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TheStreet Open House

BOURBON : "US$1.5 Billion For The Sale And Bareboat Charter Of 51 Vessels With ICBC Financial Leasing"

PARIS, April 9, 2013 /PRNewswire/ --

Rolling out  " TRANSFORMING FOR BEYOND"

BOURBON and ICBC Financial Leasing ( China) signed an operating lease

Framework agreement for up to US$1.5 billion

corresponding to the sale and bareboat charter back for 10 years of up to 51 vessels

BOURBON is rolling out a transformation plan for its future growth. As part of its "TRANSFORMING FOR BEYOND" project, BOURBON has decided to sell vessels worth US$2.5 billion from its fleet and retain the vessels on bareboat charter for a period of 10 years.

The terms of a first phase of the financial aspect of "TRANSFORMING FOR BEYOND" was signed off on April 9th with the Chinese company ICBC Financial Leasing for up to 51 supply vessels either in operation (24) or under construction (27 with delivery within 14 months) for a total of up to US$1.5 billion. The transaction will be closed within 2 months of its signing following completion of each party procedures.

The main features of this operation are:

  • the sale of vessels at market price with a vendor loan of a maximum of US$116 million;
  • bareboat vessel lease at a fixed rate over 10 years of 10.66% of the sale price;
  • right of first refusal in the event of ICBC Financial Leasing selling vessels during lease period.

Based on market price estimates, BOURBON would realise a capital gain of approximately 12% of the total value of the vessel sale. BOURBON's accounts would see asset deconsolidation (operational leasing) leading to a gradual reduction in total net debt of the company.

"This operation ,  related to an innovative and highly productive fleet that has already proved itself to its customers ,  reflects the overall trust in BOURBON throughout the industry as a vessel operator"  says Mr. Christian LEFEVRE ,  CEO of BOURBON . "This operation won't affect our fleet standardisation strategy as the vessels in the bareboat lease come from our vessel series; they have been designed and built to our standards and BOURBON retains full operational responsibility for its vessels. This initial phase of "TRANSFORMING FOR BEYOND" allows us to prepare for our growth plan beyond 2015 with stronger financial backing."

"As a wholly owned subsidiary of the world's largest commercial bank ,  ICBC Leasing is delighted to work together with BOURBON to carry the deal a step forward. BOURBON ,  as the global leader in this sector ,  has given us full trust and complete understanding in this project. Through this project ,  we would like to establish a long and stable relation of cooperation with BOURBON ,  further expand our leasing business in offshore market ,  and set up business relations with more domestic and overseas corporations in the future"  says Mr. Lin CONG ,  the President of ICBC Financial Leasing co. ltd.

Upon completion of this operation with the last vessel to be delivered mid-2014, BOURBON would operate 230 supply vessels (PSV, AHTS, IMR), including 54 under bareboat charter.

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