expected operational from late April 2011. Delivery of H703 is expected post-Summer 2011, and is presently not committed.

The two high-capacity seismic new buildings H532 and H533 are owned by the 65% owned subsidiary Armada Seismic ASA. Armada took delivery of H532 (“Polar Duke”) in June 2010 and the vessel is currently being upgraded at the GMC yard in Stavanger to a capacity of 14 streamers. The upgrade is expected to be completed end April 2011 where after “Polar Duke” will commence on a 5 year time charter with Dolphin Geophysical (“Dolphin”). Dolphin has an option to extend the agreement by six years. Armada will, as part of the agreement with Dolphin, invest USD 54 million in seismic equipment (mainly streamers) on “Polar Duke” and has entered into a 5 year lease agreement for the seismic equipment with Dolphin. The USD 54 million investment will be financed with USD 32,5 million in long term financing from DnBNOR and USD 21,5 million in pre paid lease payments from Dolphin. As part of the transaction, and as previously announced, Armada will provide Dolphin Group ASA with a convertible loan of USD 6.5 million. The loan can be converted into shares in Dolphin Group ASA at NOK 2,50 per share, subject to Dolphin exercising its option to charter H533.

The H533 is being built at the Factorias Vulcano yard in Vigo. Late 2010, the yard initiated debt restructuring proceedings in combination with securing a EUR 21 million working capital facility related to H533 from Banco Popular guaranteed by the regional government in Galicia and Pymar. Since January 2011 there has been good progress at the yard and we expect delivery of H533 in first quarter 2012. Dolphin has an option to charter H533 for a fixed period of three years with an option to extend the agreement by eight years after completion of the fixed part of the contract. Dolphin’s option for H533 must be exercised within 1 November 2011.

The purchase contract for the IMR new building H7040 being built at the Batamec yard in Indonesia has been sold to a third party, at cost price. Equipment for the vessel, furnished by GC Rieber Shipping, was included in the sale. Net cash effect for GC Rieber Shipping is about NOK 80 million.

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Source: rieber-shipping , March 24, 2011;