Siem Offshore Inc.

Transcription

Siem Offshore Inc.

Siem Offshore Inc.
Rights Offering of 454,430,000 New Shares
Subscription Price: NOK 1.80 per New Share
Subscription Period:
From 19 August 2015 to 16:30 hours (CET) on 2 September 2015
Trading in Subscription Rights:
From 19 August 2015 until the end of trading on the Oslo Stock Exchange on 31 August 2015
________________________
Siem Offshore Inc. (the "Company", and, together with its consolidated subsidiaries, "Siem Offshore" or the "Group") is
offering 454,430,000 new shares in the Company (the "New Shares") with a nominal value of USD 0.01 each, at a
subscription price of NOK 1.80 per New Share (the "Subscription Price"). Holders of the Company’s shares registered in
the Norwegian Central Securities Depository (the "VPS") as of 18 August 2015 (the "Existing Shareholders") are being
granted transferable subscription rights (the "Subscription Rights") that, subject to applicable law, provide preferential
rights to subscribe for and be allocated New Shares at the Subscription Price (such offering of New Shares upon the
exercise of Subscription Rights, the "Rights Offering").
Each Existing Shareholder will be granted 1.1724 Subscription Rights for each share registered as held by such Existing
Shareholder as of 18 August 2015 (the "Record Date"). Each Subscription Right will give the right to subscribe for and be
allocated one New Share. The subscription period commences on 19 August 2015 and expires at 16:30 hours, Central
European Time ("CET"), on 2 September 2015 (the "Subscription Period"). The Subscription Rights will be listed and
tradable on the Oslo Børs (the "Oslo Stock Exchange") under the ticker code SIOFF T from 19 August 2015 until the end
of trading on the Oslo Stock Exchange on 31 August 2015.
Subscription Rights that are not used to subscribe for New Shares before the expiry of the Subscription
Period, or that are not sold before the end of trading on the Oslo Stock Exchange on 31 August 2015, will have
no value and will lapse without compensation to the holder.
After the expiry of the Subscription Period, any New Shares that have not been subscribed for and allocated in the Rights
Offering will be subscribed and paid for at the Subscription Price by Siem Europe S.a r.l (the "Underwriter"), subject to
the terms and conditions of the Underwriting Agreement between the Company and the Underwriter dated 11 August 2015
(the "Underwriting Agreement").
The Company is not taking any action to permit a public offering of the Subscription Rights or the New Shares in any
jurisdiction outside of Norway. The New Shares are being offered only in those jurisdictions in which, and only to those
persons to whom, offers and sales of the New Shares (pursuant to the exercise of the Subscription Rights or otherwise)
may lawfully be made. The Subscription Rights and the New Shares have not been, and will not be, registered under the
United States Securities Act of 1933, as amended (the "US Securities Act"), or under the securities laws of any state of
the United States and may not be offered or sold (i) within the United States, except in transactions exempt from
registration under the US Securities Act, or (ii) outside the United States, except in offshore transactions in reliance on
Regulation S. The Rights Offering will not be made to persons who are residents of Australia, Canada, Hong Kong or Japan
or in any jurisdiction in which such offering would be unlawful. For more information regarding restrictions in relation to
the Rights Offering pursuant to this Prospectus, please see Section 14, "Selling and transfer restrictions" .
Investing in the Company’s shares (the "Shares"), including the New Shares, and trading in the Subscription
Rights involves certain risks. See Section 2, "Risk Factors" beginning on page 13.
The Company’s existing shares (the "Existing Shares") are listed on the Oslo Stock Exchange under the ticker code
"SIOFF".
Lead Manager
Swedbank
Receiving Agent
DNB Markets
The date of this Prospectus is 17 August 2015
IMPORTANT INFORMATION
This Prospectus has been prepared solely for use in connection with the Rights Offering and the Listing. Please see Section
16, "Definitions and glossary" for definitions of terms used throughout this Prospectus.
The Prospectus has been prepared to comply with the Norwegian Securities Trading Act of 29 June 2007 No. 75 (the
"Norwegian Securities Trading Act") and related secondary legislation, including the Commission Regulation (EC) No.
809/2004 implementing Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003
regarding information contained in prospectuses, as amended, and as implemented in Norway (the "Prospectus
Directive"). This Prospectus has been prepared solely in the English language. The Financial Supervisory Authority of
Norway (the "Norwegian FSA") has reviewed and approved this Prospectus in accordance with sections 7-7 and 7-8 of
the Norwegian Securities Trading Act. The Norwegian FSA has not controlled or approved the accuracy or completeness of
the information given in this Prospectus. The approval given by the Norwegian FSA only relates to the information included
in accordance with pre-defined disclosure requirements. The Norwegian FSA has not made any form of control or approval
relating to corporate matters described or referred to in this Prospectus.
The Company has engaged Swedbank as Manager and DNB Markets as Receiving Agent in the Rights Offering. Swedbank
and DNB Markets are acting for the Company and no one else in relation to the Rights Offering or the Listing. Swedbank
and DNB Markets will not be responsible to anyone other than the Company for providing the protections afforded to their
clients or for providing advice in relation to the listing.
No person is authorised to give information or to make any representation concerning the Group or in connection with the
Rights Offering other than as contained in this Prospectus. If any such information is given or made, it must not be relied
upon as having been authorised by the Company, the Manager or the Receiving Agent or by any of the affiliates, advisors
or selling agents of any of the foregoing.
The distribution of this Prospectus and the offer and sale of the New Shares may be restricted by law in certain
jurisdictions. This Prospectus does not constitute an offer of, or an invitation to purchase, any of the New Shares in any
jurisdiction in which such offer or sale would be unlawful. No one has taken any action that would permit a public offering
of the Shares to occur outside of Norway. Accordingly neither this Prospectus nor any advertisement or any other offering
material may be distributed or published in any jurisdiction except under circumstances that will result in compliance with
applicable laws and regulations. Persons in possession of this Prospectus are required to inform themselves about, and to
observe, any such restrictions. In addition, the Shares are subject to restrictions on transferability and resale in certain
jurisdictions and may not be transferred or resold except as permitted under applicable securities laws and regulations.
Investors should be aware that they may be required to bear the financial risks of this investment for an indefinite period
of time. Any failure to comply with these restrictions may constitute a violation of applicable securities laws. For further
information on the sale and transfer restrictions of the Shares, see Section 14, "Selling and transfer restrictions".
The information contained herein is current as at the date hereof and subject to change, completion and amendment
without notice. In accordance with section 7-15 of the Norwegian Securities Trading Act, significant new factors, material
mistakes or inaccuracies relating to the information included in this Prospectus, which are capable of affecting the
assessment of the Shares between the time of approval of this Prospectus by the Norwegian FSA and the Listing of the
Shares on the Oslo Stock Exchange, will be included in a supplement to this Prospectus. The publication of this Prospectus
shall not under any circumstances create any implication that there has been no change in the Group's affairs or that the
information herein is correct as of any date subsequent to the date of this Prospectus.
Neither the Company, the Manager nor the Receiving Agent, or any of their respective affiliates, representatives, advisers
or selling agents, are making any representation to any subscriber or purchaser of New Shares regarding the legality or
suitability of an investment in the New Shares. Each investor should consult with his or her own advisors as to the legal,
tax, business, financial and related aspects of a subscription or purchase of the New Shares.
In the ordinary course of their businesses, the Manager and the Receiving Agent and certain of their respective affiliates
have engaged, and may continue to engage, in investment and commercial banking transactions with the Company and its
subsidiaries.
This Prospectus and the terms and conditions of the Rights Offering as set out herein shall be governed by and construed
in accordance with Norwegian law. The courts of Norway, with Oslo as legal venue, shall have exclusive jurisdiction to
settle any dispute which may arise out of or in connection with the Rights Offering or this Prospectus.
NOTICE TO NEW HAMPSHIRE RESIDENTS
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER
CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT
THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE
CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA
421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR
EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN
ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON,
SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER,
CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.
NOTICE TO INVESTORS IN THE UNITED STATES
Because of the following restrictions, prospective investors are advised to consult legal counsel prior to making any offer,
resale, pledge or other transfer of the Shares. The New Shares have not been and will not be registered under the U.S.
Securities Act or with any securities regulatory authority of any state or other jurisdiction in the United States and may not
be offered, sold, pledged or otherwise transferred within the United States except pursuant to an exemption from, or in a
2
transaction not subject to, the registration requirements of the U.S. Securities Act and in compliance with any applicable
state securities laws. Accordingly, the New Shares will not be offered or sold within the United States, except in reliance on
the exemption from the registration requirements of the U.S. Securities Act under Rule 144A. The New Shares will be
offered outside the United States in compliance with Regulation S. Prospective purchasers are hereby notified that sellers
of New Shares may be relying on the exemption from the provisions of Section 5 of the U.S. Securities Act provided by
Rule 144A under the U.S. Securities Act. See Section 14.2.1 "Selling and transfer restrictions—Selling restrictions—United
States".
Any Shares offered or sold in the United States will be subject to certain transfer restrictions as set forth under Section
14.3.1 "Selling and transfer restrictions—Transfer restrictions—United States".
The securities offered hereby have not been recommended by any United States federal or state securities commission or
regulatory authority. Further, the foregoing authorities have not passed upon the merits of the Rights Offering or
confirmed the accuracy or determined the adequacy of this Prospectus. Any representation to the contrary is a criminal
offense under the laws of the United States.
In the United States, this Prospectus is being furnished on a confidential basis solely for the purposes of enabling a
prospective investor to consider purchasing the particular securities described herein. The information contained in this
Prospectus has been provided by the Company and other sources identified herein. Distribution of this Prospectus to any
person other than the offeree specified by the Manager or its representatives, and those persons, if any, retained to advise
such offeree with respect thereto, is unauthorised and any disclosure of its contents, without prior written consent of the
Company, is prohibited. This Prospectus is personal to each offeree and does not constitute an offer to any other person or
to the public generally to purchase New Shares or subscribe for or otherwise acquire any Shares.
NOTICE TO UNITED KINGDOM INVESTORS
This Prospectus is only being distributed to and is only directed at (i) persons who are outside the United Kingdom (the
"UK") or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (the "Order") or (iii) high net worth companies, and other persons to whom it may lawfully be
communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "Relevant
Persons"). The New Shares are only available to, and any invitation, offer or agreement to subscribe, purchase or
otherwise acquire such Shares will be engaged in only with, Relevant Persons. Any person who is not a Relevant Person
should not act or rely on this Prospectus or any of its contents.
NOTICE TO INVESTORS IN THE EEA
In any member state of the European Economic Area (the "EEA") that has implemented the Prospectus Directive, other
than Norway (each, a "Relevant Member State"), this communication is only addressed to and is only directed at
qualified investors in that Member State within the meaning of the Prospectus Directive. The Prospectus has been
prepared on the basis that all offers of New Shares outside Norway will be made pursuant to an exemption under the
Prospectus Directive from the requirement to produce a prospectus for offer of shares. Accordingly, any person making or
intending to make any offer within the EEA of New Shares which is the subject of the Rights Offering contemplated in this
Prospectus within any EEA member state (other than Norway) should only do so in circumstances in which no obligation
arises for the Company or the Manager to publish a prospectus or a supplement to a prospectus under the Prospectus
Directive for such offer. Neither the Company nor the Manager have authorised, nor do they authorise, the making of any
offer of Shares through any financial intermediary, other than offers made by the Manager which constitute the final
placement of New Shares contemplated in this Prospectus.
Each person in a Relevant Member State other than, in the case of paragraph (a), persons receiving offers contemplated in
this Prospectus in Norway, who receives any communication in respect of, or who acquires any New Shares under, the
offers contemplated in this Prospectus will be deemed to have represented, warranted and agreed to and with the
Manager and the Company that:
a)
it is a qualified investor as defined in the Prospectus Directive, and
b)
in the case of any New Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the
Prospectus Directive, (i) such New Shares acquired by it in the Rights Offering have not been acquired on behalf
of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State
other than qualified investors, as that term is defined in the Prospectus Directive, or in circumstances in which
the prior consent of the Manager has been given to the offer or resale; or (ii) where such New Shares have been
acquired by it on behalf of persons in any Relevant Member State other than qualified investors, the offer of those
New Shares to it is not treated under the Prospectus Directive as having been made to such persons.
For the purposes of this provision, the expression an "offer to the public" in relation to any of the New Shares in any
Relevant Member State means the communication in any form and by any means of sufficient information on the terms of
the offer and any Shares to be offered so as to enable an investor to decide to purchase any of the New Shares, as the
same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that
Relevant Member State, and the expression " Prospectus Directive" means Directive 2003/71/EC (and amendments
thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and
includes any relevant implementing measure in each Relevant Member State and the expression "2010 PD Amending
Directive" means Directive 2010/73/EU.
See Section 14, "Selling and Transfer Restrictions" for certain other notices to investors.
ENFORCEMENT OF CIVIL LIABILITIES
The Company is a company limited by shares incorporated under the laws of the Cayman Islands. As a result, the rights of
holders of the Company’s Shares will be governed by the laws of the Cayman Islands and the Company’s articles of
association (the "Articles of Association"). The rights of shareholders under the laws of the Cayman Islands may differ
from the rights of shareholders of companies incorporated in other jurisdictions. The majority of the members of the
Company’s board of directors (the "Board Members" and the "Board of Directors", respectively) and the members of
the senior management of the Group (the "Management") are not residents of the United States, and all of the
3
Company’s assets are located outside the United States. As a result, it may be difficult for investors in the United States to
effect service of process on the Company or its Board Members and members of Management in the United States or to
enforce in the United States judgments obtained in U.S. courts against the Company or those persons, including
judgments based on the civil liability provisions of the securities laws of the United States or any State or territory within
the United States. Uncertainty exists as to whether courts in Norway will enforce judgments obtained in other jurisdictions,
including the United States, against the Company or its Board Members or members of Management under the securities
laws of those jurisdictions or entertain actions in the Cayman Islands against the Company or its Board Members or
members of Management under the securities laws of other jurisdictions. In addition, awards of punitive damages in
actions brought in the United States or elsewhere may not be enforceable in the Cayman Islands. The United States and
the Cayman Islands do not currently have a treaty providing for reciprocal recognition and enforcement of judgements
(other than arbitral awards) in civil and commercial matters.
AVAILABLE INFORMATION
The Company has agreed that, for so long as any of the New Shares are "restricted securities" within the meaning of Rule
144(a)(3) under the U.S. Securities Act, it will during any period in which it is neither subject to Sections 13 or 15(d) of
the U.S. Securities Exchange Act of 1934, as amended (the "U.S. Exchange Act"), nor exempt from reporting pursuant to
Rule 12g3-2(b) under the U.S. Exchange Act, provide to any holder or beneficial owners of Shares, or to any prospective
purchaser designated by any such registered holder, upon the request of such holder, beneficial owner or prospective
owner, the information required to be delivered pursuant to Rule 144A(d)(4) of the U.S. Securities Act.
4
TABLE OF CONTENTS
1.
EXECUTIVE SUMMARY ........................................................................................................................... 1
2.
RISK FACTORS ....................................................................................................................................... 13
3.
RESPONSIBILITY FOR THE PROSPECTUS .................................................................................... 19
4.
GENERAL INFORMATION .................................................................................................................... 20
5.
PRESENTATION OF SIEM OFFSHORE INC. .................................................................................. 22
6.
INDUSTRY OVERVIEW ......................................................................................................................... 39
7.
CAPITALISATION AND INDEBTEDNESS ........................................................................................ 50
8.
SELECTED FINANCIAL INFORMATION ........................................................................................... 53
9.
BOARD OF DIRECTORS, MANAGEMENT, EMPLOYEES AND CORPORATE GOVERNANCE
60
10. CORPORATE INFORMATION .............................................................................................................. 70
11. SECURITIES TRADING IN NORWAY ............................................................................................... 81
12. TAXATION ................................................................................................................................................. 85
13. THE RIGHTS OFFERING ...................................................................................................................... 88
14. SELLING AND TRANSFER RESTRICTIONS ................................................................................. 100
15. ADDITIONAL INFORMATION ........................................................................................................... 105
16. DEFINITIONS AND GLOSSARY ....................................................................................................... 107
Appendix A:
Appendix B:
Appendix C:
Memorandum and Articles of Association
Annual financial statements 2014
Subscription Form
5
1.
EXECUTIVE SUMMARY
Summaries are made up of disclosure requirements known as "Elements". These
elements are numbered in Sections A – E (A.1 – E.7). This summary contains all the
Elements required to be included in a summary for this type of securities and issuer.
Because some Elements are not required to be addressed, there may be gaps in the
numbering sequence of the Elements. Even though an Element may be required to be
inserted in the summary because of the type of securities and issuer, it is possible that
no relevant information can be given regarding the Element. In this case a short
description of the Element is included in the summary with the mention of "not
applicable".
Section A – Introduction and warnings
A.1
Warning
This summary should be read as an introduction to the
Prospectus;
any decision to invest in the securities should be based on
consideration of the Prospectus as a whole by the investor;
where a claim relating to the information contained in the
Prospectus is brought before a court, the plaintiff investor might,
under the national legislation of the Member States, have to bear
the costs of translating the Prospectus before the legal
proceedings are initiated; and
A.2
Consent
to
use
of
the
prospectus
civil liability attaches only to those persons who have tabled the
summary including any translation thereof, but only if the
summary is misleading, inaccurate or inconsistent when read
together with the other parts of the prospectus or it does not
provide, when read together with the other parts of the
Prospectus, key information in order to aid investors when
considering whether to invest in such securities.
Not applicable; financial intermediaries are not entitled to use the
prospectus for subsequent resale or final placement of securities.
Section B – Issuer
B.1
Legal and
commercial
name
Siem Offshore Inc.
B.2
Domicile and
legal form,
legislation and
country of
incorporation
Siem Offshore Inc. is an exempted company limited by shares
incorporated under the laws of Cayman Islands with corporate
registration no. 140468.
B.3
Current
operations,
principal
activities and
markets
Siem Offshore’s primary activity is to own and operate offshore
support vessels for the offshore energy service industry. The
Group's fleet comprises of platform supply vessels, anchorhandling, tug, supply vessels, offshore subsea construction
vessels and a variety of other support vessels.
The Company’s fleet comprises of 55 offshore support vessels, of
which 9 vessels are under construction.
In addition to its primary activity, the Company has also
established a business division for its industrial investments. The
1
Group's industrial investment division includes the Group's
services as a contractor within the European offshore wind farm
and offshore cable laying market, the development of applications
for managed pressure drilling, a scientific core drilling vessel,
specialized engineering to develop and implement combat
management systems for navy vessels and certain other
investments.
B.4a
Significant
recent trends
affecting the
Company and
the industries
in which it
operates
The North Sea PSV and AHTS vessel market is continuing to
experience soft rates and utilization. Additional vessels have
entered the North Sea from other regions and as rig activity is
reduced, this places pressure on vessel utilization and fixture
rates. Vessel owners have placed vessels in lay-up and owners are
considering additional lay-ups.
The market for OSVs in Brazil has significantly softened following
lower demand activity from Petroleo Brasileiro SA (“Petrobras”).
When disclosing its five year business plan, Petrobras announced
reduced capital expenditures and highlighted cost cutting
measures with the intension to reduce leverage going forward. In
order for Petrobras to reduce its cost base, there is an increased
risk that Petrobras will initiate renegotiation of existing contracts
with suppliers, including vessel owners. It is in the opinion of the
Company that an increased risk of such contract renegotiations or
even contract cancellations for certain vessels of the Company
exists.
The outlook for the OSV market is expected to remain soft for
several years due to reduced investments in the offshore oil and
gas industry following lower current and future commodity prices
for oil and gas, which again reduces the demand for vessels and
puts pressure on utilisation and fixture rates, coupled with
increased supply of vessels as more vessels under construction
are delivered from yards.
In response to the soft OSV market, the Company has decided to
take two vessels out of operations and place into lay-up.
Siem Offshore Contractors experience steady tendering activity in
the offshore windfarm market (“OWF”) with scheduled marine
installation activities taking place in 2017 and 2018 and for
operations and maintenance contracts to be awarded in 2015.
There has been no significant change in the financial or trading
position of the Company since the end of the last financial period
for which interim financial information has been published. The
Company has in connection with preparing the reporting of its
second quarter 2015 results considered the fair value of its assets
versus the respective book values. It is clear that such
considerations will result in impairments on vessel values in the
second quarter 2015 results.
B.5
Description of
the Group
There has been no material adverse change in the prospects of
the issuer since the date of its last published audited financial
statements.
Siem Offshore Inc. is a holding company with no employees and is
therefore depended on services from its subsidiaries. These
services consist of administrative, operational and corporate
2
services provided by Siem Offshore Management AS and Siem
Offshore AS.
The Group's vessels are owned by several companies within the
Group. Siem Offshore Rederi AS currently owns all Norwegian,
Polish and German built vessels, except the OSCV “Siem
Spearfish” which is owned by Siem Offshore Construction Vessels
AS. Further, Siem Offshore Rederi AS owns 51% of Siem Offshore
Ghana International AS, which owns the PSV “Siem Sasha”, and
owns 51% of Siem Meling Offshore DA which owns two PSVs.
Siem Offshore Do Brazil S.A. owns the locally built Brazilian fleet.
