Sevan Marine entered into an agreement with Sembcorp Marine Integrated Yards (SCM), for the latter to acquire assets of Sevan marine in a $28 million transaction.
The assets include intellectual property and proprietary business, employees, the shares of HiLoad LNG and certain other defined assets, Sevan Marine said in a statement.
The transaction is subject to approval by the shareholders’ meeting and other third-party consents being obtained.
As a result of the transaction, the scope and scale of Sevan Marine’s operations will be substantially reduced. Sevan Marine shall retain the income from the Dana Western Isles license agreement.
The transaction will result in Sevan Marine’s remaining business being limited, however generating operating revenues from existing licenses going forward with some upside potential. The Shell Penguins License agreement is intended to be transferred to SCM.
All funds received from Shell under the agreement shall be paid to Sevan Marine from SCM as and when received, as these funds are not included in the cash consideration.
Sevan Marine’s Board will propose to distribute the cash consideration and other available funds to its shareholders, to the extent permitted, as soon as practically possible following completion of the transaction.
All operating and associated costs including unexpired leases in maintaining the three office locations and all the employees in Sevan Marine will transfer to SCM.
CEO Reese McNeel has entered into a retention agreement with Sevan Marine and Sevan Marine has the option to retain his services for an additional 12 months from completion on terms customary for such agreements.
Subject to completion of the transaction, Reese McNeel will be entitled to receive a success fee of NOK 1.5 million ($184.404) Other members of the management team will also be entitled to receive success fees on completion of the Transaction of NOK 600,000 in aggregate.
The transaction is expected to take place in the third quarter of the year.