Mermaid Maritime's interest in AOD unaffected by Seadrill's bankruptcy filing

BUSINESS is as usual as Mermaid Maritime Public Company Limited announced that its interest in Asia Offshore Drilling Limited (AOD), a subsidiary of Seadrill, will be largely unaffected by Seadrill's bankruptcy, or Chapter 11, filing.

On Thursday, mainboard-listed Mermaid said that AOD and its subsidiaries are at this stage excluded from Seadrill's Chapter 11 filing and expected to continue business operations "uninterrupted in the interim" while restructuring talks continue.

"To implement the restructuring agreement, Seadrill and certain of its subsidiaries have filed prearranged Chapter 11 cases in the southern district of Texas together with an agreed restructuring plan. As part of the Chapter 11 cases, "first day" motions were filed that, when granted, will enable day-to-day operations to continue as usual, including the provision of management services to Seadrill's subsidiaries inclusive of AOD", Mermaid said in a Singapore Exchange filing.

Mermaid has a 33.76 per cent equity interest in AOD, with the remaining 66.24 per cent of the shares held by Seadrill.

AOD and its subsidiaries have received, as part of Seadrill's restructuring agreement, the benefit of a temporary waiver and forbearance from default that may have arisen under AOD's bank credit facility agreement. AOD has approximately US$210 million outstanding under its bank credit facility, which matures in April 2018.

During the interim period, AOD will continue to evaluate options to reach a consensual solution among its shareholders and lenders.

On Thursday, Mermaid also announced that its Middle East business unit has been awarded a long-term cable survey contract in the Middle East with an estimated value of US$7 million.

"The highlighted package of work, due to commence in the third quarter of 2017, will involve use of a Mermaid chartered-in vessel with geophysical survey personnel, equipment and a survey class remotely operated vehicle (ROV) onboard, carrying out survey of a submarine cable network for a national upstream oil and gas company offshore in the Middle East GCC", it said.

Mermaid closed trading at S$0.125 on Thursday, down 0.1 Singapore cent, or 0.79 per cent.