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Samsung Heavy succeeds in reselling drill ship for $245m

This photo shows a drill ship built by the shipbuilder. (Samsung Heavy Industries Co.)
This photo shows a drill ship built by the shipbuilder. (Samsung Heavy Industries Co.)
Samsung Heavy Industries Co. said Wednesday it has signed a $245 million deal with a European company to sell its drill ship it has failed to deliver due to a botched deal.

"The deal will help improve our financial health along with our recent sale of new shares," Samsung Heavy said in an emailed statement.

The drill ship sold to the European company is one of two drill ships that Swiss-based offshore driller Transocean Ltd. relinquished without specifying a reason in September 2019.

The two drill ships were originally ordered by Ocean Rig UDW Inc. in 2013 and 2014, which was acquired by Transocean in 2018.

In June, Samsung Heavy signed a deal to lease the other drill ship of the two drill ships to Italian oilfield services company Saipem for two years, not revealing the value of the deal.

The deal to be effective from November 2021 to August 2023 has an option for Saipem to purchase the leased drill ship.

The drill ship will be delivered by March 31, 2023, Samsung Heavy said.

But the European company has to determine the delivery day of the drill ship by Oct. 5, 2022, the shipbuilder said in a separate regulatory filing.

If not, Samsung Heavy can cancel the deal without returning a deposit worth $15 million to the European company, the shipbuilder said.

The buyer can ask for the drill ship's structure change if it agrees with Samsung Heavy Industries to do so, the shipbuilder said.

Excluding the two drill ships, Samsung Heavy has three drill ships in stock, as buyers canceled their orders, citing a slide in oil prices.

"As the drill ship market has been recovering on the back of a recent rise in oil prices, Samsung Heavy Industries will make efforts to sell the three drill ships as soon as possible," the shipbuilder said.

In a bid to overcome its yearslong losses, Samsung Heavy reduced its capital stock to improve its financial status by cutting the face value of its shares from 5,000 won ($4.23) to 1,000 won in July.

The shipbuilder also raised 1.28 trillion won through the sale of its new shares in November. (Yonhap)

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