Bourbon in 51 vessel $1.5 billion sale and charter back deal

bourbon-liberty-seriesAPRIL 9, 2013 — Paris-headquartered offshore services giant Bourbon has signed an operating lease framework agreement for up to US$1.5 billion with ICBC Financial Leasing (China),  a unit of China's state-owned Industrial and Commercial Bank of China Ltd. The deal covers the sale and bareboat charter back for 10 years of up to 51 supply vessels and launches a strategic plan that Bourbon calls "Transforming For Beyond."

The transaction is to close within two months. Twenty-four of the vessels it covers are already in service and 27 are under construction with deliveries due within 14 months.

Bourbon says the main features of the deal 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 percent of the sale price;
  • right of first refusal in the event of ICBC Financial Leasing selling vessels during lease period.

Bourbon says that, based on market price estimates, it should realize a capital gain of approximately 12 percent of the total value of the vessel sale with its accounts seeing asset deconsolidation (operational leasing) leading to a gradual reduction in total net debt of the company.

"This operation won't affect our fleet standardization 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," says Bourbon CEO Christian Lefevre. "This initial phase of Transforming For Beyond allows us to prepare for our growth plan beyond 2015 with stronger financial backing."

The four components of Transforming For Beyond are:

  • "My Bourbon," a transparent and personalized customer relation platform
  • "Under the flag of excellence," which is a plan for Bourbon's staff to growing and evolve together
  • The "Bourbon way," aimed at operational excellence and cost control    
  • "Asset smart," building a strong financial foundation through investment strategy.

The financial component of Transforming For Beyond includes the sale and bareboat chartering for 10 years of US$2.5 billion of new or existing vessels.

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