Siem Offshore Canada Inc. owns 50% of Secunda Canada LP,
which again owns 6 Canadian flagged vessels and has 1 vessel
under construction. Siem Offshore Contractors GmbH, which will
utilize the cable lay vessel “Siem Aimery” and has the installation
support vessel “Siem Moxie” on a time charter, is owned 100% by
Siem Offshore Invest AS. Siem AHTS Pool AS manages a pool of
10 AHTS sister vessels (including 2 from a pool partner) in
accordance with a partner agreement.
B.6
Interests in
the Company
and voting
rights
The Group's industrial investments business division consists of
the subsidiaries Siem Offshore Contractors GmbH and Siem WIS
AS, Overseas Drilling Limited which owns the scientific core
drilling vessel “JOIDES Resolution” and certain property
investments, which are owned 100% by Siem Offshore Invest AS.
In addition, the combat management business in Siem Offshore
do Brasil SA is included in this business division.
Shareholders owning 5% or more of the Shares have an interest
in the Company's share capital which is notifiable pursuant to the
Norwegian Securities Trading Act.
As of the date of this Prospectus, Siem Europe S.a r.l. owns
133,279,421 shares in the Company, equal to 34.4% of the
issued Shares. Siem Europe S.a r.l. is the main shareholder of
Siem Offshore Inc. and is controlled by a trust whose potential
beneficiaries include members of Kristian Siem’s immediate
family. Kristian Siem is a Board Member of the Company.
Siem Europe S.a r.l. has underwritten the Rights Offering. If, as a
result of the underwriting, Siem Europe’s ownership interest is
increased above its current ownership interest and such new
ownership interest is not reduced by the sale of Shares down to or
below the level of the current ownership interest within four
weeks, then Siem Europe will be required to make a mandatory
offer for all Shares in accordance with existing regulations.
The Company is not aware of any other agreements that at a later
stage may lead to change of control of the Company.
3
B.7
Selected
historical key
financial
information
The table below sets out selected data from the Group’s
consolidated income statement for the year ended 31 December
2014 and for the three months period ended 31 March 2015.
Consolidated Income Statements
2015
Jan-Mar
Unaudited
125 995
-77 096
-10 160
38 739
-26 750
-15
92
-36 052
-23 986
2014
Jan-Dec
Audited
491 312
-250 153
-47 033
194 125
-96 883
-29 000
18 728
368
-3 023
84 316
Financial revenues
Financial expenses
Result from associated companies
Net currency gain (loss)
Net financial items
2 249
-11 934
-553
10 022
-216
9 091
-55 868
1 808
34 092
-10 877
Profit/(loss) before taxes
-24 203
73 439
Tax benefit / (expense)
Net profit/(loss)
Net profit/ (loss) attributable to non-controlling interest
Net profit/ (loss) attributable to shareholders
Weighted average number of shares outstanding ('000)
Earnings(loss) per share (basic and diluted)
-1 360
-25 562
-49
-25 612
387 591
-0.07
-2 729
70 710
12 563
58 147
387 591
0.15
2015
1Q
Unaudited
-25 562
2014
Jan-Dec
Audited
70 710
-
1 510
-32 392
-3 797
-61 751
-48
-61 799
-14 622
-11 100
46 499
12 271
34 228
(Amounts in USD 1 000)
Operating revenues
Operating expenses
Administration expenses
Operating margin
Depreciation and amortisation
Impairment of vessels
Gain (loss) on sales of fixed assets
Gain of sale of interest rate derivatives (CIRR)
Gain (loss) on currency derivative contracts
Operating profit
Comprehensive Income Statements
Net profit/(loss)
Other comprehensive income (expense)
Items that will not be reclassified to profit or loss
Pension remeasurement gain (loss)
Items that may be subsequently reclassified to profit or loss
Cash flow hedges
Currency translation differences
Total comprehensive income for the period
4
consolidated statement of financial position as of 31 December
2014 and 31 March 2015.
Consolidated Statements of Financial Position
Non-current assets
Vessels and equipment
Vessels under construction
Capitalised project cost
Investment in associates and other long-term receivables
CIRR loan deposit 1)
Deferred tax asset
Intangible assets
Total non-current assets
Debtors, prepayments and other current assets
Asset held-for-sale
Cash and cash equivalents
Total current assets
Total assets
31.03.2015
Unaudited
31.12.2014
Audited
1 596 220
127 035
10 022
35 051
26 145
12 587
23 905
1 830 966
130 875
104 110
89 668
324 654
1 743 693
130 515
10 965
43 654
28 453
12 591
25 937
1 995 809
147 152
117 623
264 774
2 155 619
2 260 584
Equity
Paid-in capital
Other reserves
Retained earnings
Shareholders´ equity
Non-controlling interest
Total equity
Liabilities
Borrowings
CIRR loan 1)
Other non-current liabilities
Total non-current liabilities
Borrowings
Accounts payable and other current liabilities
Total current liabilities
526 236
-86 796
279 060
718 500
36 497
754 997
526 236
-45 491
304 237
784 982
38 666
823 649
971 402
26 145
40 985
1 038 532
192 624
169 467
362 091
1 087 757
28 453
38 532
1 154 742
126 603
155 590
282 193
Total liabilities
1 400 623
1 436 935
Total equity and liabilities
2 155 619
2 260 584
1) Commercial Interest Reference Rate
5
consolidated statements of cash flows for the year ended 31
December 2014 and for the three months period ended 31 March
2015.
Consolidated Statements of Cash Flows
2015
Jan-Mar
Unaudited
2014
Jan-Dec
Audited
-12 435
-13 092
-1 360
553
15
336
26 750
27 264
-5 538
-92
5 400
27 802
117 702
-46 362
-8 957
-1 808
-18 728
2 462
96 883
29 000
5 612
19 918
-368
-11 010
184 345
Cash flow from investing activities
Interest received
Investments in fixed assets
Proceeds from sale of fixed assets
Dividend from associated companies
Investment in associated companies
956
-16 730
0
-2 251
-18 024
4 171
-525 674
76 290
278
-12 201
-457 136
Cashflow from financing activities
Proceeds from issue of new equity
Dividend payment
Contribution from non-controlling interests of consolidated subsidiaries
Proceeds from bank overdraft
Proceeds from new long-term borrowing
Repayment of long-term borrowing
Cash flow from financing activities
-1 309
1 335
-25 489
-25 463
1 336
-6 533
5 624
447 701
-131 936
316 192
Net change in cash
-15 686
43 400
Cash at bank start of period
Effect of exchange rate differences
Cash at bank end of period
117 621
-12 267
89 668
101 206
-26 985
117 621
Cash flow from operations
Profit before taxes, excluding interest
Interest paid
Taxes paid
Results from associated companies
Loss/(gain) on sale of assets
Value of employee services
Impairments of vessels
Effect of unreal. currency exchange forward contracts
Change in short-term receivables and payables
CIRR
Other changes
Net cash flow from operations
6
consolidated statement of changes in equity for the year ended 31
December 2014 and for the three months period ended 31 March
2015.
Consolidated Statement of Changes in Equity
Equity on January 1, 2015
Change previous periods
Net profit to shareholders
Cash flow hedge
Total comprehensive income / (expense)
Share issues in partially owned subsidiaries
Capital reduction in partially owned subsidiaries
Equity on March 31, 2015
(Amount in USD 1 000)
Pension remeasurement
Buy back of shares
Dividend paid
Shares issues in Siem Offshore Inc
Equity on December 31, 2014
Share
premium
reserves
522 361
Other
reserves
-45 491
0
0
-32 392
-8 913
-41 305
-25 177
3 876
522 361
-86 796
279 060
Total no. of
shares Share capital
387 591 380
3 876
Share
premium
reserves
522 361
Other
reserves
-19 769
Retained
earnings
250 161
-1 510
58 147
2 462
1 510
0
0
-25 721
-25 721
0
0
Total no. of
387 591 380
3 876
387 591 380
Retained
earnings
304 237
0
-25 513
336
60 609
-6 533
387 591 380
3 876
522 361
-45 491
304 237
Shareholders'
equity
784 983
0
-25 513
336
-32 392
-8 913
-66 482
0
718 501
Shareholders'
equity
756 629
-1 510
58 147
2 462
1 510
-25 721
34 887
0
0
-6 533
0
784 983
NonControlling
interest Total equity
38 666
823 649
0
-49
-25 562
336
-32 392
1
-8 912
-48
-66 531
152
152
-2 274
-2 274
36 496
754 997
NonControlling
37 260
793 888
-1 510
12 563
70 710
2 462
1 510
-293
-26 014
12 271
47 158
1 336
1 336
-12 201
-12 201
0
-6 533
0
38 666
823 649
B.8
Selected key
pro forma
financial
information
Not applicable. There is no pro forma financial information.
B.9
Profit forecast
or estimate
Not applicable. No profit forecasts or estimates are made.
B.1
0
Audit report
qualifications
Not applicable. There are no qualifications in the audit reports.
B.1
1
Working
capital
As of the annual reporting for the fiscal year 2014, the Company
was of the opinion that it had sufficient working capital for the
next 12 months based on the assumptions of the OSV market at
that time. Based on an unfavourable development and assumed
continued soft OSV market, the shortfall for the Company’s
working capital is currently expected to materialize in second half
of 2015 given regular debt schedule payments and payments
related to the existing newbuilding program.
Accordingly, it is the Company's opinion that the Group at present
time does not have sufficient working capital for its current
requirements, i.e. for the next 12 months.
In order to prepare the Company for the expected soft OSV
market and meet the Group's current debt obligations and make
payments under the Group's newbuilding program for a period of
twelve months from the date of this Prospectus, the Company is
dependent on additional financing of approximately USD 100
million. The additional financing will be raised through the fully
underwritten Rights Offering as described in this Prospectus.
7
Section C – Securities
C.1
Type and class
of securities
admitted to
trading and
identification
numbers
C.2
Currency
C.3
Number of
shares and
par value
C.4
Right attached
to the
securities
C.5
Restrictions
on
transferability
Admission to
trading
C.6
C.7
Dividend
policy
Listing of New Shares to be issued in the Rights Offering. The
Company has one class of Shares and all shares are equal in all
respects.
The New Shares will have the same VPS registrar and the same
International Securities Identification Number (“ISIN”) as the
Company’s other shares (ISIN KYG813131011). The Company's
Shares are listed on the Oslo Stock Exchange and are traded
under the ticker symbol "SIOFF".
The Subscription Rights will be fully tradable and listed on the
Oslo Stock Exchange with ticker code "SIOFF T" and with ISIN
KYG812291097 from 19 August 2015 until the end of trading on
the Oslo Stock Exchange on 31 August 2015.
The Shares are issued in USD, but trading activity is denominated
in NOK.
The issued share capital of the Company as of the date of this
Prospectus is USD 3,875,913.80 divided into 387,591,380 Shares
each with a nominal value of USD 0.01 fully paid. Following the
Rights Offering, the issued share capital will be USD 8,420,213.80
divided into 842,021,380 Shares.
The Company has one class of Shares, and each Share carries one
vote and has equal rights to dividend. All the Shares are validly
issued and fully paid. All of the Company’s shareholders have
equal voting rights.
Not applicable. The Shares are freely transferable according to
Cayman Islands law and the Company’s Articles of Association.
The Shares are listed on the Oslo Stock Exchange, under Oslo
Børs ticker symbol “SIOFF”. The listing on the Oslo Stock
Exchange of the New Shares is subject to the approval of the
Prospectus by the Norwegian Financial Supervisory Authority
(Norwegian: Finanstilsynet) under the rules of the Norwegian
Securities Trading Act. Such approval was granted on 17 August
2015. The first day of trading of the New Shares on the Oslo
Stock Exchange, will be on or about 18 September 2015.
The priorities for the use of Company funds are determined by the
Board of Directors and recommendations of Management
influenced by existing conditions. At present, priorities for use of
funds in order of importance are repayment of debt, investment
opportunities in the business, and the return of capital to the
shareholders in form of share buy-back or dividends.
Section D – Risks
D.1
Key risks
specific to the
Group or its
industry
Prospective investors should consider, among other factors, the
following financial risks relating to the Group:
•
•
The Group is financed by debt and equity. If the Group
requires additional equity financing, it may be unable to
raise new equity, or arrange new borrowing facilities, on
favorable terms and in amounts necessary to conduct its
ongoing and future operations.
The Group is exposed to currency risk as part of the
revenue and costs are denominated in other currencies
8
•
•
than USD.
The Group is exposed to changes in interest rates as a
portion of the long-term interest-bearing debt is subject to
floating interest rates with the remaining amount subject
to fixed interest rates.
The Group's vessels operate in several jurisdictions and the
Group may not be able to minimize withholding taxes when
operating vessels abroad, avoiding double taxation, and
minimizing corporate tax.
following risks relating to the Group and its business:
•
•
•
•
•
•
•
•
D.3
Key risks
specific to the
securities
Demand for the Group’s services and products is sensitive
to oil and gas price fluctuations, low production levels and
disappointing exploration results and possible political
incidents.
The Group's business is subject to possible liabilities
caused by technical, operational and commercial actions,
harsh weather, capsizing, groundings, collisions, engine
problems, technical problems, navigation errors and other
conditions beyond the Company’s control.
Claims brought against the Group could result in a court
judgment or settlement or a nature or in an amount that is
not covered, in whole or in part, by the Group’s insurance
or that it is in excess of the limits of the Company’s
insurance coverage.
The Group is subject to the risk of not receiving the vessels
currently under construction on time, at budget and with
agreed specifications.
There is a risk that the process of integrating the new
vessels into the Group will provoke unforeseen challenges
which may not be effectively manageable by the
organization.
The Group's vessels' service life may be shorter than
expected.
The market balance for offshore support vessels has
recently been negatively influenced by excessive newbuild
activity, which has led to a stronger growth in supply of
vessels than in the demand for vessels.
The Group's operations involve the use and handling of
materials that can be environmentally hazardous.
If any of the abovementioned risks were to continue or
materialise, individually or together with other circumstances,
they could have a material and adverse effect on the Group
and/or its business, financial condition, results of operations, cash
flows and/or prospects, which could cause a decline in the value
and trading price of the New Shares, resulting in the loss of all or
part of an investment in the New Shares.
following risks relating to the securities described herein:
•
•
To the extent that an existing shareholder does not
exercise its Subscription Rights prior to the expiry of the
Subscription Period, such shareholder will have their
holdings and voting interests diluted.
An active trading market in the Subscription Rights may
9
•
•
•
not develop on the Oslo Stock Exchange.
Certain existing shareholders may be unable to take up
and exercise their Subscription Rights as a matter of
applicable law.
The Company's shares are subject to price volatility for a
number of reasons, including the Company's financial
results and general market conditions outside the
Company's control.
If the Company raises additional funds by issuing
additional equity securities, the holdings and voting
interests of existing shareholders could be diluted.
If any of the abovementioned risks were to materialise,
individually or together with other circumstances, they could have
a material and adverse effect on the Group and/or its business,
financial condition, results of operations, cash flows and/or
prospects, which could cause a decline in the value and trading
price of the New Shares, resulting in the loss of all or part of an
investment in the New Shares.
Section E – Offer
E.1
E.2a
E.3
Net proceeds
and estimated
expenses
Reasons for
the Offering
and use of
proceeds
Terms and
conditions of
the Offering
The subscription price per share is NOK 1.80, amounting to an
aggregate subscription price and gross proceeds of approximately
USD 100 million under the Rights Offering. The Rights Offering is
fully underwritten by Siem Europe S.a r.l.
The total expenses which will be covered by the Company in
connection with the Rights Offering is expected to amount to
approximately NOK 9 million.
The Company intends to use the net proceeds to serve interest
and instalments on its debt in accordance with its repayment
schedules and thereby continue to reduce the Company's debt
leverage.
The Subscription Price in the Rights Offering is NOK 1.80 per New
Share. The Subscription Price represents a discount of
approximately 14.29% to the closing price of NOK 2.10 per Share
as quoted on 10 June 2015.
The Subscription Period will commence on 19 August 2015 and
end on 2 September 2015 at 16:30 hours (CET). The Subscription
Period may not be extended.
Shareholders who are registered in the Company’s shareholder
register in the VPS as of 18 August 2015 (the Record Date) will
receive Subscription Rights.
Provided that the delivery of traded Shares is made with ordinary
T+2 settlement in the VPS, Shares that are acquired until and
including 14 August 2015 will give the right to receive
Subscription Rights, whereas Shares that are acquired from and
including 17 August 2015 will not give the right to receive
Subscription Rights.
Existing Shareholders will be granted Subscription Rights giving a
preferential right to subscribe for and be allocated New Shares in
the Rights Offering. Each Existing Shareholder will be granted
1.1724 Subscription Rights for each Existing Shares registered as
10
held by such Existing Shareholder on the Record Date. The
number of Subscription Rights granted to each Existing
Shareholder will be rounded down to the nearest whole
Subscription Right. Each Subscription Right will, subject to
applicable securities laws, give the right to subscribe for and be
allocated one New Share in the Rights Offering.
The Subscription Rights will be credited to and registered on each
Existing Shareholder’s VPS account on or about 19 August 2015
under the International Securities Identification Number (ISIN)
KYG812291097. The Subscription Rights will be distributed free of
charge to Existing Shareholders.
The Subscription Rights may be used to subscribe for New Shares
in the Rights Offering before the expiry of the Subscription Period
on 2 September 2015 at 16:30 hours (CET) or be sold before the
end of trading on the Oslo Stock Exchange on 31 August 2015.
Acquired Subscription Rights will give the same right to subscribe
for and be allocated New Shares as Subscription Rights held by
Existing Shareholders on the basis of their shareholdings on the
Record Date.
The Subscription Rights, including acquired Subscription Rights,
must be used to subscribe for New Shares before the end of the
Subscription Period (i.e., 2 September 2015 at 16:30 hours
(CET)) or be sold before the end of trading on the Oslo Stock
Exchange on 31 August 2015. Subscription Rights which are not
sold before the end of trading on the Oslo Stock Exchange on 31
August 2015 or exercised before 2 September 2015 at 16:30
hours (CET) will have no value and will lapse without
compensation to the holder. Holders of Subscription Rights
(whether granted or acquired) should note that subscriptions for
New Shares must be made in accordance with the procedures set
out in this Prospectus.
The Subscription Rights will be fully tradable and listed on the
Oslo Stock Exchange with ticker code "SIOFF T" from 19 August
2015 until the end of trading on the Oslo Stock Exchange on 31
August 2015.
E.4
Material and
conflicting
interests
The Rights Offering will be completed. If the Rights Offering is not
fully subscribed, the Underwriting Agreement will remain in full
force and effect and secure a fully subscribed Rights Offering.
The Manager or its affiliates have provided from time to time, and
may provide in the future, investment and commercial banking
services to the Company and its affiliates in the ordinary course of
business, for which they may have received and may continue to
receive customary fees and commissions. The Manager, its
employees and any affiliate may currently own Existing Shares in
the Company. Further, in connection with the Rights Offering, the
Manager, its employees and any affiliate acting as an investor for
its own account may receive Subscription Rights (if they are
Existing Shareholders) and may exercise its right to take up such
Subscription Rights and acquire New Shares, and, in that
capacity, may retain, purchase or sell Subscription Rights or New
Shares and any other securities of the Company or other
investments for its own account and may offer or sell such
securities (or other investments) otherwise than in connection
11
with the Rights Offering. The Manager does not intend to disclose
the extent of any such investments or transactions otherwise than
in accordance with any legal or regulatory obligation to do so.
E.5
E.6
E.7
Selling
Shareholders
and lock-up
Dilution
resulting from
the Offering
Estimated
expenses
charged to
investor
Not applicable.
The dilutive effect following the Rights Offering represents an
immediate dilution of approximately 54% for Existing
Shareholders who do not participate in the Rights Offering.
Not applicable. The Company will not charge any costs, expenses
or taxes directly to any shareholder or to any investor in
connection with the Rights Offering.
12
2.
RISK FACTORS
An investment in the Company and the New Shares involves inherent risks. Before
making an investment decision with respect to the New Shares, investors should
carefully consider the risk factors set forth below and all information contained in this
Prospectus, including the Financial Statements and related notes. The risks and
uncertainties described in this Section 2 are the principal known risks and uncertainties
faced by the Group as of the date hereof that the Company believes are relevant to an
investment in the New Shares.
An investment in the New Shares is suitable only for investors who understand the risks
associated with this type of investment and who can afford to lose all or part of their
investment. The absence of negative past experience associated with a given risk factor
does not mean that the risks and uncertainties described in that risk factor are not a
genuine potential threat to an investment in the New Shares. If any of the following risks
were to materialise, individually or together with other circumstances, they could have a
material and adverse effect on the Group and/or its business, financial condition, results
of operations, cash flows and/or prospects, which could cause a decline in the value and
trading price of the New Shares, resulting in the loss of all or part of an investment in
the New Shares.
The order in which the risks are presented does not reflect the likelihood of their
occurrence or the magnitude of their potential impact on the Group’s business, financial
condition, results of operations, cash flows and/or prospects. The risks mentioned herein
could materialise individually or cumulatively. The information in this Section 2 is as of
the date of this Prospectus. Furthermore, risks that the Company currently feels are not
material could in the future prove to become significant to the Group.
