Operator of FPSO units BW Offshore has closed a contract with a nominee of the financial leasing firm ICBC Financial Leasing through which the nominee becomes an equity partner in the BW Catcher FPSO.
The equity investment, undertaken through the subscription of preference shares, is the first transaction under a cooperation agreement signed between the parties in April 2017.
BW Catcher Limited has issued preference shares with a preferential dividend right to ICBCL, for an aggregate subscription price of USD 275 million.
The Company plans to redeem the preference shares in full over an estimated term of 12 years. The aggregate redemption and dividend payments on the preference shares are estimated to reflect approximately 25-30% of the estimated free cash flow after debt servicing in the Catcher contract over a similar term.
The net proceeds from the issue of the preference shares will be used for general corporate purposes.
“We are very pleased to secure this equity participation for the BW Catcher FPSO in cooperation with our strategic partner, ICBCL, and in line with our stated ambition to seek new ways of enabling further growth for the company,” Carl K. Arnet, the CEO of BWO, said.
The FPSO, a USD 1.2 billion investment, will operate on the Catcher field in the UK North Sea with start-up towards the end of 2017.
Through the cooperation agreement, BW Offshore and ICBC Financial Leasing will jointly pursue international infrastructure projects with a focus on FPSOs.
At the time of the contract signing, the parties said they would establish a long-term strategic partnership and offer cost effective production solutions for the global oil and gas industry.