Page 41: of Maritime Reporter Magazine (July 2000)

FGH moves to get house in order

Those searching for tangible effects of a dramatic offshore drawdown need look no further than Friede Goldman

Halter. The company, which was rid- ing a crest of business powered by key acquisitions in the mid-90s, saw its plan thwarted when a host of factors conspired to drive oil prices into the ground. The result is a company which is managing a large amount of debt while positioning itself to regain its position atop the Gulf of Mexico boatbuilding and repair heap.

Although the company's backlog stands at an impressive $543 million, nearly 73 percent of that is due for delivery by the end of the year, and the boatbuilding market in the GOM area is still recovering and considered overcrowded by some, placing further price pressures.

Last month the company announced that it sold its vessel repair unit to

Bollinger Shipyards Inc. for $80 mil- lion. The all-cash deal with the Lock- port, La.-based company, which is expected to be completed this month, is structured as an asset sale and is subject to certain regulatory condi- tions. The vessel repair business is an operating unit of Halter Marine,

Friede Goldman Halter's Vessel seg- ment, and consists of five vessel repair and maintenance facilities devoted in

Louisiana and Texas. The company expects the $80 million transaction and an additional $33 million in tax refunds to be collected during 2000 to provide "significant additional liquidi- ty for Friede Goldman Halter as it enters a strengthening marketplace."

In another move to secure its finan- cial future, it was announced that

Friede Goldman Offshore Texas has reached a decision with Petrodrill IV and Petrodrill V concerning contract disputes over Friede Goldman's con- struction of two Amethyst-class deep- water semisubmersible drilling rigs for Petrodrill. The agreements have been approved by the boards of direc- tors for both companies by MarAd, which is providing loan guarantees for the project. The agreements call for the new delivery dates of Amethyst 4 and 5 to occur on September 15, 2001 and December 15, 2001, respectively.

Both parties have agreed to increase the float-out milestone payment by $3 million per rig and to a final $6.4 mil- lion payment per rig at delivery, result- ing in a new contract value of $186.8 million based upon the new delivery schedules. Both companies have also decided to terminate all pending litiga- tion related to the project.

July, 2000

R&B Falcon Reactivates

Offshore Fleet

R&B Falcon Corporation announced that six of its shallow water jackups and three of its drill barges would re-enter active service in the near future. To allow for crewing and final preparation for service, the activations are scheduled for the second and third quarters. Of the nine units re-entering service, three have firm contracts, four have contracts under negotiation, and 2 are in preliminary stages of discussions with operators.

OSV Fleet Expansion

Hornbeck Offshore Services, Inc. has begun a new vessel construction pro- gram to significantly increase the size of its seven-vessel offshore supply vessel (OSV) fleet. A contract was signed with

Leevac Shipyards to immediately begin construction of two ultra deepwater ves- sels with four to follow. The first vessel is expected to be delivered in February 2001. All vessels are expected to be completed within the next 20 months.

Hvide Marine/Sun State

Christens New Ship

Hvide Marine Incorporated (HMI) and subsidiary Sun State Marine Services,

Inc., christened the first in a series of new cargo ships at its U.S. shipyard

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