2.1
Financial risks
2.1.1
Financial leverage
The companies in the Group are financed by debt and equity. If the Group fails to repay
or refinance its loan facilities, additional equity financing may be required. There can be
no assurance that the Group will be able to repay its debts or extend their re-payment
schedule through re-financing of the loan agreements or not experience net cash flow
shortfalls exceeding the Group’s available funding sources or to comply with a minimum
cash requirements, nor can there be any assurance that the Group will be able to raise
new equity, or arrange new borrowing facilities, on favorable terms and in amounts
necessary to conduct its ongoing and future operations, should this be required.
In the event of insolvency, liquidation or similar event relating to a subsidiary of the
Company, all creditors of such subsidiary would be entitled to payment in full out of the
assets of such subsidiary before the Company, as a shareholder, would be entitled to
any payments. Defaults by, or the insolvency of, a subsidiary of the Company could
result in the obligation of the Company to make payments under parent company
guarantees issued in favour of such subsidiary.
2.1.2
Interest rates and currency fluctuations
For the Company, USD is the functional and reporting currency. The Group is exposed to
currency risk as part of the revenue and costs are denominated in other currencies than
USD. The Group is also exposed to currency risk due to future yard instalments in
relation to shipbuilding contracts and long-term debt in various currencies other than
USD. The Company is exposed to foreign exchange risk of its subsidiaries, including the
development of the Brazilian real. The Shares listed on the Oslo Stock Exchange are
quoted in NOK. There is a foreign exchange risk associated with conversion from the
reporting currency to NOK.
13
The Group is exposed to changes in interest rates as a portion of the long-term interestbearing debt is subject to floating interest rates with the remaining amount subject to
fixed interest rates. This may affect the Company’s financial results significantly.
2.1.3
Risks related to loan agreements, restrictions on dividends and distribution
The Group’s current and future loan agreements may include terms, conditions and
covenants which impose restrictions on the operations of the Group. These restrictions
may negatively affect the Group’s operations, hereunder, but not limited to, the Group’s
ability to meet the fierce competition in the market in which it operates.
2.1.4
Additional capital requirements
The Company may require additional capital in the future due to unforeseen liabilities or
in order for it to take advantage of business opportunities. There can be no assurance
that the Company will be able to obtain necessary financing in a timely manner on
acceptable terms. Future share issues may result in the existing shareholders of the
Company sustaining dilution to their relative proportion of the equity in the Company.
2.1.5
Risks related to possible tax liabilities
The Group will seek to optimize its tax structure to minimize withholding taxes when
operating vessels abroad, avoiding double taxation, and minimizing corporate tax paid
by optimally making use of the shipping taxation rules that applies. It is, however, a
challenging task to optimize taxation, and there is always a risk that the Group may end
up paying more taxes than the theoretical minimum, which may in turn affect the
financial results negatively.
2.2
Commercial risks
2.2.1
Market risks
Demand for offshore support vessel services in connection with exploration, development
and production in the offshore oil and gas industry is particularly sensitive to oil and gas
price fluctuations, low production levels and disappointing exploration results as well as
possible political incidents. Demand for the Group’s services and products may also be
negatively impacted by increased supply of similar or other complementary vessels into
the markets where the Group operates.
2.2.2
Possible liabilities
Offshore support operations are associated with considerable risks and responsibilities,
including technical, operational, environmental, commercial and political risks. In
addition, offshore operations may be affected by harsh weather, capsizing, groundings,
collisions, engine problems, technical problems, navigation errors and other conditions
beyond the Group’s control.
2.2.3
Inadequate insurance
Although the Group maintains liability insurance coverage it believes to be in line with
industry practice, any claim that may be brought against the Group could result in a
court judgment or settlement or a nature or in an amount that is not covered, in whole
or in part, by the Group’s insurance or that it is in excess of the limits of the Company’s
insurance coverage. The Group’s insurance policies also have various exclusions,
including for certain geographic regions, gross negligence caused by the Company or its
employees or vessel personnel and for certain pollution or environmental damage. The
Group will have to pay any amounts awarded by a court or negotiated in a settlement
that exceed the Company’s coverage limitations or that are not covered by the Group’s
insurance, and the Group may not have, or be able to obtain, sufficient capital to pay
such amounts. This may have a material adverse effect on the Group’s business,
revenue, profit and financial condition.
14
2.2.4
Dependence on key employees
The development of the Company is dependent on the ability of the senior management
to manage the current project portfolio and obtain new and profitable contracts.
Although no single person is solely instrumental in fulfilling either of these business
objectives, there is no guarantee that they will be achieved to the degree expected.
The Group’s business and prospects depend to a significant extent on the continued
services of its key personnel. Financial difficulties and other factors could negatively
impact the Group’s ability to retain key employees. The loss of any of the members of its
senior management or other key personnel or the inability to attract a sufficient number
of qualified employees could adversely affect its business and results of operations.
2.2.5
Delivery of vessels under construction
The Group currently has 9 vessels under construction. The process for construction of
new offshore vessels is associated with numerous risks. Among the most critical risk
factors in relations to such construction is the risk of not receiving the vessels on time,
at budget and with agreed specifications. In addition, there is the risk of the different
yards experiencing financial or operational difficulties resulting in bankruptcy or
otherwise adversely affecting the construction process.
The Group has obtained certain guarantees of financial compensation including refund
guarantees in case of delays and non-delivery, and it has the right to cancel contracts if
delivery of vessels is significantly delayed. However, no assurance can be given that all
risks have been fully covered.
Delays and non-delivery of the vessels under construction are likely to result in a loss of
income for the Group, and could also possibly lead to breach of contract in respect of
contracts entered into between the Group and third parties concerning employment of
vessels.
2.2.6
Integration of vessels under construction
With 9 vessels under construction, including one under construction by the 50% owned
company Secunda, and the subsequent delivery of the vessels, the scale and complexity
of operations at the Group will increase going forward. There is a risk that the process of
integrating the new vessels into the Group will provoke unforeseen challenges which
may not be effectively manageable by the organization.
2.2.7
Service life and technical and operational risks
The service life of modern offshore support vessels is generally considered to exceed
thirty years, but may ultimately depend on its efficiency and demand for such
equipment. There can be no guarantees that the Group’s current and future fleet will
have a long service life. The vessels may have particular unforeseen technical problems
or deficiencies, new environmental requirements may be enforced, or new technical
solutions or vessels may be introduced that are more in demand than the Group’s
vessels, causing less demand and use of these vessels.
2.2.8
New capacity entering the market
It typically takes approximately 12-18 months from the time an offshore support vessel
is ordered until it is delivered, depending on its complexity and the order backlog at the
ship yards. The market balance for offshore support vessels has recently been negatively
influenced by excessive newbuild activity, which has led to a stronger growth in supply
of vessels than in the demand for vessels. This may consequently negatively affect the
results and asset values of the Group.
15
2.2.9
The risk of new technological developments
The market for oil and gas technologies has developed towards a single competitive
market for concepts and technological solutions. Companies with the best solutions will
therefore achieve a strong competitive position in both markets. In the long run, a
competitive advantage in products and services for offshore services will be achieved
through continuous development and commercialization of new technical solutions.
There can be no assurance that the Group will be able to maintain its current competitive
position in this respect.
The Group’s ability to secure its intangible rights legally is important since the
development of the Group will to some extent depend on its technological advances.
Third parties might act in violation of these rights and it is not possible to achieve
protection of intangible rights in certain countries. There can be no assurance that the
Group will be able to sufficiently secure its intellectual property and other intangible
rights.
2.3
Other risks
2.3.1
Political risks
The Group has among others operations and investments in countries that are regarded
as unsafe and politically unstable. Activities in these countries will often involve greater
risk, including unfavorable changes in tax laws and other laws, partial or full
expropriation, currency volatility and restrictions on currency transfer, disruption of
operations because of labour disputes or political riots or wars, and some individual
countries’ requirements for some local ownership interests.
The Group’s operations are moreover subject to laws, regulations and supervisory rules
in the country where the activity is performed. The operations of the Group may be
negatively affected by changes in environmental laws and other regulations that can
result in large expenses in, for example, modification of vessels and changes in the
operation of vessels.
2.3.2
Environmental risks
The Group’s operations involve the use and handling of materials that can be
environmentally hazardous. Environmental legislation has in general become stricter in
the countries in which the Group operates. These laws and regulations might expose the
Group to liability due to events caused by others or by it, even though the actions were
consistent with existing laws at the time. In the event of liability arising due to the action
of a customer, the Group would expect to get some contractual compensation from that
customer through contractual regulations for events such as pollution and other
environmental damage. However, there can be no assurance that the compensation
granted in such events, if at all granted, will cover the losses suffered.
2.4
Risks related to the Shares and the Rights Offering
2.4.1
Dilution as a result of non-participation in Rights Offering.
Subscription Rights that are not exercised by the end of the Subscription Period will
automatically expire without compensation to the holder. To the extent that an existing
shareholder does not exercise its Subscription Rights prior to the expiry of the
Subscription Period, whether by choice or due to a failure to comply with procedures set
forth in Section 13, "The Rights Offering", or to the extent that an existing shareholder is
not permitted to subscribe for New Shares, such existing shareholders’ proportionate
ownership and voting interests in the Company after the completion of the Rights
Offering will be diluted. Even if an existing shareholder elects to sell its unexercised
Subscription Rights, or such Subscription Rights are sold on its behalf, the consideration
it receives on the trading market for the Subscription Rights may not reflect the
16
immediate dilution in its shareholding as a result of the completion of the Rights
Offering.
2.4.2
Absence of active trading market in Subscription Rights.
An active trading market in the Subscription Rights may not develop on the Oslo Stock
Exchange. In addition, because the trading price of the Subscription Rights depends on
the trading price of the Shares, the price of the Subscription Rights may be volatile and
subject to the same risks as described for the Shares in the below risk factors. The
existing volatility of the Shares may also have an effect on the volatility of the
Subscription Rights.
2.4.3
Sales of Subscription Rights.
Certain existing shareholders may be unable to take up and exercise their Subscription
Rights as a matter of applicable law. The Subscription Rights of such existing
shareholders, with the exception of Subscription Rights held through financial
intermediaries, will, to the extent possible, be sold on their behalf in the market by the
Manager and the Receiving Agent pursuant to instructions from the Company, but no
assurance can be given as to whether such sales may actually take place or as to the
price that may be achieved. Other existing shareholders may also choose not to exercise
their Subscription Rights and therefore sell them in the market. The sale of Subscription
Rights by or on behalf of existing shareholders could cause significant downward
pressure on, and may result in a substantial reduction in, the price of the Subscription
Rights and the Shares.
2.4.4
Volatility of the share price
The trading price of the Shares could fluctuate significantly in response to quarterly
variations in operating results, adverse business developments, interest rate, changes in
financial estimates by securities analysts, matters announced in respect of major
customers or competitors, or changes to the regulatory environment in which the
Company operates.
The market price of the Shares could decline due to sales of large numbers of Shares in
the market or the perception that such sales could occur. Such sales could also make it
more difficult for the Company to offer equity securities in the future at a time and at a
price that are deemed appropriate.
In recent years, the securities markets in Norway and elsewhere in Europe, have
experienced a high level of price and volume volatility, and the market price of securities
of many companies have experienced wide fluctuations in price which have not
necessarily been related to the operating performance, underlying asset values or
prospects of such companies. There can be no assurance that continual fluctuations in
price will not occur. It is likely that the quoted market price for the Shares will be subject
to market trends generally, notwithstanding the financial and operational performance of
the Company.
2.4.5
Difficulties for foreign investors to enforce civil liabilities in Cayman Islands
The Company is organized under the laws of Cayman Islands. The rights of holders of
Shares are governed by Cayman Islands law and by the Articles of Association. These
rights may differ from the rights of shareholders in other jurisdictions, including Norway.
As a result, it may, inter alia, be difficult for a shareholder to take legal action against
the Company and/or its directors in the investor’s own jurisdiction, or to enforce against
them judgments obtained in non-Cayman Islands courts.
17
2.4.6
Restrictions on ability to transfer or resell the Shares without registration under
applicable securities laws
The Shares are being offered and sold pursuant to an exemption from registration under
the U.S. and applicable state securities laws. Therefore, the Shares may only be
transferred or resold in the U.S. in a transaction registered under or exempt from the
registration requirements of the applicable securities laws, and U.S. Shareholders may
be required to bear the risk of their investment for an indefinite period of time. The
Company does not currently anticipate registering any resale transaction under
applicable securities laws.
2.4.7
Dilution as a result of future share issue
The Company may in the future decide to offer additional Shares or other securities in
order to finance new capital-intensive projects, in connection with unanticipated liabilities
or expenses or for any other purposes. There is no assurance the Company will not
decide to conduct further offerings of securities in the future. Depending on the structure
of any future offering, certain existing shareholders may not have the ability to purchase
additional equity securities. If the Company raises additional funds by issuing additional
equity securities, the holdings and voting interests of existing shareholders could be
diluted.
18
3.
RESPONSIBILITY FOR THE PROSPECTUS
This Prospectus has been prepared in connection with the Rights Offering described
herein.
The Board of Directors of Siem Offshore Inc. accepts responsibility for the information
contained in this Prospectus. The members of the Board of Directors confirm that, after
having taken all reasonable care to ensure that such is the case, the information
contained in this Prospectus is, to the best of their knowledge, in accordance with the
facts and contains no omissions likely to affect its import.
, _____ 2015
Eystein Eriksrud
Chairman
Michael Delouche
Board member
Kristian Siem
Board member
David Mullen
Board member
19
John C. Wallace
Board member
4.
GENERAL INFORMATION
4.1
Presentation of financial and other information
4.1.1 Financial information
See section 8.2, "Selected financial information–Summary of accounting policies and
principles" for further details regarding the basis for the Group's financial information.
4.1.2 Industry and market data
This Prospectus contains statistics, data, statements and other information relating to
markets, market sizes, market shares, market positions and other industry data
pertaining to the Group's business and the industries and markets in which it operates.
Unless otherwise indicated, such information reflects the Group's estimates based on
analysis of multiple sources, including data compiled by professional organisations,
consultants and analysts and information otherwise obtained from other third party
sources, such as annual and interim financial statements and other presentations
published by listed companies operating within the same industry as the Group, as well
as the Group's internal data and its own experience, or on a combination of the
foregoing. Unless otherwise indicated in the Prospectus, the basis for any statements
regarding the Group's competitive position is based on the Company's own assessment
and knowledge of the market in which it operates.
Although the industry and market data is inherently imprecise, the Company confirms
that where information has been sourced from a third party, such information has been
accurately reproduced and that as far as the Company is aware and is able to ascertain
from information published by that third party, no facts have been omitted that would
render the reproduced information inaccurate or misleading. Where information sourced
from third parties has been presented, the source of such information has been
identified. The Company does not intend, and does not assume any obligations to,
update industry or market data set forth in this Prospectus.
Industry publications or reports generally state that the information they contain has
been obtained from sources believed to be reliable, but the accuracy and completeness
of such information is not guaranteed. The Company has not independently verified and
cannot give any assurances as to the accuracy of market data contained in this
Prospectus that was extracted from these industry publications or reports and
reproduced herein. Market data and statistics are inherently predictive and subject to
uncertainty and not necessarily reflective of actual market conditions. Such statistics are
based on market research, which itself is based on sampling and subjective judgments
by both the researchers and the respondents, including judgments about what types of
products and transactions should be included in the relevant market.
As a result, prospective investors should be aware that statistics, data, statements and
other information relating to markets, market sizes, market shares, market positions and
other industry data in this Prospectus and projections, assumptions and estimates based
on such information may not be reliable indicators of the Company's future performance
and the future performance of the industry in which it operates. Such indicators are
necessarily subject to a high degree of uncertainty and risk due to the limitations
described above and to a variety of other factors, including those described in Section 2,
"Risk factors" and elsewhere in this Prospectus.
4.1.3 Rounding
Certain figures included in this Prospectus have been subject to rounding adjustments
(by rounding to the nearest whole number or decimal or fraction, as the case may be).
Accordingly, figures shown for the same category presented in different tables may vary
slightly. As a result of rounding adjustments, the figures presented may not add up to
the total amount presented.
20
4.2
Forward-Looking Statements
This Prospectus includes forward-looking statements, including, without limitation,
projections and expectations regarding the Group's future financial position, business
strategy, plans and objectives. All forward-looking statements included in the Prospectus
are based on information available to the Company, and views and assessments of the
Company, as at the date of this Prospectus. Except as required by the applicable stock
exchange rules or applicable law, the Company does not intend, and expressly disclaims
any obligation or undertaking, to publicly update, correct or revise any of the information
included in this Prospectus, including forward-looking information and statements,
whether to reflect changes in the Company's expectations with regard thereto or as a
result of new information, future events, changes in conditions or circumstances or
otherwise on which any statement in this Prospectus is based.
When used in this document, the words "anticipate", "assume", "believe", "can", "could",
"estimate", "expect", "intend", "may", "might", "plan", "should", "will", "would" or, in
each case, their negative, and similar expressions, as they relate to the Company, its
subsidiaries or its management, are intended to identify forward-looking statements. The
Company can give no assurance as to the correctness of such forward-looking
statements and investors are cautioned that any forward-looking statements are not
guarantees of future performance. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors, which may cause the actual results,
performance or achievements of the Company and its subsidiaries, or, as the case may
be, the industry, to materially differ from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such forwardlooking statements are based on numerous assumptions regarding the Group's present
and future business strategies and the environment in which the Company and its
subsidiaries operate.
Factors that could cause the Company's actual results, performance or achievements to
materially differ from those in the forward-looking statements include but are not limited
to, the competitive nature of the markets, in which the Company operates, technological
developments, government regulations, changes in economic conditions or political
events. These forward-looking statements reflect only the Company's views and
assessment as at the date of this Prospectus. Factors that could cause the Company's
actual results, performance or achievements to materially differ from those in the
forward-looking statements include, but are not limited to, those described in Section 2,
"Risk factors" and elsewhere in the Prospectus.
Given the aforementioned uncertainties, prospective investors are cautioned not to place
undue reliance on any of these forward-looking statements.
Forward looking statements are found in sections 2, "Risk Factors", 4, "General
information, 5, "Presentation of Siem Offshore Inc.", 6, "Industry Overview", 7
"Capitalisation and indebtedness", 8, "Selected financial information, 9, "Board of
directors, management , employees and corporate governance", 10, "Corporate
information", 11 "Securities trading in Norway", 12, "Taxation", 13, "The Rights
Offering", 14, "Selling and transfer restrictions and 15, "Additional information"..
21
5.
PRESENTATION OF SIEM OFFSHORE INC.
5.1
Overview
The Group’s primary business activity is to own and operate offshore support vessels
("OSVs") for the offshore energy service industry. The OSV fleet comprises of platform
supply vessels ("PSVs"), anchor-handling, tug, supply vessels ("AHTS vessels"),
offshore subsea construction vessels ("OSCVs") and a variety of other support vessels.
The Company’s fleet comprises of 55 offshore support vessels, of which 9 vessels are
under construction.
In addition to its primary activity, the Company has also established a business division
for industrial investments. The Group's industrial investment division includes the
Group's services as a contractor within the European offshore wind farm and offshore
cable lay market, the development of applications for managed pressure drilling, a
scientific core drilling vessel, specialized engineering to develop and implement combat
management systems for navy vessels and certain other investments.
The Company’s headquarter and corporate management team is located in Kristiansand,
Norway and additional subsidiary offices are located in Brazil, Germany, the Netherlands,
Ghana, USA, Poland and Australia. The Company is tax resident in Norway.
5.2
Group structure
The chart below shows a simplified structure of the Group:
Siem Offshore Inc. is a holding company with no employees and is therefore dependent
on service from its subsidiaries. These services consist of administrative, operational and
corporate services provided by Siem Offshore Management AS and Siem Offshore AS.
The Group's vessels are owned by several companies within the Group. Siem Offshore
Rederi AS currently owns all Norwegian, Polish and German built vessels, except the
OSCV “Siem Spearfish” which is owned by Siem Offshore Construction Vessels AS.
22 Further, Siem Offshore Rederi AS owns 51% of Siem Offshore Ghana International AS,
which owns the PSV “Siem Sasha”, and 51% of Siem Meling Offshore DA which owns two
PSVs.
Siem Offshore Do Brazil S.A. owns the locally built Brazilian fleet. Siem Offshore Canada
Inc. owns 50% of Secunda Canada LP ("Secunda"), which owns 6 Canadian flagged
vessels and has 1 vessel under construction. Siem Offshore Contractors GmbH, which
will utilize the cable lay vessel (“CLV”) “Siem Aimery” and has the installation support
vessel (“ISV”) “Siem Moxie” on a time charter, is owned 100% by Siem Offshore Invest
AS. Siem AHTS Pool AS manages a pool of 10 AHTS sister vessels (including 2 from a
pool partner) in accordance with a partner agreement.
The Group's industrial investments business division consists of the subsidiaries Siem
Offshore Contractors GmbH and Siem WIS AS, Overseas Drilling Limited which owns the
scientific core drilling vessel “JOIDES Resolution” and certain other investments, which
are owned 100% by Siem Offshore Invest AS. In addition the combat management
business in Siem Offshore do Brasil SA is included in this business division.
