UAE-based Maritime Industrial Services Co. Ltd. has signed an agreement with Mosvold Middle East Jackup Ltd (MEJU) to settle the contractual dispute that began in August 2009 and which has since then been the subject of arbitration.
The agreement is will see MEJU enter into a new contract with MIS for the construction and delivery of Hull 106 for a total price of $160 million.
The new contract represents $100.5 million in cash, originally paid by MEJU as an advance payment on Hulls 106 and 108, will be reassigned wholly to Hull 106.
Additionally $30 million will be paid in cash on the date that the agreement becomes effective (the “effective date”), which is expected to be in July 2010.
The balance will be paid on delivery, or, at MEJU’s option and subject to interest and an arrangement fee, by no later than 30th June 2011.
The rig will remain in MIS’ possession until all sums due under the new contract are paid.
On the effective date both parties will withdraw all claims and counterclaims under the existing agreements that relate to Hulls 106 and 108 and the arbitration and any related legal action will formally cease.
MEJU will transfer to MIS unencumbered beneficial and legal title in Hull 108, which MIS will complete for its own account.
MIS is in discussion with potential partners with a view to the provision of any necessary operational and financial support.
Kevin Hudson, managing director of MIS, said “I am very pleased that MEJU and MIS have been able to resolve this costly dispute in a positive and amicable manner. I am even more delighted that MEJU has, through its decision to invest in a new contract, demonstrated its confidence in MIS’ ability to deliver another first class rig to match the exacting demands of the drilling market.”
