Oil and gas services firm Lamprell PLC (LAM.LN) Wednesday proposed a joint venture agreement with Saudi Aramco Development Company, the National Shipping Company of Saudi Arabia (Bahri) and Hyundai Heavy Industries Co. Ltd.
Lamprell said the parties have agreed to participate in a joint venture or JVCo with respect to the establishment, development and operation of a maritime yard for the construction, maintenance and repair of offshore drilling rigs and vessels which is to form part of the complex known as "The King Salman International Complex for Maritime Industries & Services" in the eastern province of the Kingdom of Saudi Arabia.
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Lamprell said it will invest up to a maximum of $140 million over the course of the construction of the Maritime Yard from existing financial resources and future cash flows and will hold 20% of JVCo's issued share capital.
Saudi Aramco will invest up to a maximum of $350.7 million, Bahri to invest up to a maximum $139.3 million and HHI is to invest up to a maximum $70.0 million, they will hold 50.1%, 19.9% and 10.0% of JVCo's issued share capital, respectively.
The aggregate cost of constructing the Maritime Yard is expected to be approximately $ 5.2 billion, of which $3.5 billion will be funded by the Government of the Kingdom of Saudi Arabia to establish, prepare and construct the site and shared infrastructure. The remaining cost of up to $1.7 billion, relating to the specific requirements of each zone, will be funded by JVCo.
Lamprell said it has received confirmation from Lamprell Holdings Ltd., which holds 33.12% of Lamprell's existing issued share capital, of its intention to vote in favor of the transaction at the general meeting on June 26.
-Write to Razak Musah Baba at email@example.com; Twitter: @Raztweet
(END) Dow Jones Newswires
May 31, 2017 02:29 ET (06:29 GMT)