Below is a list of directly owned subsidiaries of the Company:
Company
Registered office
Siem Offshore AS
Siem Offshore Invest AS
Siem Offshore Rederi AS
Siem Offshore Construction Vessels AS
Siem Offshore do Brasil SA
Siem Offshore US Inc.
Siem AHTS Pool AS
DSND Subsea Ltd
Siem Offshore Services AS
Siem Offshore Management AS
Siem Offshore Management (US) Inc.
Siem Offshore US Holding AS
Siem Offshore Crewing (CI) Inc.
Kristiansand, Norway
Rio de Janeiro, Brazil
Delaware, USA
London, UK
Texas, USA
Cayman Islands
In addition, the subsidiaries own the following companies;
Company
Consub Delaware LLC
Aracaju Serviços Auxiliares Ltda
Siem Offshore Crewing AS
Siem Meling Offshore DA
Næringsbygg Indrettsveien 13 DA
Siem WIS AS
Siem Offshore Maritime Personnel AS
Siem Offshore Contractors GmbH
SOC Equipment and Personnel Services BV
AHMTEC GmbH
Overseas Drilling Ltd
Siem Offshore Canada Inc.
Siem Offshore Poland Sp.z.O.O
Siem Offshore Australia Pty Ltd
23
Registered office
Delaware, USA
Stavanger, Norway
Fjell, Norway
Bergen, Norway
Leer, Germany
Groningen, The Netherlands
Leer, Germany
Halifax, Canada
Gdynia, Poland
Perth, Australia
Ownership
and voting
share
100
100
100
100
100
100
100
100
100
100
100
100
100
%
%
%
%
%
%
%
%
%
%
%
%
%
Share and
voting
rights
100 %
100 %
100 %
51 %
95 %
60 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
Company
Siem Offshore Real Estate GmbH
Siem Offshore Contractors UK Ltd
Siem Offshore Ghana International AS
Registered office
Leer, Germany
London, UK
Share and
voting
rights
100 %
100 %
51%
The Company also holds ownership interests in certain non-material subsidiaries and
joint ventures.
5.3
History
The Company traces its roots back to Det Søndenfjeldske-Norske Dampskipselskap AS
("DSND"), which was established in 1854. The main activity in DSND until 1964 was
shipping operations, with a focus on passenger transportation. In 1964, DSND’s
passenger lines service between Hamburg and Oslo was closed down, and DSND’s
activity level was then limited until 1985.
DSND operated as an investment company between 1985 and 1995, with investments
mostly in offshore related activities. By early 1990, DSND had taken ownership of
several dynamically positioned ("DP") offshore vessels. As a consequence, the board
wanted to cultivate DSND’s investment profile and strategy, and other non-offshore
related investments were gradually sold or spun-off from the company.
By 1995, the DSND owned six special offshore vessels, of which two were used for
offshore construction, two for well maintenance and two for geo-technical drilling. The
company planned for further expansion into these three business areas through the
addition of technology and human capital. DSND conducted eight acquisitions of assets
or businesses between 1995 and 2002, which gave the company a significant position
within the area of offshore maintenance and construction, both in terms of geography
and resources. The acquisition provided DSND the skills and equipment to complete total
construction contracts for deep water subsea installations, as well as the install of
pipelines, floating production, units and riser systems, and link-up and completion of
subsea production installations.
On 18 October 2001, DSND announced that they were in discussions with Halliburton on
combining their respective activities within subsea construction and related services. On
23 May 2002, the two companies announced that they had completed a final agreement
for the creation of the 50/50 joint venture company Subsea 7 Holding Inc. (formerly
named Subsea 7 Inc.), registered in the Cayman Islands. The agreement involved all
substantial subsea-related assets, personnel and existing contracts from both companies
to be included in the joint venture.
After the merger in May 2002, both Halliburton and DSND actively contributed to the
further industrial development of the Subsea 7 Holding Inc. business. During this period
Subsea 7 also consolidated its non-subsea activities through the divestment of lossmaking activities and by a more concentrated focus. The holding company was further
relocated from Norway to the Cayman Islands in the fourth quarter of 2002 through a
share swap.
In 2002, DSND was renamed Siem Offshore Inc. which again subsequently changed its
name to Subsea 7 Inc. in 2005.
In 2004, the Company was incorporated under the name of Siem Supply Inc. as a
subsidiary of the company then named Siem Offshore Inc. (now Subsea 7 Inc.).
In July 2005, Subsea 7 decided that it would be beneficial for the further development of
both its subsea business and its non-subsea business, as well as enhance shareholder
value, to separate the subsea and the non-subsea business and give them the
24
opportunity to develop in distinct companies and under separate management. As a
consequence, the Company acquired the non-subsea assets of Subsea 7 not already held
by the Company and the Company was spun-off from Subsea 7.
The Company listed the Shares on the Oslo Stock Exchange in August 2005.
Early in 2006, the Company completed a merger with Rovde Shipping AS which owned
or operated six vessels, whereof three standby vessels which have subsequently been
sold. Also, during 2006, the Company acquired a majority shareholding in Siem WIS AS.
Further, the Company acquired the newbuilding contract for the vessel Siem Mariner
from OH Meling & Co AS, and entered into the joint venture Siem Meling Offshore DA
which controlled an additional two vessels. The Company also contracted four MRSVs
from Kleven Verft AS.
In 2010, Petrobras chartered four AHTS vessels from the Company for a firm period of
four years. The contract value for the firm period was approximately USD 285 million
(NOK 1.9 billion), net of local taxes. The contracts for the four AHTS vessels were added
to the Brazilian activities of ten vessels in operation and eight vessels under construction
at that time. The contracts marked growth of operations in Brazil and an important step
in becoming a first class operator in Brazil.
In 2011, the company acquired the remaining 50% ownership interest in the shares of
ODL from a subsidiary of Transocean Ltd.
In the same year, the Company announced the entry into the business for submarine
cable installation, repair and maintenance projects. The Company and the shareholders
of Five Oceans Services ("FOS"), later to be renamed Siem Offshore Contractors GmbH,
reached an agreement whereby the Company acquired all shares in FOS. The transaction
combined the marine operating capacities of the Company with the engineering
capabilities and project execution expertise of FOS and formed a strong entity to meet
the forecasted market growth and customer requirements.
In 2012, Siem Offshore Contractors, the wholly owned subsidiary of the Company,
announced that it had been awarded the first contract for the renewable energy market
for the installation of the inner array grid cables as well as associated services for the
Amrumbank West offshore wind farm ("OWF") project. The contract award marked the
entry into the Offshore Renewable Energy Market for the Group. Subsequently, Siem
Offshore Contractors has been successful in winning additional contracts for OWF
projects.
In 2013, the Company acquired 50% of Secunda. Secunda had more than two decades
of offshore experience in serving the oil and gas industry and at the time of the
acquisition Secunda owned and operated a fleet of six offshore support vessels on
Canada’s east coast. The ownership in Secunda provided the Company with a strategic
position in Canada’s east coast offshore sector with the aim to grow the business of
Secunda and also to develop the Company’s current business through the position
represented by Secunda.
In 2014, the Company entered into agreements with a client to provide two wellintervention vessels ("WIVs" or "Well-Intervention Vessels"). The vessels are under
construction in Germany and have an overall length of 158 meters, a beam of 31
meters, and built in compliance with the MODU-class (Marine Offshore Drilling Units).
The agreements represented a targeted entry for the Company as vessel provider into
the segment for Well-Intervention Vessels.
In 2015, the Company decided to streamline its business by forming one dedicated
organisation for its core offshore vessel business named "Siem Offshore OSV". The
remaining business consisting of Siem Offshore Contractors, “JOIDES Resolution”, Siem
WIS, the combat management business in Brazil and certain other investments will be
25
organisationally separated and operated under the name of "Siem Offshore Industrial
Investments".
In the period 2006 to 2015, the fleet of vessels in operation has grown from 21 to 46
vessels. The fleet growth has mainly been achieved through the construction of vessels.
The vessel fleet is set to increase further with the delivery of the 9 vessels currently
under construction.
5.4
Business objectives and strategy
The objective of the Company is to maintain and develop the Offshore Support Vessel
(OSV) activities, continue to strengthen the Contracting Business providing services for
the Offshore Windfarm Renewable Industry and other cable laying activities, and to find
strategic solutions for its other investments.
The Company intends to pursue a strategy of continued consolidation and growth, with
the aim of becoming one of the leading owners and operators of high specification OSV’s
on a global basis, and the leading contractor for the Offshore Windfarm Renewable
Industry.
5.4.1
Advanced fleet
The fleet consists of 55 advanced high-end offshore support vessel, of which 9 of these
are under construction. The fleet includes large Anchor Handling Tug Supply vessels,
Platform Supply Vessels, Multipurpose field & ROV Support Vessel and Offshore Subsea
Construction Vessels designed to meet the most challenging environments. The latest
addition to the fleet is two Well-Intervention Vessels currently under construction.
The Company aims at meeting the market’s demand for modern and advanced support
vessels for the global offshore oil and gas industry. This is supported by the newbuilding
activity undertaken by the Group, which will strengthen the Group’s offshore fleet with
additional modern and, environmentally friendly and technically advanced offshore
support vessels.
5.4.2
Industrial Investments
The primary activities for Siem Offshore Contractors GmbH ("SOC") include the
installation, post-lay trenching, termination and testing of submarine composite cables
forming the inner array grid of an OWF. SOC has been technically successful in executing
its planned work scope by utilising its chartered fleet of large and high quality DP-2
installation vessels, in combination with its experienced offshore and onshore
organisation. SOC will also focus on other cable laying opportunities.
Siem WIS AS has designed and developed a pressure control device ("PCD") which can
improve managed pressure drilling ("MPD") operations. These services are increasing
due to global challenges with depleted reservoirs, drilling of additional and infield wells,
and the demand to achieve a more constant well pressure during drilling and tripping
operations. Global energy demand growth, combined with an increasing number of deep
sea and high pressure high temperature ("HPHT") reservoirs, and increasing emphasis
on safety management will lead to increased demand for MPD services.
The “JOIDES Resolution” is a scientific core sampling research vessel. Its mission is to
explore the Earth below the oceans of the world in order to investigate the origin and the
evolution of the Earth. The ship is a dynamically positioned non-riser drilling/coring
vessel capable of operating in water depths of 7,000 meters, and with holes cored to
depths of 2,000 meters below the seafloor.
26
5.4.3
Professional and cost effective operations
The Group will maintain a strong focus on operating its fleet professionally and costeffectively and in accordance with relevant laws and regulations.
The Company has, and will continue to have, a small team of dedicated staff focusing on
core activities such as marketing, chartering, technical supervision, finance, business
development and investor relations, and may outsource services within the areas of
technical management, construction supervision and certain administrative functions to
well-qualified suppliers of such services.
5.5
Business activities
5.5.1
Introduction
The Company's business is split into two divisions:
•
•
5.5.2
Siem Offshore OSV, which comprises the Group's core offshore vessel business
Siem Offshore Industrial Investments, which comprises the Group's other
businesses
Siem Offshore OSV
Siem Offshore OSV’s primary activity is to own and operate OSVs for the offshore energy
service industry. The OSV fleet comprises PSVs, AHTS vessels, OSCVs, and a variety of
other support vessels including but not limited to an ISV, Brazilian built vessels including
oil spill recovery vessels ("OSRVs"), fast supply vessels ("FSVs") and fast crew vessels
("FCVs").
Fleet
The Group’s fleet comprises 46 vessels in operation. In addition, the Group has entered
into firm contracts for the construction of another 9 vessels, including one vessel under
construction by Secunda. The vessels under construction are to be delivered in the
period 2015 to 2016.
The average age of main vessel types in operation are five years for AHTS vessels, two
years for OSCVs and eight years for PSVs.
The below table summarizes the main characteristics of the Group’s current fleet:
27
28
Delivery of vessels under construction
The following list summarizes the scheduled time of delivery of the Group’s vessels
under construction as of end first quarter 2015:
2015
1Q
2Q
2016
3Q
4Q
1Q
2Q
2017
3Q
OSRV, Siem Marataizes
CLV, Siem Aimery
PSV DF, Siem Pride
PSV DF, ”TBN 1”
PSV DF, ”TBN 2”
PSV DF, ”TBN 3”
WIV, Siem Helix 1
WIV, Siem Helix 2
AHTS, Avalon Sea (Note 1)
Note 1) Vessel under construction in the 50% owned entity Secunda.
29
4Q
1Q
2Q
3Q
4Q
Contract coverage for vessels under construction
The following list summarizes the contract coverage of the Group’s vessels under
construction as of end first quarter 2015:
2015
Vessel
Type
Ownership
Brazil, Siem Marataizes
OSRV
100%
Poland, Siem Aimery
CLV
100%
Poland, Siem Pride
PSV
100%
Poland, ”TBN 1”
PSV
100%
Poland, ”TBN 2”
PSV
100%
Poland, ”TBN 3”
PSV
100%
Germany, Siem Helix 1
WIV
100%
Germany, Siem Helix 2
WIV
100%
Poland, Avalon Sea (Note 1)
AHTS
50%
Under Construction
Contract
2Q
3Q
2016
4Q
1Q
2Q
3Q
Contract option
2017
4Q
1Q
2Q
3Q
2018
4Q
1Q
2Q
3Q
4Q
Contract with subsidiary
Of the 9 vessels under construction, the OSRV will enter into an eight year firm contract
upon delivery from yard, the CLV will enter an internal time charter with a subsidiary of
the Company and the PSV “Siem Pride” will commence on a five year firm time charter
with AS Norske Shell.
The two Well-Intervention Vessels under construction in Germany, with delivery in 1Q
and 3Q 2016, have both been chartered out on seven year firm charter contracts plus
options.
The AHTS, “Avalon Sea” under construction by Secunda has secured a five year firm
contract plus options.
The three dual fuelled PSVs currently under construction in Poland, with delivery in 2016,
have yet to secure firm contracts.
The Company has obtained certain guarantees of financial compensation including refund
guarantees for pre-delivery instalments related to vessels under construction in Poland
and parts of the pre-delivery instalments related to vessels under construction in
Germany in case of delays and non-delivery. Further, the Company has the right to
cancel contracts if delivery of vessels is significantly delayed. However, no assurance can
be given that all risks have been fully covered. There are no guarantees of financial
compensation or refund guarantees with respect to the OSRV under construction in
Brazil.
Contract coverage and operations of current fleet
The Group’s vessels are currently operating in the North Sea, off the Brazilian coast, the
Mediterranean, West Africa and the Gulf of Mexico/the US Golf.
30
Below is an overview of the firm contracts and options for the Group’s fleet of PSVs,
OSCVs, AHTSs and ISV in operation as of end first quarter 2015:
2015
Vessel
Type
Ownership
Siem Sasha 6)
PSV
51 %
Sophie Siem
PSV
100 %
Siem Louisa
PSV
100 %
Siem Hanne
PSV
100 %
Siem Carrier
PSV
100 %
Siem Supplier
PSV
100 %
Hugin Explorer
PSV
100 %
Siem Atlas
PSV
100%
Siem Giant
PSV
100%
Siem Symphony
PSV
100%
Siem Pilot
PSV
51%
Siddis Mariner 1)
PSV
51%
Siem Marlin
OSCV
100%
Siem N-Sea
OSCV
100%
Siem Daya 1 2)
OSCV
100%
Siem Daya 2
OSCV
100%
Siem Spearfish
OSCV
100%
Siem Stingray
OSCV
100%
Siem Pearl
AHTS
100%
Siem Emerald 4)
AHTS
100%
Siem Sapphire
AHTS
100%
Siem Aquamarine 3)
AHTS
100%
Siem Ruby
AHTS
100%
Siem Topaz
AHTS
100%
Siem Diamond 3)
AHTS
100%
Siem Amethyst
AHTS
100%
Siem Garnet 4)
AHTS
0%
Siem Opal
AHTS
0%
ISV
100%
Siem Moxie 5)
Total order backlog in % and USD mill.
Contract
1)
2)
3)
4)
5)
6)
2Q
3Q
2016
4Q
1Q
2Q
3Q
2017
4Q
1Q
2Q
3Q
23%
95
2018
4Q
1Q
2Q
3Q
11%
52
4Q
Agreed sold
51%
141
Contract option
36%
137
Spot work
Employment for “Siddis Mariner” includes firm time charter for Siem Offshore Contractors.
The backlog for “Siem Daya 1” includes an assumption of completion of sale in August 2015.
“Siem Aquamarine” and “Siem Diamond” are currently in lay-up
Employment for “Siem Garnet” and “Siem Emerald” includes firm time charter for Siem Offshore
Contractors
The ISV “Siem Moxie” shall primarily be utilized by the subsidiary Siem Offshore Contractors for cable
installation projects within the offshore wind-farm segment.
“Siem Sasha” was sold to a company owned 51% by Siem Offshore in June 2015.
In April 2015 the Company announced that it had agreed to sell the OSCV “Siem Daya 1”
to Daya Materials Berhad (“Daya”). The purchase price for the vessel has been agreed at
USD 120 million. In addition, the Company is entitled to a 60/40 profit share in the
Company’s favour based on the profit Daya makes on the vessel limited to an additional
USD 10 million. USD 30 million of the purchase price for the vessel will be financed by a
sellers credit from Siem Offshore in the form of a convertible bond to Daya with 4 years
duration and a coupon of 5%, and a conversion price of 15 Malaysian sen per share. The
sale is subject to certain conditions and the cancelling date for the completion of the sale
is 31 August 2015. If the vessel is not sold and delivered to Daya, the vessel will
continue on the remaining 3 year term period of the initial 5 year term contract with
Daya, which commenced upon delivery of the vessel from yard in August 2013.
Secunda Canada LP
The 50%-owned company, Secunda, has ownership in a fleet of six offshore support
vessels which operate offshore Canada. Secunda is engaged in support services for
platform supply, anchor handling, rescue standby and towage in its primary area of
operation outside the coast of Eastern Canada.
Secunda has one vessel under construction with scheduled delivery in 2015.
31
Big Orange XVIII
The Company has a 41%-ownership in the "Big Orange XVIII", which is a DP-2 well
stimulation vessel.
Siem Offshore Do Brazil S.A. (trademark: Siem Consub SA )
The Company’s subsidiary Siem Consub SA in Brazil is an owner and operator of offshore
support vessels and crew boats in the Brazilian market. Siem Consub’s head office is
located in Rio de Janeiro in addition to bases located along the Brazilian coast. With
more than 26 years of experience in Brazil, Siem Consub is focused on offshore support
operations, submarine cable maintenance and installation, engineering and systems
integration for the defence market. Siem Consub further undertakes projects that
comprise underwater and naval technology, high quality resources and qualified
professionals. Unique solutions have been implemented but each new project brings new
challenges to overcome.
View the company web at www.consub.com.br
Below is an overview of the firm contracts and options for Big Orange XVIII, five
Canadian flagged vessels currently in operation and the smaller Brazilian flagged vessels
as of end first quarter 2015:
2015
Vessel
Type
Ownership
Big Orange XVIII
WSV
41 %
Burin Sea
AHTS
50%
PSV
50%
Trinity Sea
AHTS
50%
Venture Sea
AHTS
50%
Scotian Sea
MPSV
50%
Panuke Sea
Marati
OSRV
Siem Maragogi
3Q
90%
90%
4Q
1Q
2Q
3Q
24
35%
20
89%
2017
4Q
1Q
2Q
3Q
13
18%
26
89%
2018
4Q
1Q
2Q
3Q
7
0%
0
26
73%
24
4Q
100 %
OSRV
100%
Parnaiba
FSV
100 %
Propriá
FSV
100 %
Capela
FSV
100 %
Siem Piatã
FCV
100 %
Siem Pendotiba
FCV
100%
Siem Caetes
FSP
100%
Siem Carajas
FSP
100%
Contract
2Q
2016
Contract option
Spot work
*The MPSV “Ryan Leet” which is owned by Secunda has not been included in the overview above, as the vessel
is currently not in operation.
*The OSRV “Marati”, which has been operating in Brazil, is currently not in operation. The vessel is not
marketed for new employment and will be phased out of the fleet. The vessel is 100% equity financed and has
been fully depreciated in the fixed assets.
32
Existing contract coverage and contract backlog for Siem Offshore OSV
The existing contract coverage for each of the vessel categories as of end first quarter
2015 is as follows:
Existing contract coverage, %
PSVs
OSCVs *
AHTS vessels
Brazilian-flagged vessels
Secunda
Big Orange XVIII
2015
64%
89%
13%
90%
90%
100%
2016
43%
80%
5%
89%
35%
8%
2017
23%
72%
89%
18%
-
* Existing contract coverage reflects the sale of "Siem Daya 1" in August 2015.
The total contract backlog of firm contracts for the Offshore Support Vessels segment at
31 March 2015 was USD1.41 billion, including Big Orange XVIII, Secunda and the
vessels under construction, and is allocated as follows:
(Amounts in USD millions)
Backlog
5.5.3
2015
194
2016
258
2017
onwards
955
Siem Offshore Industrial Investments
Siem Offshore Industrial Investments consists of Siem Offshore Contractors, “JOIDES
Resolution”, Siem WIS, the combat management business in Brazil and certain other
investments.
