TechnipFMC Enters Into MoA To Sell The G1201 Subsea Vessel
TechnipFMC has announced that is going to sell the G1201 vessel which is a part of their strategy for the optimization of its profile and the size of its subsea fleet.
After the recent announcement about the alliance agreement of the Company with the best partner when it comes to the installation of the pipeline using S-lay technology. This in line with the Company’s intent to make use of the collaboration agreements for the execution of its iEPCI™ business model.
There are some conditions in the MOA before it completes the transaction. It is expected by the Company that the sale will be completed in December as the conditions are fulfilled, with the vessel being delivered in December 2019.
A Collaboration Agreement with the buyer is also a part of the MOA. This provides for 5 years of exclusivity for a list of mentioned subsea projects in a jurisdiction that has been specified and the right for the first refusal for other projects not mentioned in the Collaboration Agreement.
The carrying value of the sister vessel of G1201, G1200 which has identical design, asset class and functionality was reviewed by the Company because of the MOA.
A non-cash asset impairment charge has been recorded by the Company because of the sale price of G1201 that has been quoted and the present book value and G1200’s book value.
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The total non-cash charge for both the vessels was $125 million and in the third quarter of 2019, it was recorded.
This happened after the earnings of October 23rd, 2019 of the Company was released and before the third quarter, 2019 subsequent events period came to an end. Thus, the changes were comprised in the third quarter Form 10-Q that was filed on the 12th of November.