Friede Goldman Halter subsidiary, Petrodrill reach agreement
Friede Goldman Halter Inc. , Gulfport, Miss., said its Friede Goldman Offshore Texas subsidiary has reached an agreement with Petrodrill IV Ltd. and Petrodrill V Ltd. regarding contract disputes over FGOT's construction of two Amethyst-class deepwater semisubmersible drilling rigs for Petrodrill.
br>Friede Goldman Halter Inc., Gulfport, Miss., said its Friede Goldman Offshore Texas subsidiary has reached an agreement with Petrodrill IV Ltd. and Petrodrill V Ltd. regarding contract disputes over FGOT's construction of two Amethyst-class deepwater semisubmersible drilling rigs for Petrodrill.
The transaction will be completed in July and has been approved by the US Maritime Adminstration, which is providing loan guarantees for the project, said Friede Goldman Halter.
The new agreement between FGOT and Petrodrill calls for the Amethyst 4 and 5 rigs to be delivered to Petrodrill on Sept. 15, 2001, and Dec. 15, 2001, respectively. Both parties have agreed to increase the float-out milestone payment by $3 million per rig and to a final $6.4 million payment per rig at delivery, bringing the new contract value to $186.8 million. They have also agreed to raise late delivery penalties and terminate all pending litigation related to the project, Friede Goldman Halter said. Construction of Amethyst 5 will be transferred to the company's Orange, Tex., facility from Pascagoula, Miss.
Earlier, Bollinger Shipyards Inc., Lockport, La., and Friede Goldman Halter signed a definitive agreement, under which Bollinger will purchase Friede Goldman Halter's vessel repair unit for $80 million cash, Friede Goldman Halter reported. The all-cash transaction is expected to be completed in July.
The vessel repair business being acquired by Bollinger is an operating unit of Halter Marine, Friede Goldman Halter's vessel segment, and consists of five facilities in Louisiana and Texas. Friede Goldman Halter is divesting the unit after determining that it didn't fit the company's business strategy, said J.L. Holloway, chairman. He said the sale underscores the company's commitment to new vessel construction.
The sale and $33 million in tax refunds Friede Halter Goldman expects to collect in 2000 are anticipated to provide significant additional liquidity for the company, said Pres. John Alford. It also reduces the number of facilities the company operates, he said. The company hopes to achieve "meaningful incremental operating efficiencies and cost savings," and projects a significant decrease in sales, general, and administrative expenses during 2000 and 2001 versus 1999 levels, he said.