Siem Offshore Contractors (SOC)
SOC is an experienced submarine cable and umbilical installation, repair and
maintenance contractor serving the worldwide offshore oil and gas as well as renewable
energy industries. SOC, a German company with its head office situated in the City of
Leer, was formed in 2003. SOC has gained great experience in providing its service to
the demanding worldwide offshore oil and gas industry, meeting the highest industry
standards for quality, health, safety and environmental protection. This has been of
value when winning contracts in the renewable energy sector. Based on its in-house
resources as well as experience, SOC can install, maintain and repair submarine cables
as well as subsea umbilical in many water depths and geographical areas.
View the company web at www.siemoffshorecontractors.com
33
Below is an overview of the main projects of SOC as if end first quarter 2015:
Amrumbank West
OWF
Awarded
Project
Project phase
Vessel utilisation
Profit recognition
Baltic 2 OWF
Nordsee One OWF
Nordsee One
Veja Mate OWF
Mar, 2012
Feb, 2013
Dec, 2012
Apr, 2014 *)
Apr, 2015
Installation of 86
submarine cables
providing the innerarray grid connecting
Installation of 86
submarine cables
providing the innerarray grid connecting
Consortium EPIC
contract for the 155kV
export cable system
Nordsee One
Turnkey EPIC package
of the inner array grid
cable system for 54
wind turbine generators
Turnkey EPIC package
of the inner array grid
cable system for the 67
wind turbine generators
All cables have been
installed with cable
termination, testing and
post-lay trenching
works ongoing.
All cables have been
installed with cable termination, testing and
post-lay trenching works
completed in May 2015.
Planning, preparation
and engineering. The
project remains on track
for mechanical
completion by 3Q 2016.
Planning, preparation and
engineering expected
complete in 2Q 2015.
Offshore installation from
2Q 2016.
Planning, preparation
and engineering.
PSV “Siddis Mariner”
PSV “Siddis Mariner”
ISV “Siem Moxie”
ISV “Siem Moxie”
Utilising the resources
within the Siem
Offshore Group
within the Siem
Offshore Group
within the Siem
Offshore Group
AHTS “Siem Garnet”
AHTS “Siem Garnet”
3rd Party Vessel
3rd Party Vessel
The project is
scheduled to be
completed within 2Q
2015 with a positive
margin.
The project is
scheduled to be
completed during 3Q
2015 with a positive
margin.
At minimum 25%
completion. No margin
will be recorded prior to
installation activities.
Project scheduled for
completion during 4Q
2016.
At minimum 25%
installation activities in
2016. Project scheduled
for completion during 1Q
2017.
At minimum 25%
installation activities in
2016. Project scheduled
for completion during
2017.
*The Nordsee One OWF project reached financial close in April 2015 but was awarded to SOC in April 2014.
Overseas Drilling Ltd. (“JOIDES Resolution”)
The vessel “JOIDES Resolution” is owned 100% by Overseas Drilling Limited, of which
the Company owns 100%. The vessel is a highly specialized research drill ship, whose
primary mission is to recover core samples for scientific purposes. The vessel is currently
on contract with Texas A&M Research Foundation ("TAMRF") for the use as a scientific
core drilling vessel for the International Ocean Discovery Program. The operational firm
phase of the contract ended in fourth quarter 2013, and TAMRF has since then exercised
three of the initial 10 yearly options. In June 2015, TAMRF declared the third one year
option for the vessel, and the current option period under the existing contract will
expire at the end of September 2016. A series of seven 1-year option periods is still to
be exercised by the TAMRF.
Below is an overview of the firm contracts and options for “JOIDES Resolution” as of end
first quarter 2015*:
2015
Vessel
Joides Resolution
Type
SPV
Ownership
3Q
66%
13
4Q
1Q
2Q
3Q
0%
0
4Q
1Q
2Q
3Q
0%
0
2018
4Q
1Q
2Q
3Q
0%
0
4Q
100 %
Contract
2Q
2017
2016
Contract option
Spot work
* The option period declared by TAMRF has been graphically included in the above overview, but not reflected in the total order
backlog in terms of USD million and per cent.
Siem WIS AS
Siem WIS AS is 60% owned by Siem Offshore, and is a Norwegian Oil Service Company
which has developed and commercialized new unique drilling technology for
Underbalanced Operations ("UBO") and MPD. Subject to a successful development, the
products will enable safer and more efficient drilling and well maintenance services,
including riser-less subsea intervention services from vessels.
34
With the technology, challenging reservoirs such as HPHT (High Pressure High
Temperature) and ERD (Extended Reach Drilling) wells, will be drilled with better control
of your first barrier. These companies services are increasing due to global challenges
with depleted reservoirs, drilling of additional and infield wells, and the demand to
achieve a more constant well pressure during drilling and tripping operations.
View the company web at www.siemwis.com
Contract Backlog for Siem Offshore Industrial Investments
The total contract backlog for the Industrial Investments segment at 31 March 2015 was
USD 166 million and is allocated as follows:
(Amounts in USD millions)
Siem Offshore Contractors
JOIDES Resolution
2015
69
13
2016
76
-
2017
onwards
8
-
The backlog of Siem Offshore Contractors is normally based on lump sum contracts,
while the backlog of “JOIDES Resolution” is based on a firm contract period with an
agreed charter rate per day.
5.6
Material agreements
The Company believes that all of its contracts, including its financing arrangements and
newbuilding contracts are material for its business. However, the Company does not
consider itself dependent upon any one contract in particular.
5.7
Recent trends developments
The North Sea PSV and AHTS vessel markets are continuing to experience soft rates and
utilization. Additional vessels have entered the North Sea from other regions and as rig
activity is reduced, this places pressure on vessel utilization and fixture rates. Vessel
owners have placed vessels in lay-up and owners are considering additional lay-ups.
The market for OSVs in Brazil has significantly softened following lower demand activity
from Petroleo Brasileiro SA (“Petrobras”). When disclosing its five year business plan,
Petrobras announced reduced capital expenditures and highlighted cost cutting measures
with the intension to reduce leverage going forward. In order for Petrobras to reduce its
cost base, there is an increased risk that Petrobras will initiate renegotiation of existing
contracts with suppliers, including vessel owners. It is in the opinion of the Company
that an increased risk of such contract renegotiations or even contract cancellations for
certain vessels of the Company exists.
The outlook for the OSV market is expected to remain soft for several years due to
reduced investments in the offshore oil and gas industry following lower current and
future commodity prices for oil and gas, which again reduces the demand for vessels and
puts pressure on utilisation and fixture rates, coupled with increased supply of vessels as
more vessels under construction are delivered from yards.
In response to the soft OSV market, the Company has decided to take two vessels,
“Siem Aquamarine” and “Siem Diamond”, out of operations and into lay-up.
Siem Offshore Contractors experience steady tendering activity in the OFW market with
scheduled marine installation activities taking place in 2017 and 2018 and for operations
and maintenance contracts to be awarded in 2015.
There has been no significant change in the financial or trading position of the Company
since the end of the last financial period for which interim financial information has been
published. The Company has in connection with preparing the reporting of its second
35
quarter 2015 results considered the fair value of its assets versus the respective book
values. It is clear that such considerations will result in impairments on vessel values in
the second quarter 2015 results.
There has been no material adverse change in the prospects of the issuer since the date
of its last published audited financial statements.
5.8
Investments
The Company has 9 vessels under construction, of which six vessels are under
construction in Poland with Remontowa Shipbuilding, two in Germany with Flensburger
Schiffbau-Gesellschaft and one in Brazil with ETP Shipyard with completion at Wilson &
Sons. These 9 vessels include one OSRV scheduled for delivery in 2015, four dual-fuel
PSVs with one for delivery in 2015 and three in 2016, one Cable-Lay Vessel ("CLV") for
delivery in 2016, one AHTS vessel for delivery in 2015 and two Well-Intervention vessels
for delivery in 2016.
All of the vessels under construction will be financed with a combination of mortgage
debt and equity. Yard instalments for shipbuilding contracts are normally paid with 20%
during construction and 80% at delivery, alternatively 10% during construction and 90%
at delivery.
The below table provides an overview of the Company’s committed future yard
instalments per end of first quarter 2015 and associated secured mortgage debt
financing;
Amounts in USD million
Committed Future Yard Instalments
OSRVs – Brazil
PSVs - Poland
CLV – Poland
WIV - Germany
Total Committed Future Yard Instalments
Mortgage Debt Facilities
OSRVs – Brazil
PSVs - Poland
CLV – Poland
2015
2016
8.1
0.0
Total
8.1
54.5
103.3
157.8
0.0
55.5
55.5
61.2
220.0
281.2
123.8
378.8
502.6
2015
2016
Total
4.9
0.0
4.9
44.5
103.3
147.8
0.0
53.8
53.8
WIV - Germany
30.6
208.2
238.8
Total Mortgage Debt Facilities
80.0
365.2
445.2
Financed by Equity
43.8
13.6
57.4
The AHTS vessel under construction for Secunda, which is consolidated in the financial
statements of the Group according to the equity method, is not included in the table
above. Total committed future yard instalments for this vessel is approximately EUR 40
million, the equivalent of approx. USD 45 million. Mortgage debt financing is also
secured for this vessel.
For an overview of the scheduled time of delivery of the Company’s vessels under
construction, please refer to Section 5.5.2 "Presentation of Siem Offshore Inc.—Business
activities—Siem Offshore OSV".
The Group has made pre-delivery instalments of approximately EUR 31 million, the
equivalent of USD 33.7 million, related to vessels under construction since latest audited
published financial statements.
36
5.9
Principal markets
The principal markets for the Company is currently the North Sea, Brazil, the Gulf of
Mexico, the Mediterranean and West Africa.
The following is the management’s assessment of the Company’s position in different
areas:
5.9.1
The North Sea
Siem Offshore holds a strong position and market share in this region, with focus on
supply services by AHTS, PSV and OSCV. Furthermore, Siem Offshore recently delivered
its first dual fuelled PSV, for the use of either LNG or Marine Diesel Oil, to Total E&P
Norge AS and a "sister vessel" will be delivered to A/S Norske Shell in second half of
2015. Both vessels will have the most modern solutions for fire-fighting and emergency
preparedness and are chartered out on multiple year contracts.
5.9.2
Brazil
General
The Brazilian market is highly regulated and only locally established companies are
allowed to operate there. Currently there are approximately 490 vessels operating, of
which approximately 50% is Brazilian flagged, while the foreign vessels are all under
temporary import conditions.
There are offshore drilling and production activities all along the thousands of miles of
the Brazilian coast, but the main oil provinces are Campos Basin, offshore Macaé (by far
the largest), Sergipe Basin offshore Aracaju and Rio Grande do Norte, offshore Guamaré.
Siem Offshore Do Brazil has onshore facilities in Macaé and Aracaju. Promising new areas
are Santos Basin and Vitória Basin.
The main client is Petrobras, the state-controlled oil company, but there are other oil
companies expanding its offshore activities in Brazil, among them Shell, BP, TOTAL,
CHEVRON, STATOIL, Queiroz Galvão, etc. Most of the contracts are long term, being up
to eight years term for new building vessels to two/four years for foreign vessels. The
spot market is still limited, but is expected to develop in the coming years. There are
currently 150 Offshore Support Shipping companies duly authorized by ANTAQ
governmental agency, however, the main players are in the number of 50 companies
and several are subsidiary of major international players.
The Company has during 2015 scaled down its operations in Brazil following four AHTS
vessels ending firm contracts with Petrobras without further extension.
Engineering Services
Siem Offshore Do Brazil is also a main provider of specialized engineering services to the
Brazilian Navy. Among its successfully contracts are: the Combat Management Systems
supply for six frigates of Niteroi class, the Combat Management Systems supply for the
Barroso corvette, the Combat Management Systems supply for the aircraft carrier São
Paulo, and several other jobs related to system integration, simulators and navy
specialized training. Besides, there are actions on course to apply these engineering
capabilities on the oil and gas market, seeking future opportunities.
5.9.3
The Gulf of Mexico, the Mediterranean and West Africa
The Company has successfully entered into the market in West Africa, which is expected
to grow over the coming years, with demand for different types of vessels for general
support, maintenance and special services.
37
The Company has successfully operated in the market in the Gulf of Mexico for about
two years. It is expected that this market will grow over the coming years, with strong
demand for different types of vessels for general support, maintenance and special
services.
38
6.
INDUSTRY OVERVIEW
This section discusses the industry in which the Group operates, which is the offshore
support vessel industry. Certain parts of the information in this Section relating to
market environment, market developments, growth rates, market trends, industry
trends, competition and similar information are estimates based on data compiled by
professional organizations, consultants and analysts; in addition to market data from
other external and publicly available sources, and the Company's knowledge of the
markets, see Section 4.1.2 "General information—Industry and market data". The
following discussion contains Forward-looking Statements, see Section 4.3 "General
information—Forward-looking statements". Any forecast information and other Forwardlooking Statements in this Section are not guarantees of future outcomes and these
future outcomes could differ materially from current expectations. Numerous factors
could cause or contribute to such differences, see Section 2 "Risk factors" for further
details.
6.1
Introduction
Offshore support vessels perform a wide range of services related to construction and
decommissioning work, pipe laying, support of drilling rigs and floating and fixed
installations. Offshore support vessels can be divided into three main segments; AHTS,
PSVs, and various types of offshore subsea vessels (OSCVs), which are further described
in Section 6.3, "—The Offshore Support Vessel market". The Group owns vessels in all of
the above segments.
Demand for PSVs are mainly related to support of offshore platforms, rigs and floating
production units, with respect to transporting cargo between such installations/units and
supply bases onshore. PSVs have liquid tanks, dry bulk tanks and deck area for
transportation of various cargoes such as mud, brine, cement, water, oil, diesel, pipes
food, and other supplies related to production/operation of the offshore rigs/platforms.
AHTS vessels can perform the same duties, but are equipped with winches and towing
capacity, enabling them to lift and position anchors, tow rigs and floating production
units that either cannot propel themselves, or where towing is more economical due to
fuel costs. Towing of new fixed platforms or cargo barges are also relatively frequent
tasks for these vessels. A large portion of AHTSs’ duties is related to anchoring up
offshore rigs and floating production units. Even though many new rigs have DP systems
that enable them to hold their position using navigation systems and own thrusters, and
thus do not necessarily require the use of anchors, such DP systems require the constant
use of the rig’s engines, it is often more economical to be anchored up, especially if the
rig is expected to be in the same position for several weeks.
OSCVs comprise of pipelay vessels, dive support vessels, heavylift / derrick barges,
offshore construction vessels, seismic support vessels, Well-Intervention Vessels and
survey vessels. These types of vessels are normally utilized in the installation, light
construction, inspection, and maintenance and decommissioning of subsea equipment
related to the development of oil and gas offshore. The vessels may also be utilized
within certain non-oil and gas related segment, e.g. the offshore wind industry.
6.2
Demand and key drivers
The key demand drivers for offshore support vessels are the level of activity and
investments in the oil and gas sector. The oil companies’ exploration and production
activities, normally referred to as “E&P spending”, are based on the world’s demand for
oil and gas. Furthermore, demolition of old platforms and installations and remedial work
(e.g. in the US Gulf after hurricane damages) are new important areas of work for
offshore support vessels. Together with a massive growing maintenance requirement on
existing drilling units, installations and pipelines worldwide due to ageing and corrosion
and need for repair and upgrading, this also has great influence on the demand for
39
offshore support vessels.
The below chart shows the Brent oil price development since 2010 as well as the forward
curve.
Brent oil price (USD/bbl)
112
108
111
96
80
70
68
Source: Managers Research, Ecowin, Bloomberg (June 2015)
In the years 2011 to 2013, oil prices (Brent) have traded in the USD 90/bbl to USD
120/bbl range, with yearly averages being stable around USD 110/bbl. This was a
supportive level for an increasing spending environment. In mid 2014 the oil price
peaked at around USD 115/bbl and from there the oil price saw a dramatic fall down to
about USD 50/bbl around year end 2014. During 2015 oil prices have been volatile and
trading in the range of around USD 50-65/bbl. The forward curve shows points to a
gradual and modest increase in oil prices over the next years, with an average price of
USD 68 and 70/bbl for 2016 and 2017, respectively.
The level of E&P spending is a function of the prevailing oil prices. Naturally, the
dramatic fall in the oil price has forced oil companies to reduce their investments and
overall offshore activity. With years of stable oil prices above USD 100/bbl, the oil
companies budgeting prices have increased and hence, with the current oil price
environment, many projects that previously were profitable are now under review. On
the other hand, reduced activity and oil production should over time help the market
balance and gradually provide support for increasing oil prices again.
Below table shows the historic global E&P spending growth.
Global E&P spending growth
30%
25%
18%
20%
18%
18%
15%
9%
10%
21%
19%
18%
19%
15%
12%12%12%
9%10%
9%
8%
6%
3%
3%
3% 2%
2%
0%
-3%
-10%
-6%
-12%
-20%
-21%
-30%
-33%
-40%
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Source: Mangers Research, based on IHS, Schlumberger, Citigroup (June 2015)
40 2012
2014
As seen in the above chart one saw strong growth in E&P spending in the years prior to
the financial crisis with annual growth rates of 15-21% in the period 2005-2008.
Following the financial crisis E&P spending saw a 12% decline in 2009 before bouncing
back to double digit growth in the period 2010-2012. In 2014 E&P spending growth was
down to 2% while 2015 is expected to show a double digit decline.
Going forward, E&P spending growth is naturally dependent on the development in oil
prices. Currently there is a lot of uncertainty in the market with oil companies holding
back on their investments and hence providing limited support for a quick rebound to
historic growth.
Another key driver for the offshore support vessel market is the offshore drilling activity.
Floater rigs demand (# rigs)
Jack-up rigs demand (# rigs)
500
300
450
250
400
350
200
300
150
250
200
100
150
100
50
50
0
Jan-95
Jan-98
Jan-01
Jan-04
Other
Jan-07
Jan-10
0
Jan-95
Jan-13
Brazil
Jan-98
Jan-01
RoW
Jan-04
Mexico
Jan-07
Jan-10
Jan-13
Saudi Arabia
Source: Managers Research, based on HIS Petrodata (June 2015)
As seen from the above charts, the demand for drilling rigs has declined substantially
over the last months, both for floaters and jack-ups, and thus providing a challenging
market backdrop for the offshore support vessels.
6.3
The Offshore Support Vessel market
6.3.1
General introduction
The offshore support vessel (OSV) market can be divided into several categories and
segments. The main categories are platform supply vessel (PSV), anchor-handling tugs
supply (AHTS) and offshore subsea construction vessels (OSCV). In addition, there are
various niche segments being more specialized. The Group owns and operates vessels
within all these categories.
The market for offshore support vessels is fragmented across segments and regions, with
many owners owning/controlling fleets that can be characterized small to medium in
terms of both size and global reach. Excluding the smaller sizes in PSV and AHTS and
extracting PSV > 3,000 dwt and AHTS > 12,000, the top 5 operators controlled 29% of
the global fleet. Top 3 players Edison Chouest (US), Tidewater (US) and Bourbon
Offshore (FR) each control 5-10% of the global fleet. An overview of the larger
companies within the PSV/AHTS market is shown below. Siem Offshore ranks among the
top 15 within this group, but with the larger operators controlling significantly more
41
vessels. Within the OSCV segment there is various sub segments, including pipelay
vessels, dive support vessels, offshore construction vessels, survey vessels, WellIntervention Vessels etc.
Below is a graphic showing examples of large suppliers of PSV/AHTS vessels (not
exhaustive).
Largest operators, combined AHTS/PSV (>3000 Dwt and > 12000 BHP)
PSV
0
20
40
AHTS
60
80
100
120
140
160
Edison Chouest
Tidewater
Bourbon Offshore
Maersk Supply Service
Farstad
Swire Pacific
GulfMark
DOF
Deep Sea Supply
COSL
CBO
Hornbeck
Siem Offshore
Solstad Shipping
Vroon
Island Offshore
POSH Semco
Topaz Marine
Harvey Gulf International Marine
Havila
Source: Managers Research, based on HIS Petrodata (June 2015)
6.3.2
Regional overview
The North Sea area consists mainly of the continental shelfs of Norway, United Kingdom,
Denmark and Netherlands. Due to the large number of oil companies and limited
distances in the region (Barents Sea being an exception), the market has seen a large
spot market both within the PSV and AHTS segment develop since the 80s. In addition,
the market provides opportunities for various term contract lengths various from months
to several years. While Statoil has a large share of the market in Norway, the market is
well diversified in terms of oil- and service-companies. With the well functioning spot
market, the region is often referred to as a reasonable proxy on the overall global
supply/demand balance since idle vessels in other regions (mainly Med’, West-Africa and
Brazil) tend to migrate into the region.
Brazil is one of the key markets for offshore support vessels. The market is characterized
by the national oil company Petrobras being the dominant player and historically offering
long-term contract opportunities in various segments, attracting operators on a global
basis. The region has a limited spot market and term contracts have been in the range of
1-8 years. The country offers preference towards locally built tonnage both on contract
duration and by differentiating tender processes. Brazil is also highly regulated in terms
of local content requirements.
