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Global Offshore may sell stake in vessel

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might sell 40 per cent stake in its upcoming vessel to the Norwegian shipyard which is building it.

Sandeep Akolkar, president, finance, Global Offshore, said, "The contract with the shipyard states it is open to buying 40 per cent stake in the vessel if it is deployed in that region itself. We are exploring the option." The (PSV) is of 4,500 dead weight tonne (dwt) capacity.

If the company exercises the option, it will be creating a special purpose vehicle (SPV) company and transferring the $45-million vessel to that. The Norwegian shipyard will pick the 40-per cent stake from this.

This vessel will be added to Global Offshore's fleet by March next year.

The company has an option of buying one more vessel from the shipyard and is weighing it.

Akolkar said the demand for vessels is still very strong, with an all 11-vessel fleet deployed in India, West Africa and Brazil. However, he said the euro zone crisis has made banks wary of financing the vessels.

The company has time till May to decide whether it will buy an additional vessel from the shipyard.

Akolkar said,"The additional vessel, if bought, will contribute $20,000-25,000 a day in revenues, which will boost these by 15-20 per cent." However, banks are not ready to finance 80 per cent of the vessel, as before. With banks funding 65-70 per cent, the equity put-in has gone up.

Hence, selling the 40-per cent stake in the vessel will give the company extra cash to buy the additional vessel.

The company has steadily increased its fleet from five to 13 vessels in 2010. Its current fleet has 11, as it had sold the older vessels.

The average age of its fleet is less than three years. Four long-term contracts for its vessels are ending in the current year; two contracts are with ONGC.

Akolkar said, "has come with a fresh tender for the first PSV and we have bid for that again. The tender for the second PSV's deployment is expected to be announced by ONGC in June."

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