Gulf International Services Q.S.C. (“GIS”) announced that the purchase price payable to Japan Drilling CO., LTD. (“JDC”) for the acquisition of JDC’s 30% stake in Gulf Drilling International, Ltd. Q.S.C. (“GDI”) has been confirmed by GDI’s external auditors to be US$157.7 million. This purchase price is equivalent to 30% of GDI’s net book value as of April 30, 2014, being the total consideration owed JDC for its interest pursuant to the Joint Venture Agreement between the parties.
In accordance with the Sale and Purchase Agreement, GIS made a down payment of US$153.6 million to JDC in April for its 30% interest, leaving a balance owing of US$4.1 million, which was paid to JDC on June 19th, 2014. The transaction is being financed via an eight year bilateral loan agreement that has been secured through local banks on highly competitive terms.
GIS Chief Coordinator Mr. Ebrahim Al-Mannai said GIS is pleased to have concluded the purchase of JDC’s 30% stake at a price that was under the expected price of US$160 million and looked forward to reaping the benefits of holding a 100% share of this up and coming company.
Now established as a world class drilling contractor and the contractor of choice for operators in the State of Qatar, GDI is a viable company that has improved its capabilities while diversifying into complimentary lines of business that include jack-up accommodation and liftboat operations. The size of GDI’s fleet is set to double from nine to eighteen in just three years with the arrival of 2 more units later this year.
Mr. Al-Mannai opined that the market value of JDC’s 30% interest exceeded its net book value with GDI’s fleet being fully utilized under favorable multiyear contracts. He also noted that opportunities for further expansion were being pursued by GDI.
GIS will comply with IFRS requirements in regards to this acquisition. With this acquisition, GDI becomes a 100% owned subsidiary of GIS and will be consolidated line by line starting 01 May 2014.