USGOM is characterized by the Jones Act regulation for the PSV and AHTS segment,
which means operators need to comply with this act to be able to qualify for operations in
this region. Consequently, the region is only served by US operators. With the Jones Act
follows also a large domestic shipbuilding industry. The region holds a large spot market
as well as a term market with various contract durations.
West Africa holds various regional markets related to each country in the region. The
largest markets being Angola and Nigeria. Each market is unique in terms of local
42
content requirements. The region offers smaller spot markets, but by nature is
characterized as various terms markets. The region may offer certain challenges related
to logistics, including dry-docking and maintenance of vessels/equipment.
Asia is similar to West Africa in terms of various local/regional markets. While the port of
Singapore provides a regional hub for vessels standing idle or in-between contracts,
there is no single spot market in the region and also term markets are characterized by
the country of operation. The market is also characterized by being the largest new build
market in the offshore support vessel industry with the key build country being China.
6.3.3
Platform Supply Vessels
The supply vessel market is usually divided into two main areas, namely vessels for
towing and anchor handling, and for general supply to offshore units (rigs, barges, fixed
installations or shore bases), in the industry called general supply duties. Such tasks can
be carried out by both AHTS vessels and PSVs. However, the operation of a PSV is as a
main rule limited to carry out storage duties and supply duties. Both categories of vessels
can be divided further into sub segments according to their capabilities, as a number of
such vessels do have cross-over capacities into other categories and related segments.
Oil Recovery, Fire Fighting, ROV Surveys and Standby ERRV services are some examples
of such capacities.
The market for offshore vessels was very strong in most of 2005-2008, reaching record
levels in the North Sea. The market has been more volatile since 2009 with generally
lower and more fluctuating fleet utilization, and as a result, also fluctuating day rates for
the vessels.
PSVs are specifically designed for transport of all required supplies, either as deck cargo
or under deck in dedicated tank systems to and from offshore installations. On deck the
vessels may carry containers, drill pipes and other equipment. Under deck the vessels
may carry a variety of different fluids in separate tanks, like mud & brine, cement or
other dry bulk, fresh water, fuel and/or special products like methanol and drill cuttings
for the drilling program.
PSVs are mainly classified according to the following capacities:
-
Size of free deck area
-
Total carrying capacity in dead weight tons (dwt)
-
Type and capacity of special tanks carrying mud & brine, fuel, dry bulk,
methanol etc.
Historically, a PSV with dwt above 2,000 have been considered large. However, as the
trend continues towards larger and larger vessels, PSVs with dwt between 3,000 and
4,000 are now considered medium-sized and vessels with a carrying capacity above
4,000 dwt are considered large.
Classified by deck area, this corresponds to approximately 500-800 m2 for medium-sized
vessels, and above 800 m2 for large vessels.
Siem Offshore currently has twelve PSVs in operation, of which six can be classified as
medium size, and six are classified as large. Furthermore, Siem Offshore has four large
PSVs under construction.
The PSV segment has seen substantial contracting of newbuilds over the last years and
there are still quite a large number of vessels with scheduled delivery in 2015 and 2016.
It is worth mentioning that a substantial part of the order book consists of smaller and
less advanced vessels mainly under construction in the Far East and one should expect
43
significant delays as well as potential cancellations. Potentially mitigating the order book
is the relatively significant number of vessels built in the 1980s still in service. We have
already seen an increasing number of older vessels being phased out, and given the
current challenging market, this trend is likely to continue.
Worldwide PSV fleet by building year
Existing fleet
On order
300
250
200
150
100
50
0
80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18
Source: Managers Research, based on IHS Petrodata (June 2015)
6.3.4
Anchor Handling Tug-Supply vessels
AHTS vessels are specifically designed for towing and anchor handling operations of rigs
and other offshore units. Furthermore, the vessels are often prepared for fire fighting
(FiFi), rescue operations (standby) and oil recovery (ORO) capabilities, as well as
additional opportunities like crane for ROV operations, A-frame, large AHC crane for
construction and deepwater work. The AHTS is, like a PSV, also used for general supply
service between shore bases and platforms, transporting different types and grades of
cargo both on deck, as well as under deck in tank systems. In the case where the oil
activity is in deeper waters, the anchor handling operations become heavier and focus is
put on the power of the AHTS vessels, station keeping and winch capabilities, in addition
to the vessels stability, capacities and functionality in general. A general trend for the
segment has been to provide for safer and more efficient operations in more challenging
conditions, as well as various HSE issues for safer operations for the vessels crew.
AHTS vessels are mainly rated according to their towing and anchor handling capacities
and capabilities, propulsion and bollard pull. Break horse power (BHP) is the most
common parameter for categorizing AHTS vessels. The AHTS fleet is normally divided
into vessels with less than 12,000 BHP (small sized), between 12,000 and 16,000 BHP
(medium size), between 16,000 and 20,000 BHP (large) and above 20,000 BHP (very
large). Owners have traditionally focused on vessels with between 12,000 and 18,000
BHP, but with a push in recent years for the larger vessels above 20,000 BHP.
Due to the fact that the offshore industry has increased its presence in deeper water and
outer areas where more and special capacity will be required, and also to be able to work
in various markets, Siem Offshore has decided to focus on the high-end of the AHTS
market, i.e. vessels above 20,000 BHP.
In 2011 Siem Offshore completed a new build program of ten AHTS vessels in the
category "very large", of which eight vessels are owned by Siem Offshore. The AHTS
newbuilds are of VS 491 design, which meets the current and future requirements of the
industry serving the next generation of drilling rigs and floaters for global offshore and
deep water work. The AHTS vessels are of designs promoting favorable fuel consumption
and consequently low emissions as a result of their optimal hull lines, Selective Catalysts
Reduction (SCR) and hybrid propulsion, high speed and large all round capacities. The
44
AHTS newbuilds have bollard pull of 275 tons, prepared for ROV operations, 60 men
accommodation and have a lot of optionality such as A-frame (300t), large AHC crane
(300t) etc.
Similar to the PSV market, there are also quite a number of AHTS vessels under
construction with the majority being scheduled for delivery in 2015 and 2016. Also for
the AHTS vessels, a large number of vessels are smaller and less sophisticated vessels
being built in the Far East where one should expect delays and potential cancellations.
There are also a large number of AHTS vessels that are built in the early 1980s which in
the current market environment are obvious phase out candidates.
Worldwide AHTS fleet by building year
Existing fleet
On order
250
200
150
100
50
0
80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18
6.3.5
Offshore Subsea Construction Vessels
OSCV, often quoted as subsea vessels, are utilized in the installation, light construction,
inspection and maintenance of subsea equipment related to the extraction of oil and gas
offshore. The vessels may also be utilized within certain non-oil and gas related segment,
e.g. the offshore wind industry. The OCSVs can further be divided into various
subcategories:
- Pipelay Vessels;
- Dive Support Vessels
- Heavylift/Derrick Barges
- Offshore Construction Vessels
- Seismic Support Vessels
- Well-Intervention Vessels
- Survey Vessels
Siem Offshore currently has a wide range of vessels in the OSCV category, including a
series of four vessels operating in the subsea support/IMR role along with two MRSV
(Multipurpose field & ROV support vessels). The Group also has certain vessels in
operation and under construction targeting the offshore wind market and the well
intervention market.
The OSCV segment in today’s form is a relatively new segment as the majority of vessels
have been ordered since the mid 2000s following the oil company’s focus on subsea
solutions. There are however quite a few older vessels, but these are generally less
sophisticated and not comparable to standards seen on modern vessels. Prior to the
financial crisis there was large ordering activity with vessels being delivered in 2008 and
2010. Newbuild deliveries then saw a drop to around 40 vessels per year in 2011 to 2013
45
before increasing to around 50 vessels in 2014. For 2015 and 2016 the number of
vessels scheduled for delivery is estimated to increase to around 70-80 per year.
Delivery of construction vessels*
90
80
70
60
50
40
30
20
10
0
Construction vessels delivered
Source: Managers Research, based on HIS Petrodata June 2015)
*Accommodation, Bury/Trench, Derrick, Derrick Pipelay, Diving support, Multiservice, Pipelay, ROV Support,
Support, Well Intervention
Over the last years there has been a lot of subsea activity. The chart below shows the
total subsea order intake for the three major subsea contractors from 2003 to 2014
which represents a good indication with respect to demand for subsea vessels. As seen
from the chart their order intake was relatively stable at around USD 15 billion per year
in the period 2006 to 2010, while increasing to around USD 26 billion in 2014. Following
the collapse in oil prices lately, 2015 is likely to show a significant decline compared to
2014.
Subsea order intake (USDbn)
30
25
20
15
10
5
0
2003
2004
2005
2006
2007
Saipem (USD)
2008
2009
Tecnhip (USD)
2010
SUBC (USD)
Source: Managers Research (June 2015)
46
2011
2012
2013
2014
6.4
Rate development and utilisation
The offshore support vessel market is cyclical, and spot market rates in the North Sea
region are characterized by significant volatility. This relates mostly to the underlying
cyclicality of the business, but also to variations between summer and winter season and
to changes within shorter time periods. In particular, the summer season is generally
characterized by high activity levels. To a large extent, this can be attributed to the
weather conditions in the North Sea Region. The current spot rates for PSVs in the North
Sea are very low and insufficient to cover costs. The weak market has triggered several
operators to lay up vessels in order to cut losses. Rates for longer contracts generally
fluctuate less, but is highly correlated with the spot market. As mentioned above, the
regions outside the North Sea do not have as visible and efficient spot market. The
development and status in the North Sea region gives a good indication of the conditions
of charters elsewhere in the world. Other regions are characterized more by medium to
long term charters, but facing the same negative trends on both rates and utilization as
seen in the North Sea area.
While the industry trend has been operators having preference for newer and more
efficient vessels (both fuel and operational) and consequently improving utilization vs.
older tonnage, the weak market trends are seen across vessel segments (size and age).
The following chart shows monthly average spot rates from 2002 until today for large
AHTS vessels:
AHTS spot dayrates (monthly average, GBP/d)
140 000
120 000
100 000
80 000
60 000
40 000
20 000
0
jan.02 jan.04 jan.06 jan.08 jan.10 jan.12 jan.14
Source: Managers Research, based on Clarksons (June 2015)
North Sea AHTS rates have seen large fluctuations in recent years with a gradually
softening late 2014 and into 2015, although shorter periods of tightness are still
observed. With softer activity levels, market participants also prepare for soft markets by
stacking vessels as also is the case in the PSV segment.
47
The figure below shows the corresponding data for large PSV vessels:
PSV spot dayrates (monthly average, GBP/d)
45 000
40 000
35 000
30 000
25 000
20 000
15 000
10 000
5 000
0
jan.02 jan.04 jan.06 jan.08 jan.10 jan.12 jan.14
Source: Managers Research, based on Clarksons (June 2015)
The PSV spot market has been weak since late 2014 and North Sea PSV rates are
touching levels not seen since 2002-04 and briefly in 2009-10.
On an overall basis the combined utilization of AHTS and PSVs have been around 90% in
the years following the financial crisis except for 2014 when utilization dropped to around
88%. The market has further deteriorated in 2015 and currently a significant number of
vessels have been put in lay-up as a consequence of lower activity amongst oil
companies and too many available vessels in the market.
Overall PSV /AHTS fleet utilization chart (North Sea)
Demand
Supply
Utilization
98%
96%
94%
92%
90%
88%
86%
84%
82%
80%
78%
76%
400
350
300
250
200
150
100
50
0
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
48
The below table shows the overall contract awards for construction vessels, both shown
for number of awards as well as volume measured in days. While the number of awards
has increased relatively steadily since 2007, the average contract length (volume) has
declined sharply since 2013, potentially reflecting tougher competition.
Contract awards construction vessels*
180
70000
160
60000
140
50000
120
100
40000
80
30000
60
20000
40
10000
20
Number of awards
1q15
3q14
1q14
3q13
1q13
3q12
1q12
3q11
1q11
3q10
1q10
3q09
1q09
3q08
1q08
3q07
0
1q07
0
Volume (days)
Source: Managers Research, based on HIS Petrodata June 2015)
*Accommodation, Bury/Trench, Derrick, Derrick Pipelay, Diving support, Multiservice, Pipelay, ROV Support,
Support, Well Intervention
49
7.
CAPITALISATION AND INDEBTEDNESS
The information presented below should be read in conjunction with the other parts of
this Prospectus, in particular Section 8 "Selected financial and other information", and
the Group's financial statements and the notes related thereto, included in Appendix B of
this Prospectus.
Other than as set forth as above, there has been no material change to the Group’s
unaudited consolidated capitalisation and net financial indebtedness since 31 March
2015.
7.1
Capitalisation
The following table sets forth information about the Group’s consolidated capitalisation as
at 31 March 2015.
As of
31 March 2015
(unaudited)
In USD 1000
Indebtedness
362 091
Total current debt:
Guaranteed and secured .......................................................................
Guaranteed but unsecured ....................................................................
Secured but unguaranteed ....................................................................
Unguaranteed and unsecured ................................................................
0
0
169 467
1 038 532
Total non-current debt:
Guaranteed and secured .......................................................................
Guaranteed but unsecured ....................................................................
Secured but unguaranteed ....................................................................
Unguaranteed and unsecured ................................................................
Total indebtedness ............................................................................
Shareholders’ equity
Paid in capital ......................................................................................
Other reserves .....................................................................................
Retained earnings ................................................................................
Non-controlling interests .......................................................................
Total shareholders’ equity .................................................................
Total capitalisation ............................................................................
7.2
192 624
877 830
0
0
160 702
1 400 623
526 236
-86 796
279 060
36 497
754 997
2 155 619
Net financial indebtedness
The following table sets forth information about the Group’s net financial indebtedness as
at 31 March 2015.
As of
31 March 2015
In USD 1000
(unaudited)
(A)
Cash ...........................................................................................
(B)
Cash equivalent (Detail) ................................................................
(C)
Trading securities .........................................................................
50
89 668
0
0
As of
31 March 2015
In USD 1000
(unaudited)
(D) Liquidity (A)+(B)+(C) ...............................................................
(E)
Current Financial Receivable .....................................................
(F)
Current Bank debt ........................................................................
(G)
Current portion of non-current debt ................................................
(H)
Other current financial debt ...........................................................
(I)
Current Financial Debt (F)+(G)+(H) .........................................
(J)
Net Current Financial Indebtedness (I)-(E)-(D) ........................
(K)
Non current Bank loans .................................................................
(L)
Bonds issued ...............................................................................
(M)
Other non-current loans ................................................................
(N) Non-current Financial Indebtedness (K)+(L)+(M) ....................
(O) Net Financial Indebtedness (J)+(N) ..........................................
89 668
234 985
192 624
0
169 467
362 091
37 437
810 700
160 702
0
971 402
1 008 839
The loan facilities established to finance the construction and acquisitions of the
Company's vessels are secured by, a first priority mortgage on the applicable vessels,
and in most cases also security in earnings, charter contracts, insurance and hedging
arrangements. As of end first quarter 2015, the Company had approximately USD 160
million in outstanding unsecured bond debt with maturity in January 2018 and March
2019.
7.3
Working Capital Statement
As of the annual reporting for the fiscal year 2014, the Company was of the opinion that
it had sufficient working capital for the next 12 months based on the assumptions of the
OSV market at that time. Based on an unfavourable development and assumed
continued soft OSV market, the shortfall for the Company’s working capital is currently
expected to materialize in second half of 2015 given regular debt schedule payments and
payments related to the existing newbuilding program.
Accordingly, it is the Company's opinion that the Group at present time does not have
sufficient working capital for its current requirements, i.e. for the next 12 months.
In order to prepare the Company for the expected soft OSV market and meet the Group's
current debt obligations and make payments under the Group's newbuilding program for
a period of twelve months from the date of this Prospectus, the Company is dependent
on additional financing of approximately USD 100 million. The additional financing will be
raised through the fully underwritten Rights Offering as described in this Prospectus.
As further described in Section 13.20 "The Rights
underwriting commitment of Siem Europe S.a r.l. for
upon certain events not taking place. The Company is
will be successful, or that if it is unsuccessful, that
underwriting commitment.
51
Offering—The underwriting", the
the Rights Offering is conditional
confident that the Rights Offering
the Company may call upon the
7.4
Debt instalments falling due over the next 5 years, as of year-end 2014.
Parent Company
(USD 1000’)
80 719
94 172
174 891
Consolidated
Mortgage Other interest
debt
bearing debt
Instalments per December 31, 2014
falling due over the next 5 years
2015
2016
2017
2018
2019
Thereafter
Total
308 902
99 623
118 926
282 909
75 975
166 380
1 052 714
80 719
94 172
174 891
Total
308 902
99 623
118 926
363 628
170 147
166 380
1 227 605
The book value of mortgaged assets consisted of non-current tangible assets and portion
of the accounts receivables and amounted to USD 1,764 million at year end 2014.
For the first 3 months of 2015 the company has repaid debt in the amount of
approximately USD 25 million and drawn approximately USD 1 million.
Current cost of debt is approximately 4.5% p.a., including the effect of interest rate
derivatives.
In July 2015, the company announced that it had received approval from all of its
financing banks for the finance plan of the Company. The approvals includes a three year
extension of the Company's NOK 2.5 billion credit facility for six anchor handling tug
supply vessels, which was due to expire in November 2015. As a result of this, a balloon
repayment of approximately USD 200 million maturing in 2015 in the table above will not
materialize, but the facility will continue on existing repayment profile until 2018. Thus,
accordingly reducing the applicable balloon repayment in 2018.
The Company will finance its debt and yard commitments, for the remaining period with
vessels under construction, through the proceeds of this Rights Offering, existing capital
and revenue generated through the ordinary course of business
7.5
Contingent and Indirect Indebtedness
As at 31 December 2014 the Group had the following contingent or indirect indebtedness
in the form of guarantees.
Parent company
12/31/2014 12/31/2013
106 131
106 131
120 291
120 291
(Amounts in USD 1,000)
Contractual guarantees to Brazilian Navy (1)
Contractual guarantees other (2)
Total guarantees
Consolidated
12/31/2014 12/31/2013
593
141 315
141 908
4 304
150 014
154 317
1) Contractual guarantees to the Brazilian Navy are issued by Siem Offshore do Brasil SA.
2) Contractual guarantees provided by the Company are security for contracting parties of Siem Offshore
Contractors GmbH. Such guarantees are for advance payments received at USD 27.3 million and performance
guarantees at USD 109.3 million and guarantees related to tax cases in Brazil of USD 4.7 million.
52
8.
SELECTED FINANCIAL INFORMATION
8.1
Introduction and Basis for Preparation
The following selected financial information have been extracted from the Group's
audited consolidated financial statements for the year ended 31 December 2014 and for
the three months periods ended 31 March 2014 and 2015. These financial statements are
prepared under the International Financing Reporting Standards ("IFRS") as approved
by the European Union. The interim financial statements for the three months periods
ended 31 March 2014 and 2015 are unaudited.
8.2
Summary of Accounting Policies and Principles
For information regarding the Group’s accounting policies under IFRS and the use of
estimates and judgements, please refer to the notes of the Group's consolidated financial
statements prepared under IFRS for the year ended 31 December 2014, included in this
Prospectus as Appendix B.
53
8.3
The table below sets out selected data from the Group’s consolidated income statements
for the year ended 31 December 2014 and for the three months period ended 31 March
2015.
2015
Jan-Mar
Unaudited
125 995
-77 096
-10 160
38 739
-26 750
-15
92
-36 052
-23 986
2014
Jan-Dec
Audited
491 312
-250 153
-47 033
194 125
-96 883
-29 000
18 728
368
-3 023
84 316
Financial revenues
Financial expenses
Net currency gain (loss)
Net financial items
2 249
-11 934
-553
10 022
-216
9 091
-55 868
1 808
34 092
-10 877
Profit/(loss) before taxes
-24 203
73 439
Tax benefit / (expense)
Net profit/(loss)
Weighted average number of shares outstanding ('000)
Earnings(loss) per share (basic and diluted)
-1 360
-25 562
-49
-25 612
387 591
-0.07
-2 729
70 710
12 563
58 147
387 591
0.15
2015
1Q
Unaudited
-25 562
2014
Jan-Dec
Audited
70 710
-
1 510
-32 392
-3 797
-61 751
-48
-61 799
-14 622
-11 100
46 499
12 271
34 228
Operating revenues
Operating expenses
Operating margin
Gain (loss) on sales of fixed assets
Gain of sale of interest rate derivatives (CIRR)
Gain (loss) on currency derivative contracts
Operating profit
Comprehensive Income Statements
Net profit/(loss)
Other comprehensive income (expense)
Items that will not be reclassified to profit or loss
Items that may be subsequently reclassified to profit or loss
Cash flow hedges
Total comprehensive income for the period
54
8.4
Selected Statements of Financial Position
The table below sets out selected data from the Group’s consolidated statements of
financial position as of 31 December 2014 and 31 March 2015.
