Cecon orders two construction vessels in Canada

Naval architectural consultancy Vik-Sandvik has confirmed that Cecon ASA has ordered two VS4220 offshore construction ships at Davie Shipyard in Quebec, Canada. The first will be delivered
in April 2009.

Cecon ASA has entered into an agreement with Deepflex in Houston, whereby Deepflex has chartered both Cecon newbuildings for 150 days annually each, for a firm period of five years, plus three yearly options.

The agreement also formalises Cecon and Deepflex’s intent to co-operate through a utilisation by Deepflex of Cecon’s installation services, and promotion by Cecon of Deepflex’ products.

Deepflex will, as part of the agreement, provide a 2,500 ton carousel for under deck installation in both vessels. The contract value for the firm period is estimated at US$112 million.

Cecon has also recently completed a US$100 million bond issue directed towards Norwegian and international institutional investors. The purpose of the issue is to finance the construction contracts of the two offshore construction ships at Davie.

The bond is US$ denominated, with a duration of five years, carries an interest of 11.0 per cent, and is secured by way of a second priority security in the ships. Combined with the recent US$75 million equity issue, the company now has secured financing of the construction project for the next 15 months.

The remaining financing requirement will be secured by way of a first priority secured loan at a later stage. Pareto Securities ASA acted as manager for the bond issue.OSJ