Malaysian company Sapura Energy has agreed to sell three tender-assisted drilling rigs to NKD Maritime Limited for an aggregate cash consideration of $8,2 million.
"The disposal of the rigs was carried out by way of tender exercise. Based on an informal market survey, the fair market value could not be obtained for the rigs as there is no potential demand for these rigs. Instead, a demolition valuation was conducted as there is a potential sale in the demolition market," Sapura Energy said.
Once delivered to the buyer, subject to certain conditions, the rigs - Sapura T-19, Sapura T-20, and Sapura Setia - will be broken up, demolished, scrapped, and recycled and will not be engaged or employed in extraction, navigation or trade and will not otherwise be used as rigs of any kind or nature.
Providing the rationale for the proposed sale, Sapura Energy said the rigs were either aging (Setia) or not technically competitive (T-19, T-20).
"Based on the market demand, the company does not see any financially viable prospects that could cater for the Rigs to be reactivated in the foreseeable future. Therefore, the rigs have a high probability of being stacked in the coming years which exposes the company to more costs and risk of deterioration," Sapura Energy said.
"The proposed disposal is part of the company’s focus on long-term sustainability and to improve its liquidity position, streamline its operating model and provide greater flexibility for strategic growth," Sapura Energy said.
The proceeds from the proposed disposal will be used for working capital of the group.