Consolidated Statements of Financial Position
Non-current assets
Capitalised project cost
Investment in associates and other long-term receivables
CIRR loan deposit 1)
Deferred tax asset
Intangible assets
Debtors, prepayments and other current assets
Asset held-for-sale
Total assets
31.03.2015
Unaudited
31.12.2014
Audited
1 596 220
127 035
10 022
35 051
26 145
12 587
23 905
1 830 966
130 875
104 110
89 668
324 654
1 743 693
130 515
10 965
43 654
28 453
12 591
25 937
1 995 809
147 152
117 623
264 774
2 155 619
2 260 584
Equity
Paid-in capital
Other reserves
Retained earnings
Shareholders´ equity
Total equity
Liabilities
Borrowings
CIRR loan 1)
Borrowings
Accounts payable and other current liabilities
526 236
-86 796
279 060
718 500
36 497
754 997
526 236
-45 491
304 237
784 982
38 666
823 649
971 402
26 145
40 985
1 038 532
192 624
169 467
362 091
1 087 757
28 453
38 532
1 154 742
126 603
155 590
282 193
Total liabilities
1 400 623
1 436 935
2 155 619
2 260 584
1) Commercial Interest Reference Rate
55
8.5
Selected Statements of Cash Flows
The table below sets out selected data from the Group’s consolidated statements of cash
flows for the year ended 31 December 2014 and for the three months period ended 31
March 2015.
Consolidated Statements of Cash Flows
2015
Jan-Mar
Unaudited
2014
Jan-Dec
Audited
-12 435
-13 092
-1 360
553
15
336
26 750
27 264
-5 538
-92
5 400
27 802
117 702
-46 362
-8 957
-1 808
-18 728
2 462
96 883
29 000
5 612
19 918
-368
-11 010
184 345
Interest received
Investments in fixed assets
Proceeds from sale of fixed assets
956
-16 730
0
-2 251
-18 024
4 171
-525 674
76 290
278
-12 201
-457 136
Cashflow from financing activities
Proceeds from issue of new equity
Dividend payment
Contribution from non-controlling interests of consolidated subsidiaries
Proceeds from bank overdraft
Cash flow from financing activities
-1 309
1 335
-25 489
-25 463
1 336
-6 533
5 624
447 701
-131 936
316 192
Net change in cash
-15 686
43 400
Cash at bank start of period
Cash at bank end of period
117 621
-12 267
89 668
101 206
-26 985
117 621
Cash flow from operations
Profit before taxes, excluding interest
Interest paid
Taxes paid
Results from associated companies
Loss/(gain) on sale of assets
Impairments of vessels
Change in short-term receivables and payables
CIRR
Other changes
Net cash flow from operations
56
8.6
Selected Statement of Changes In Equity
The table below sets out selected data from the Group’s consolidated statement of
changes in equity for the year ended 31 December 2014 and for the three months period
ended 31 March 2015.
Consolidated Statement of Changes in Equity
Cash flow hedge
Equity on March 31, 2015
(Amount in USD 1 000)
Buy back of shares
Dividend paid
Shares issues in Siem Offshore Inc
Equity on December 31, 2014
8.7
Share
premium
reserves
522 361
Other
reserves
-45 491
0
0
-32 392
-8 913
-41 305
-25 177
3 876
522 361
-86 796
279 060
Total no. of
387 591 380
3 876
Share
premium
reserves
522 361
Other
reserves
-19 769
Retained
earnings
250 161
-1 510
58 147
2 462
1 510
0
0
-25 721
-25 721
0
0
Total no. of
387 591 380
3 876
387 591 380
Retained
earnings
304 237
0
-25 513
336
60 609
-6 533
387 591 380
3 876
522 361
-45 491
304 237
Shareholders'
equity
784 983
0
-25 513
336
-32 392
-8 913
-66 482
0
718 501
Shareholders'
equity
756 629
-1 510
58 147
2 462
1 510
-25 721
34 887
0
0
-6 533
0
784 983
NonControlling
38 666
823 649
0
-49
-25 562
336
-32 392
1
-8 912
-48
-66 531
152
152
-2 274
-2 274
36 496
754 997
NonControlling
37 260
793 888
-1 510
12 563
70 710
2 462
1 510
-293
-26 014
12 271
47 158
1 336
1 336
-12 201
-12 201
0
-6 533
0
38 666
823 649
Segment Information
The Company identifies its reportable segments and discloses segment information under
IFRS 8 Operating Segments which requires Siem Offshore Inc. to identify its segments
according to the organization and reporting structure used by management. Operating
segments are components of a business that are evaluated regularly by the chief
operating decision maker for the purpose of assessing performance and allocating
resources. The Company’s chief operating decision maker is the management board,
comprised of the CEO of Siem Offshore Inc., CFO and Commercial Director. Generally,
financial information is required to be disclosed on the same basis that is used by the
chief operating decision maker. The Company’s operating segments represent separately
managed business areas with unique products serving different markets. The reportable
segments are Siem Offshore OSV and Siem Offshore Industrial Investments, with the
seven sub segment business areas PSV, OSCV, AHTS Vessels, Other Vessels in Brazil,
Submarine Power Cable Installation, Combat Management Systems, Scientific CoreDrilling and Siem WIS.
Under Siem Offshore OSV, the PSV segment includes 12 Platform Supply Vessels. The
OSCV segment includes four Offshore Subsea Construction Vessels and two Multipurpose
field and ROV Support Vessels. The AHTS segment includes ten Anchor Handling Tug
Supply Vessels. The Segment of Other Vessels in Brazil consists of one Oil Spill Recovery
Vessel and eight smaller Platform Supply Vessels.
Under Siem Offshore Industrial Investments, the Submarine Power Cable Installation
comprises the activities of installation and maintenance of subsea power cables for
offshore windfarms. Combat Management Systems is the activity of supplying software
57
for a management system to the Brazilian Navy. Scientific Core-Drilling is comprised of
the activity of the scientific drillship, “JOIDES Resolution” which performs core drilling.
Siem WIS develops applications for MPD, and certain other investments.
The Company uses two measures of segment results, operating revenue and operating
profit. Intersegment sales and transfers reflect arm’s length prices as if sold or
transferred to third parties at the time of inception of the internal contract, which may
cover several years. Transfers of businesses or fixed assets within or between the
segments are reported without recognizing gains or losses. Results of activities not
considered part of the Company’s main operations as well as unallocated revenues,
expenses, liabilities and assets are reported together with Other under the caption Other
and intercompany eliminations.
The following tables include information about the Company’s operating segments.
Segment Reporting by Business Area
2015
1Q
Unaudited
2014
Jan-Dec
Audited
Operating revenue by business area
Platform Supply Vessels (1)
Anchor Handling Tug Supply Vessels (1)
Other vessels in Brazil
Other/Intercompany elimination
Operating revenue, OSV segment
24 619
30 356
15 480
6 715
-1 496
75 674
104 423
104 844
142 480
19 351
-15 854
355 244
Submarine Power Cable activities
Combat Management Systems
Scientific Core-Drilling
Siem WIS
Operating revenue, Industial Investments segment
41 023
2 243
6 474
580
50 321
101 479
6 075
25 914
2 601
136 069
125 995
491 312
2015
1Q
Unaudited
2014
Jan-Dec
Audited
8 042
14 238
-9 974
1 578
2 628
16 512
35 437
48 073
39 232
-35 343
2 521
89 919
Total operating revenue
Operating profit by business area
Platform Supply Vessels
Anchor Handling Tug Supply Vessels
Other vessels in Brazil
Other/Intercompany elimination
Operating profit, OSV segment
58
p
gp
g
Submarine Power Cable activities
Scientific Core-Drilling
Siem WIS
Operating profit, Industial Investments segment
Currency gain / (loss)
Total operating profit
3 069
-25
2 666
-73
5 637
15 581
-8
9 429
355
25 357
-10 160
-35 976
-23 986
-47 033
16 074
84 316
(1) Platform Supply Vessel category and Anchor Handling Tug Supply Vessel category include
I/C revenue from contracting work for the 100% owned subsidiary "Siem Offshore Contractors GmbH
which is included in the I/C eliminations in the table above.
8.8
Auditor
The Company’s auditor is PricewaterhouseCoopers AS, with registration number 987 009
713 and business address at Dronning Eufemias gate 8, 0191 Oslo, Norway.
PricewaterhouseCoopers AS is a member of Den Norske Revisorforeningen (The
Norwegian Institute of Public Accountants). PricewaterhouseCoopers AS has been the
Group’s auditor throughout the period covered by financial information included in the
Prospectus.
PricewaterhouseCoopers AS' audit reports on the annual financial statements for the
Company for 2014 are included together with the annual financial statements for the
Company for 2014 in Appendix B. PricewaterhouseCoopers AS has not audited, reviewed
or produced any report on any other information provided in this Prospectus.
59
9.
BOARD OF DIRECTORS, MANAGEMENT, EMPLOYEES AND CORPORATE
GOVERNANCE
9.1
Board of Directors
9.1.1 Overview
The Articles of Association provide that the Board of Directors shall consist of a minimum
of three and a maximum of seven members.
As at the date of this Prospectus, the Company's Board of Directors consists of the
following:
Name of director
Director since
Current term expires
Eystein Eriksrud (Chairman)
2010
2016
Kristian Siem
2005
2017
Michael Delouche
2005
2016
David Mullen
2008
2017
John C. Wallace
2012
2016
The Board of Directors is in compliance with the independence requirements of the
Norwegian Code of Practice for Corporate Governance dated 30 October 2014 (the
"Corporate Governance Code"), meaning that (i) the majority of the shareholderelected members of the Board of Directors is independent of the Company’s executive
management and material business contacts, (ii) at least two of the shareholder-elected
members of the Board of Directors are independent of the Company’s main shareholders,
and (iii) no members of the Company’s executive management are on the Board of
Directors.
Eystein Eriksrud, Kristian Siem and Michael Delouche represent the Company's main
shareholders, Siem Europe S.a r.l., and are not considered as independent. David Mullen
and John C. Wallace are both considered as independent Board Members.
The following serves as the business address for the members of the Board of Directors
in relation to their directorships in the Company:
Nodeviga 14
4610 Kristiansand
Norway
9.1.2 Brief biographies of the members of the Board Directors
Eystein Eriksrud (born 1970), Chairman
Mr. Eriksrud is the Deputy CEO of Siem Industries Inc., the Company’s main
shareholder. He is further the chairman of Electromagnetic Geoservices ASA,
Flensburger Schiffbaugesellschaft mbH & Co KG and a director of Subsea 7 S.A. Prior to
joining Siem Industries in October 2011, he was partner of the Norwegian law firm
Wiersholm Mellbye & Bech since 2005 working as a business lawyer with an
internationally oriented practice in mergers and acquisitions, company law and
securities law, particularly in the shipping, offshore and oil service sectors. He was
Group Company Secretary of the Kvaerner Group from 2000-2002 and served as Group
General Counsel of the Siem Industries Group from 2002-2005. He has served on the
boards of Veripos Inc., Privatbanken ASA and Tinfos AS as well as a number of other
boards. Eriksrud is a Norwegian citizen.
60
Kristian Siem (born 1949), Board member
Mr. Siem is chairman of Siem Industries Inc., Subsea 7 S.A. and Siem Industrikapital
AB and a director of Siem Shipping Inc., Flensburger Schiffbau-Gesellschaft mbH & Co.
KG, North Atlantic Smaller Companies Investment Trust plc. and NKT Holding A/S. Mr.
Siem is a Norwegian citizen.
Michael Delouche (born 1957), Board member
Mr. Delouche is the president and the secretary of Siem Industries Inc. and is in charge
of the Company's operations at the registered office in George Town, Cayman Islands.
He is a director of Siem Shipping Inc. and a former director of Subsea 7 Inc. Mr.
Delouche received degrees in civil engineering (structural) and business and was
previously an audit manager with KPMG Peat Marwick LLP. Mr. Delouche is a US citizen.
David Mullen (born 1958), Board member
David Mullen is the founder and CEO of Shelf Drilling, an international shallow water
drilling contractor. Since the company's inception in November 2012, David has lead
Shelf Drilling through a series of complex transactions in establishing Shelf Drilling with
a fleet of 37 Jack-ups and 1 swamp barge and 2 new build rigs under construction. Prior
to Shelf Drilling, David was CEO of Wellsteam Holdings PLC, a UK-listed company that
designs, manufactures and services subsea pipeline products. From 2008 – 2010, David
served as CEO of Ocean Rig ASA, a Norway-listed ultra-deep water drilling contractor.
Prior to 2008 David held executive management positions with Transocean and
Schlumberger Limited, including a 23 year career with Schlumberger Limited.
Mr. Mullen holds a degree in geology from Trinity College, Dublin, and a master degree
in geophysics from the University College Galway, Ireland. Mr. Mullen is an Irish citizen.
John C. Wallace (born 1938), Board member
John
C.
Wallace
is
a
Chartered
Accountant
having
qualified
with
PricewaterhouseCoopers in Canada in 1963, after which he joined Baring Brothers &
Co., Limited in London, England. Prior to his retirement in 2010, he served for over
twenty-five years as Chairman of Fred. Olsen Ltd., a London-based corporation that he
joined in 1968 and which specializes in the business of shipping, renewable energy and
property development. He received his B. Comm degree majoring in Accounting and
Economics from McGill University in 1959. In November 2004, he successfully
completed the International Uniform Certified Public Accountant Qualification
Examination and has received a CPA Certificate from the State of Illinois. Mr. Wallace
also retired from the board of directors of Ganger Rolf ASA and Bonheur ASA, Oslo,
both publicly-traded shipping companies with interests in offshore energy services and
renewable energy. He is a Director of Callon Petroleum Co , USA where he is Chairman
of the Audit Committee. He was inducted as a 2011 Industry Pioneer by the Offshore
Energy Centre in Houston. Mr. Wallace is a Canadian citizen.
9.1.3 Remuneration
The remuneration paid to the members of the Board of Directors (acting in capacity as
board members) in 2014 was USD 440,000.
9.1.4 Shares and options held by members of the Board of Directors
As at the date of this Prospectus, the Chairman Eystein Eriksrud holds 45 000 Shares in
the Company through his wholly-owned company Laburnum AS. None of the other
members of the Board of Directors holds any Shares or options for Shares in the
Company.
The main shareholder of the Company, Siem Europe S.a r.l. is controlled by a trust
where certain members of Kristian Siem’s family are potential beneficiaries.
9.2
Management
9.2.1 Overview
61
The senior management of the Company consists of four individuals. The names of the
members of the Management as at the date of this Prospectus, and their respective
positions, are presented in the table below:
Name
Idar Hillersøy
Dagfinn B. Lie
Bernt Omdal
Tore B. Johannessen
Position
Chief Executive Officer
Chief Financial Officer
Chartering Director
Organization and HR Director
Served since
August 2015
October 2007
July 2011
May 2012
The following serves as the business address for the members of Management in relation
to their positions in the Company:
Nodeviga 14
4610 Kristiansand
Norway
9.2.2 Brief biographies of the members of the Management
Set out below are brief biographies of the members of the Management, including their
relevant management expertise and experience, an indication of any significant principal
activities performed by them outside the Company and names of companies and
partnerships of which a member of the Management is or has been a member of the
administrative, management or supervisory bodies or partner the previous five years
(not including directorships and management positions in subsidiaries of the Company).
Idar Hillersøy (born 1963) – Chief Executive Officer
Mr. Idar Hillersøy was appointed CEO of Siem Offshore with effect from 1 August 2015.
Mr. Hillersøy joined the Company in April 2015 as CEO of Siem Offshore OSV. Idar
Hillersøy is also the President and CEO of Secunda Canada (50% owned by Siem
Offshore). He has OSV Management and Project Management experience from Simon
Møkster Shipping AS (CCO), Seabrokers (General Manager), Norwegian Contractors and
Stolt Offshore. Idar Hillersøy holds an engineering degree from Høgskolen i Sør
Trøndelag (HiST) and an MBA from Heriot-Watt University. Idar Hillersøy is a Norwegian
citizen and resident in Stavanger and Kristiansand, Norway.
Dagfinn B. Lie (born 1972) – Chief Financial Officer
Mr. Dagfinn B. Lie joined Siem Offshore in October 2007 as Controller and was appointed
CFO with effect from 1 January 2009. Dagfinn B. Lie has a Master in Finance &
Accounting and an MBA from the Norwegian School of Economics and Business
Administration. Prior to his current employment in Siem Offshore he has gained
experience from, among others, the companies Wallenius Wilhelmsen Logistics and ABB
Offshore. Dagfinn B. Lie is a Norwegian citizen and resident in Vennesla, Norway.
Bernt Omdal (born 1966) – Chartering Director
Mr. Bernt Omdal was appointed as head of chartering 1 July 2011. Bernt Omdal has been
the Chartering Director of the company since November 2008 and has more than 20
years of experience within the maritime industry, including chartering, operations and
shipbroking. Bernt Omdal is a Norwegian citizen and resident in Kristiansand, Norway.
Tore B. Johannessen (born 1955) – Organization and HR Director
Mr. Tore B. Johannessen was appointed Global HR Director for Siem Offshore with effect
of 15 May 2012. He has a long and diverse experience from the oil and gas industry. He
came from the position as Senior Vice President HR & Organization in TTS Energy AS. He
has also previous experience from position as Regional General Manager in DnB, Norway
and Vice President HR & Organization in Hydralift AS. Tore B. Johannessen is a
Norwegian citizen and resident in Kristiansand, Norway.
62
9.2.3 Remuneration and benefits
The remuneration paid to the members of the Management in 2014 was TUSD 2,421.4.
The table below sets out salaries and other benefits to the members of the Management
in 2014 (all in USD 1,000).
Name
Salary paid
Terje Sørensen*
Dagfinn B. Lie
Svein Erik Mykland*
Bernt Omdal
Tore B. Johannessen
610.6
310.5
452.4
391.4
388.6
Pension
premium
33.8
31.1
40.6
37.2
41.0
Other
benefits
55.9
12.5
9.0
3.1
3.7
Share
options
3,600,000
2,400,000
2,400,000
2,400,000
2,400,000
*Terje Sørensen will leave the Company after a transition phase following the stock exchange notice on 31st of
July 2015 where Idar Hillersøy was appointed new CEO of Siem Offshore Inc.
Svein Erik Mykland will further step down as Chief Operating Officer and take over responsibility for the follow
up and development of Siem Offshore Contractors. A new Chief Operating Officer will be employed.
9.2.4 Long-term incentive program
The Company has entered into two Share based option programs, the first in 2013 and
the second in 2014.
On the 13 January 2013, the Company entered into Share option agreement with
selected employees. The Board of Directors awarded 14,000,000 share options to eight
key employees of the Company. The exercise price is NOK 8.45 per share. The exercise
price of the granted options is equal to the market price of the shares on the date of the
grant.
On the 2 April 2014, the Company entered into Share option agreement with selected
employees. The Board of Directors awarded 3,000,000 share options to ten key
employees of the Company. The exercise price is NOK 9.07 per share. The exercise price
of the granted options is equal to the market price of the shares on the date of the grant.
9.2.5 Shares held by members of the Management
As of the date of this Prospectus, the members of the Management own Shares as
follows:
Name
Dagfinn B. Lie
Bernt Omdal
Tore B. Johannessen
Idar Hillesøy
Other key employees
9.3
Shares owned
428,161
0
0
0
240,000
Share options
2,400,000
2,400,000
2,400,000
0
5,000,000
Directorships and management positions held by the Board Members and
the senior management
The following table sets forth all companies and partnerships in which the members of
the Board of Directors and senior management have been members of the
administrative, management and supervisory bodies in the previous five years (not
including subsidiaries within the Group).
63
Overview Board Members
Name of officer
Positions
Kristian Siem
Current:
Eystein Eriksrud
Company or partnership
Director
Siem Offshore Inc.
Chairman
Siem Industries Inc.
Director
Frupor S.A
Director
Siem Shipping Inc.
Chairman
Subsea 7 S.A
Deputy
Chairman
NKT Holding A/S
Director
North Atlantic Smaller Companies Investment
Trust plc
Director
Flensburger Schiffbau-Gesellschaft mbH & Co. KG
Current:
Chairman
Siem Offshore Inc.
Director
Subsea 7 S.A
Chairman
Electromagnetic Geoservices ASA
Chairman
Siem Kapital AS
Chairman
Flensburger Schiffbau-Gesellschaft mbH & Co. KG
Director
VSK Finance Ltd.
Director
VSK Holdings Ltd
Director
Ember VRM S.a r.l.
Director
Siem Car Carriers AS
Chairman
Laburnum AS
Director
Siem Europe S.a r.l.
Director
Siem Capital UK Ltd.
Director
Epistates Ltd.
Director
Siem WIS AS
Director
SCC Shipowning II DA
Chairman
SCC Shipowning I AS
Director
Star Reefers AS
Terminated:
Chairman
Veripos Inc.
64
John Wallace
Current:
Director
Siem Offshore Inc.
Director
Callon Petroleum Co.
Director
LNG Direct Rail Ltd.
Director
Secunda Holdings GP Inc.
Director
Secunda Operations GP Inc.
Terminated:
David Mullen
Director
Bonheur ASA
Director
Ganger Rolf ASA
Director
Fred. Olsen Ltd.
Current:
Director
Siem Offshore Inc.
Chairman
Shelf Drilling Midco Ltd.
Director
Shelf Drilling Ltd. and its wholly owned subsidiary
companies.
CEO & Director
Shelf Drilling Holdings Ltd.
Terminated:
Michael Delouche
CEO & Director
Ocean Rig AS
Director
Ocean Rig Ltd
Director
Ocean Rig UK Ltd
Director
Tercel Oilfield Products Ltd.
