Icon Offshore to sell jack-up rig for double purchase price

KUALA LUMPUR (Aug 30): Icon Offshore Bhd is set to offload a jackup rig to Saudi Arabia-based ADES Arabia Holding for RM381.65 million, more than double the price paid by the company for the buy 22 months ago.

This confirms The edge‘s report last Friday (August 26) that the offshore support vessel supplier and offshore drilling rig contractor had received an offer from an overseas buyer to buy the jack-up rig.

In a statement released Tuesday, August 30, Icon Offshore said its wholly-owned subsidiary Icon Caren (L) Inc had reached an agreement with ADES for the sale of a jack-up rig. Perisai Pacific 101.

The company noted that the disposal consideration of RM381.65 million is double the RM177 million it spent to purchase the jackup rig from Perisai Petroleum Teknologi Bhd in October 2020.

Of the proceeds of RM381.65 million, Icon Offshore said it has set aside RM159.2 million for redemption and release of the existing mortgage on the platform, earmarked a further RM208.61 million for needs general business and working capital requirements, and set aside the remaining RM13.84 million for estimated disposal expenses.

Commenting on the proposed divestiture, Icon Offshore Managing Director Datuk Seri Hadian Hashim said it presented an opportunity for the company to monetize the investment in the rig with a significant profit – RM185.5 million.

He added that this will provide Icon Offshore with the financial strength to diversify into other business areas, such as the new space segment and energy services, through strategic mergers and acquisitions.

Looking back, Hadian said the acquisition of the rig enabled the company to enter the offshore drilling business at a very favorable price, which was then favorably impacted by rising oil prices. driven by multiple world events.

However, Hadian said that while he was aware that oil price developments would continue to have a positive impact on Icon Offshore’s overall financial performance, the company’s initial strategy to increase its presence in the segment drilling through greater asset ownership is increasingly difficult to execute. while asset prices have risen dramatically.

“Coupled with the continued volatility in the sector, this necessitates the reassessment of its initial asset expansion strategy,” he said.

Icon Offshore said it remains confident in consolidating its position as the preferred integrated services operator to serve the diverse needs of oil and gas majors by leveraging its technological innovation, low-cost base and strong health, safety, security and environmental track record.

The company said the sale is subject to shareholder approval at an upcoming extraordinary general meeting.

“Subject to obtaining all approvals, the proposed divestiture is expected to be completed in the fourth quarter of 2022,” he added.

Shares of Icon Offshore closed unchanged at 11 sen on Tuesday, giving the company a market capitalization of RM285.14 million.

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