Ocean Yield ASA (“Ocean Yield” or “Company”) has today entered into an agreement to sell the offshore construction and cable-lay vessel Connector to a third party. The vessel is expected to be delivered to the buyer during the fourth quarter.
Connector is a highly advanced subsea construction & cable-lay vessel that was operating on a long-term bareboat charter until February 2017. In anticipation of a market recovery, Ocean Yield has for the past years traded the vessel in the short-term market. As the market has remained challenging, Connector has contributed negatively to both net profit and cash flow.
Considering the current weak outlook for the oil service segment and that an industrial setup is required to operate the vessel efficiently in the cable-lay market, Ocean Yield believes it is in the best interest of the Company to dispose of the vessel as this will reduce the portfolio risk and improve net profit and cash flow. The sale will therefore strengthen the Company’s dividend capacity going forward.
The sale will be cash flow neutral after settlement of debt related to the vessel. Ocean Yield will record a non-cash book loss related to the sale of approximately USD 70 million in the Q4 2020 financial statements. The Company expects only a marginal decrease in the book equity ratio at the end of Q4 compared to Q3, mainly explained by a reduction in total assets due to the sale of Connector and prepayment of debt.