CEO & Director
Wellstream Holdings PLC
Director
Wellstream International Ltd
Director
Ocean Rig Ghana Ltd
Director
Wellstream Finance Ltd
Director
Wellstream (Trustee) Ltd
Current:
Director
Siem Offshore Inc.
Director
Siem Shipping Inc.
President
Siem Industries Inc.
Manager A
Director
Deep Seas Insurance Ltd.
Director
VSK Holdings Inc.
Director
VSK Finance Inc.
Director
Various Cayman Island subsidiaries of Subsea 7
S.A.
65
Overview Senior Management
Name of officer
Positions
Idar Hillersøy
Current:
CEO
Siem Offshore Inc.
Director
EAH Holding AS
Current:
Dagfinn B. Lie
CFO
Siem Offshore Inc.
Chairman
DG – Invest AS
Current:
Bernt Omdal
Tore
Johannessen
Company or partnership
B.
Chartering
Director
Siem Offshore Inc.
Director
Chr.Th.Boe & Søn AS
Director
Stiftelsen
Institution
Sørlandets
Seilende
Skoleskibs
Current:
Organization
HR Director
&
Director
Siem Offshore Inc.
Sørlandet Shipping Association
Director
Sørlandsreklame AS
Terminated:
9.4
Senior
Vice
President HR &
Organization
TTS Energy, division of TTS Group ASA
Director
Kristiansand Chamber of Commerce
Benefits upon termination
There are no specific benefits upon termination of engagement for board members or
senior management.
9.5
Pension and retirement benefits
The Company has a defined benefit plan for its employees in Norway and its senior
management. The pension scheme is financed through contributions to insurance
companies or pension funds. A defined benefit plan defines the amount of pension benefit
that an employee will receive on retirement, usually dependent on one or more factors
such as age, years of service and compensation.
9.6
Loans and guarantees
Loans on December 31, 2014
Loans to senior management
Total
Amount
3,331
3,331
Interest
-
Comment
Share loan
The loans are repayable by the employee when the employee's shares in the Company
are realized or if the employee leaves the Company. The loans are secured by pledges in
relevant shares.
66
9.7
Audit committee
The following Directors are currently members of the Company’s audit committee:
•
John C. Wallace
•
Michael Delouche
The agenda for each audit committee meeting is pre-planned to ensure that each aspect
of the committee’s responsibilities is discharged as part of an annual cycle.
The main responsibilities of the audit committee are to:
•
monitor the integrity and clarity of the financial information and of the major
financial statements of the Company, and to review any significant financial
reporting issues and judgments those statements contain;
•
approve the annual external audit plan and to review with the external auditors the
nature, scope and results of their audit, and any control issues raised by them;
•
make recommendations as to the appointment, terms of engagement and
remuneration of the external auditors and review any question of their resignation
or removal, and to review the effectiveness of the external auditors and their
independence;
•
review the consistency of and any changes to accounting policies, the application of
appropriate accounting standards, and the methods used to account for significant
or unusual transactions;
•
review the Company’s internal controls and systems and practices for the
identification and management of risk; and
•
monitor compliance with the Company’s policies to prevent illegal and questionable
corporate conduct and to review arrangements for ‘whistle-blowing’.
The external auditors attend meetings of the committee, other than when their
appointment or performance is being reviewed, and the chief financial officer and
members of the finance function attend as appropriate. It is the intention of the
committee to meet with the auditors in the absence of management at least twice a year.
The external auditors are appointed annually at the annual general meeting. The Board
audit committee considers the reappointment of the auditors and reports its findings to
the Board. The Board audit committee periodically considers the performance, cost and
independence of the external auditors, including a comparison of audit fees with similar
trading companies and reviews the level of service provided by the audit team
throughout the Group.
9.8
Compensation Committee
The Compensation Committee consists of two Directors, Kristian Siem and Eystein
Eriksrud. The mandate of the committee is to review and approve the compensation of
the CEO and any bonuses to all executive personnel.
9.9
Conflicts of interests
The main shareholder of the Company, Siem Europe S.a r.l. is controlled by a trust where
certain members of Kristian Siem’s family are potential beneficiaries. Kristian Siem, who
is a member of the Board of the Company, is also inter alia the chairman of the board of
directors of Siem Industries Inc. and of Subsea 7 S.A., the charterer of the OSCV "Siem
Stingray". The contract between the Company and Subsea 7 S.A. is made on arms length
terms.
67
In September 2014 Siem Industries Inc., which is the beneficial owner of Siem Europe
S.a r.l., announced the acquisition of Flensburger Schiffbau-Gesellschaft mbH & Co. KG
which is building the two Well-Intervention Vessels under construction by the Company.
The contract between Flensburger Schiffbau-Gesellschaft mbH & Co. KG and the
Company is made on arm's length terms.
In November 2014, the Company provided a loan of EUR 15 million to Siem Industries
Inc. as part of the restructuring of Flensburger Schiffbau-Gesellschaft mbH & Co. KG. The
loan was provided to ensure delivery of the two Well-Intervention Vessels under
construction and shall be utilized to finance the yard. EUR 10 million of the funding of the
loan was provided by Helix Energy Solutions Group Inc. by way of prepayment of charter
hire for the two Well-Intervention Vessels. The loan is at market terms and matures
when the last of the two Well-Intervention Vessels have been delivered from the yard.
At the end of 2014 a short term loan of USD 60 million was drawn by the Company under
a credit facility provided by Siem Industries Inc. The short term loan is on market terms.
In June 2015, a short term loan of USD 15 million was provided by Siem Industries Inc.
to the Company. The short term loan is on market terms. The Company has currently not
drawn on the short term loan, and any undrawn portion of the USD 15 million
commitment will be cancelled, and any drawn amounts will mature, when the proceeds
from the Rights Offering has been received by the Company.
Except from the above, there are no potential conflicts of interest between the Directors
and members of managements’ duties to the Company and their private interests and
other duties.
9.10
Convictions for fraudulent offences, bankruptcy etc.
None of the members of the Board of Directors or the Management have during the last
five years preceding the date of this Prospectus:
•
any convictions in relation to indictable offences or convictions in relation to
fraudulent offences;
•
received any official public incrimination and/or sanctions by any statutory or
regulatory authorities (including designated professional bodies) or been
disqualified by a court from acting as a member of the administrative,
management or supervisory bodies of a company or from acting in the
management or conduct of the affairs of any company; or
•
been declared bankrupt or been associated with any bankruptcy, receivership or
liquidation in his/her capacity as a founder, director or senior manager of a
company or partner of a limited partnership.
9.11
Employees
9.11.1 Overview
As at the date of this Prospectus, the Company had a total of 876 employees.
68
The following table illustrates the number of employees as per the end of each calendar
year for 2014 and 2013 and 2012 split by the geographical areas.
Geographical area 2014
Norway
333
Germany
82
Holland
58
Brazil
552
Poland
9
Australia
1
Ghana
n.a
USA
3
India
0
Total
1,038
9.12
2013
468
66
54
514
4
1
n.a
3
0
1,110
2012
451
21
70
525
0
0
5
4
2
1,078
Corporate governance
The Company complies with the Corporate Governance Code. As a company incorporated
in the Cayman Islands, Siem Offshore Inc. is an exempted company duly incorporated
under the laws of the Cayman Islands and subject to Cayman Islands laws and
regulations with respect to corporate governance. Cayman Islands corporate law is to a
great extent based on English Law. In addition, due to the Company’s listing on the Oslo
Stock Exchange, certain aspects of Norwegian Securities law apply to the Company and
there is a requirement to adhere to the Corporate Governance Code. Due to new
provisions implemented in the Norwegian Accounting Act, compliance with the
regulations for corporate governance reporting is now a legal requirement provided that
it does not conflict with the Cayman Islands laws and regulations. The Company
endeavours to maintain high standards of corporate governance and is committed to
ensuring that all shareholders of the Company are treated equally and the same
information is communicated to all shareholders at the same time. Corporate governance
is subject to annual assessment and review by the Board of Directors.
Code of Conduct
It is the policy of the Company to conduct its business in accordance with all applicable
laws and regulations and in an ethically responsible manner.
The Company’s code of conduct guidelines applies to all directors, officers, hired staff,
temporary employees and employees of the Company.
It enables the Company to continue to operate ethically, honestly and to comply with
law.
The Company’s code of conduct guidelines sets out minimum required standards and it is
a line management responsibility to communicate and implement the Company’s code of
conduct guidelines and associated Siem Offshore policies.
The Company has a policy of zero tolerance for corruption and other illegal business
means, and will not accept that our people use improper influence on any individual or
entity. Due to the international nature of our business, we are subject to several anticorruption laws. Corruption is a threat to fair business, it undermines legitimate business
activities, and any violation within our organisation will be a threat to our reputation and
credibility in the market.
69
10.
CORPORATE INFORMATION
10.1
Incorporation and address
Siem Offshore Inc. is an exempted company limited by shares incorporated under the
laws of Cayman Islands with corporate registration no. 140468. The Company was
incorporated on 12 October 2004 under the name Siem Supply Inc. The Company’s
commercial name is Siem Offshore.
The Company and its activities are primarily governed by the Companies Law (2013
Revision) and the Company’s Memorandum and Articles of Association. Certain elements
of Norwegian securities law regulations will apply in addition, since the Company’s shares
are listed on the Oslo Stock Exchange.
The registered address of Siem Offshore Inc. is as follows:
Siem Offshore Inc.
PO Box 309
Ugland House
South Church Street
George Town
Grand Cayman KY1-1104
Cayman Islands
The Company maintains executive offices in the Cayman Islands at the following
address:
Siem Offshore Inc.
P.O.Box 10718
George Town
Cayman Islands
Telephone:
Telefax:
+ 1 345 949 1030
+ 1 345 946 3342
The Company’s headquarter and corporate management team is located at the following
address:
Nodeviga 14
4610 Kristiansand
Norway
10.2
Listing and registration
The Company's Shares are listed on the Oslo Stock Exchange and are trade under the
ticker symbol "SIOFF".
The Shares are registered in the Norwegian Central Securities Depository (VPS). The
Company's registrar is Nordea Bank Norge ASA, Oslo, Norway, Middelthunsgate 17, 0368
Oslo, Norway. The Shares carry the ISIN number KYG813131011.
10.3
Share capital and Share capital history
The authorized share capital of the Company is USD 5,500,000 divided into 550,000,000
shares of a nominal value of USD 0.01 each.
70
The issued share capital of the Company as of the date of this Prospectus is USD
3,875,913.80 divided into 387,591,380 Shares each with a nominal value of USD 0.01.
All the Shares are validly issued and fully paid.
On 16 July 2015, the Company called for an extraordinary general meeting to be held on
14 August 2015 in order to increase the Company's authorised share capital from USD
5,500,000 to USD 10,000,000 by the creation of an additional 450,000,000 Shares. The
increase in share capital is meant to facilitate the Rights Offering.
Following the Rights Offering, the issued share capital will be USD 8,420,213,80 divided
into 842,021,380 Shares.
There has not been any development in the Company's issued share capital for the
periods covered by the historical financial information included in the Prospectus as
Appendix B.
10.4
Own shares
As of the date of this Prospectus, the Company does not own any Shares.
10.5
Shareholder agreements
The Company is not aware of any shareholders' agreements in relation to the Shares.
10.6
Outstanding authorizations
The Board of Siem Offshore currently holds authorization to issue 612,408,620 new
Shares in the Company. Following the Rights Offering, the Board will be authorised to
issue 157,978,620 new Shares in the Company.
10.7
Convertible instruments, warrants and share options
On the 13 January 2013, the Company entered into a Share option agreement with
selected employees.
The Board of Directors of Siem Offshore Inc. has authorized the award of 14,000,000
share options to eight key employees of the Company. The exercise price is NOK 8.45
per share.
The exercise price of the granted options is equal to the market price of the shares on
the date of the grant.
The Options can be exercised as follows:
2014: 20% of the total number beginning on January 18th 2014.
2015: 40% of the total number beginning on January 18th 2015, less any options
previously issued.
previously issued.
previously issued.
2018: 100% of the total number beginning on June 18th 2018, less any options
previously issued.
71
The exercise period shall in no event be later than the date falling 10 years after the
award date.
The group has no legal or constructive obligation to repurchase or settle the
options in cash.
No options were exercised during 2013 or 2014.
On 2 April 2014, the Company entered into a second Share option agreement with
selected employees. The Board of Directors has authorized the award of 3,000,000 share
options to ten key employees of the Company. The exercise price is NOK 9.07 per share.
The exercise price of the granted options is equal to the market price of the shares on
the date of the grant.
2017:
60% of the total number beginning on 2 April 2017, less any options previously issued.
2018:
2019:
The exercise period shall in no event be later than the date falling 10 years after the
award date.
Except as set out above, neither the Company nor any of its subsidiaries has issued any
options, warrants, convertible loans or other instruments that would entitle a holder of
any such instrument to subscribe for any shares in the Company or its subsidiaries.
Further, neither the Company nor any of its subsidiaries has issued subordinated debt or
transferable securities other than the Shares and the shares in its subsidiaries which will
be held, directly or indirectly, by the Company.
10.8
Dividend policy
The priorities for the use of Company funds are determined by the Board of Directors and
recommendations of Management influenced by existing conditions. At present, priorities
for use of funds in order of importance are repayment of debt, investment opportunities
in the business, and the return of capital to the shareholders in form of share buy-back
or dividends.
The Company paid out NOK 0.10 per Share (approximately NOK 38.8 million in total) in
respect of 2013.
10.9
Shareholders
The table below sets out the top 20 shareholders registered in the VPS as of 11 August
2015:
Number of
Share %
Name of Shareholder
shares
133 279 421
34.39 SIEM EUROPE S.A R.L
76 780 808
35 211 458
Account
LUX
19.81 Ace Crown Internatio C/O SINGA STAR PTE L
9.08
Nationality
EUROCLEAR BANK S.A./25% CLIENTS
VGB
NOM
BEL
8 510 767
2.20 WATERMAN HOLDING LTD
GBR
8 036 317
2.07 SKAGEN VEKST
NOR
72
Number of
Share %
Name of Shareholder
shares
7 959 178
2.05 FONDSFINANS NORGE
Account
Nationality
NOR
5 415 687
1.40 MP PENSJON PK
NOR
5 313 000
1.37 OJADA AS
NOR
3 951 600
FIN
3 727 644
1.02 NORDEA BANK FINLAND EGENHANDELSKONTO
PROPRIETARY SECURITI
0.96 Merrill Lynch,Pierce S/A MLPF & S HOLD
3 366 602
0.87 FONDSAVANSE AS
NOR
3 253 700
0.84 EGD CAPITAL AS
NOR
3 142 574
0.81 PUMPØS A/S
NOR
3 123 151
0.81 Alta Invest SA
PAN
2 850 000
0.74 BERGEN KOMMUNALE PEN
NOR
2 550 000
0.66 ROVDEFRAKT AS
NOR
2 422 023
0.62 KLP AKSJE NORGE VPF
NOR
2 376 000
0.61 DnB NOR MARKETS, AKS DNB Bank ASA
NOR
2 269 897
0.59 MUST INVEST AS
NOR
2 082 966
0.54 FR FALCK FRÅS AS
NOR
NOM
USA
Siem Europe S.a r.l. currently owns 133,279,421 shares in the Company, equal to 34.4%
of the issued Shares. Siem Europe S.a r.l. is the main shareholder of Siem Offshore Inc.
and is controlled by a trust whose potential beneficiaries include members of Kristian
Siem’s immediate family. Kristian Siem is a Board Member of the Company.
Siem Europe S.a r.l. has underwritten the Rights Offering as further described in Section
13.20, "The Rights Offering—The Underwriting". If as a result of the underwriting, Siem
Europe’s ownership interest is increased above its current ownership interest and such
new ownership interest is not reduced by the sale of Shares down to or below the level of
the current ownership interest within four weeks, then Siem Europe S.a r.l. will be
required to make a mandatory offer for all Shares in accordance with existing regulations
described in Section 11.8 "Securities trading in Norway—Mandatory offer requirements".
The Company is not aware of any other agreements that at a later stage may lead to
change of control of the Company.
In addition to Siem Europe S.a r.l., Ace Crown International and Euroclear Bank S.A., as
nominee, holds more than 5% of the issued Shares in the Company with ownership
interests of 19.81% and 9.08% respectively.
Shareholders with ownership exceeding 5% must comply with disclosure obligations
according to the Norwegian Securities Trading Act section 4-3. For more detailed
description please see section 11.7 "Securities trading in Norway—Disclosure
obligations".
10.10 The Articles of Association and certain aspects of Cayman Islands law
The Company is an exempted company incorporated with limited liability in the Cayman
Islands. This means that the Company may not trade in the Cayman Islands with any
person, firm or corporation, except in furtherance of the business of the Company carried
on outside of the Cayman Islands.
The Company and its activities are primarily governed by the Companies Law (2013
Revision), the Company's memorandum of association and the Articles of Association. As
the Company is listed on the Oslo Stock Exchange, certain aspects of its activities are
governed by Norwegian law.
The constitutional documents of the Company consist of the Company's memorandum of
association and the Articles of Association. The Articles of Association are significantly
more extensive than the articles of association of a Norwegian company. The Articles of
73
Association deal primarily with the Company's administration, internal regulation and the
distribution of rights and authorities between the shareholders and the directors.
74
Company objective
Pursuant to section 3 of the Company's memorandum of association, the objective of the
Company is unrestricted and the Company shall have full power to carry out any
objective not prohibited by law.
General Meeting
Under Cayman Islands law, there is no requirement to hold an annual general meeting.
However, pursuant to the Articles of Association, the Company shall hold annual General
Meetings each year. Any annual General Meeting shall be held at the time and place as
decided by the board of directors.
All General Meetings other than annual General Meetings shall be called extraordinary
General Meetings.
The annual General Meeting shall be called by the board of directors. Additionally, the
Board of Directors shall, on the requisition of a shareholder or shareholders’ holding in
aggregate no less than 10% of the issued Shares which as at that date carry the right to
vote at the General Meeting, forthwith proceed to convene an extraordinary General
Meeting.
A General Meeting shall be called by not less than 14 clear days notice in writing, except
when consent to a shorter period is given in accordance with the provisions set out in the
Articles of Association. The notice shall specify the time, place, and agenda of the
meeting, particulars of the resolutions to be considered at the meeting and the general
nature of that business to be conducted at the General Meeting. The notice convening a
General Meeting to pass a special resolution shall specify the intention to propose the
resolution as a special resolution.
For all purposes a quorum for a General Meeting is constituted by one or more members
present in person holding not less than one third of the issued shares of the Company.
A resolution of a General Meeting is adopted by ordinary resolution unless the Companies
Law (2013 Revision) or the Articles of Association specify otherwise.
"Ordinary resolution" means a resolution passed by a simple majority of the shareholders
as, being entitled to do so, vote in person or by proxy, at a General Meeting, and
includes a unanimous written resolution. In computing the majority when a poll is
demanded regard shall be had to the number of votes to which each member is entitled
by the Articles of Association.
"Special Resolution" means a resolution passed by a majority of at least two thirds of the
shareholders as, being entitled to do so, vote in person or by proxy, at a General
Meeting.
Each of the Shares represents one vote on a poll in a General Meeting. Shareholders may
be represented in person or by proxy.
In the case of an equality of votes the chairman of the meeting shall be entitled to a
second or casting vote.
Amendments of the Articles of Association
Subject to the provisions of the Companies Law (2013 Revision) and the provisions of the
Articles of Association as regards the matters to be dealt with by ordinary resolution, the
Articles of Association may be amended by the passing of a special resolution.
75
Equity and share capital increases
The Companies Law, the Company's memorandum of association and the Articles of
Association draws a distinction between authorised and issued share capital.
The Company’ authorised share capital dictates the maximum number of shares which
the Company is authorised to issue and such information is set out in the Articles of
Association. The authorised share capital of the Company may be increased by the
passing of an ordinary resolution at the General Meeting. The Board of Directors may
allot, issue, grant options over or otherwise dispose of shares to such persons, at such
times and on such other terms as they think proper (subject to the Companies Law
(2013 Revision) and the Articles of Association) without any further consent or approval
by the shareholders.
Shareholders in the Company do not have pre-emptive rights in later capital increases.
Capital reductions
A reduction of the share capital is subject to the passing of a special resolution at the
General Meeting. The same majority is required for a reduction of the Company’s capital
redemption reserve fund.
Classes of shares
The Shares are currently not divided into different classes. However, the Articles of
Association establish a right to divide the share capital into different classes of shares
with varied rights attaching to the shares of such different classes. According to the
Articles of Association, modifications in the rights attached to the Shares, such as
dividing the shares into different classes of shares with different rights attached, require
the written consent of at least 2/3 of the holders of the issued shares of that class or the
passing of a resolution passed by a majority of not less than two thirds of the votes cast
at a separate meeting of the holders of the shares of the applicable class.
Purchase of shares
Subject to the Companies Law (2013 Revision), to relevant regulations of any securities
exchange or other system on which the shares of the Company may be listed or
otherwise authorised for trading (an, "Exchange"), and to any rights conferred on the
holders of any class of shares, the Company has the power:
(i)
to purchase or otherwise acquire any of its own shares, provided either:
(a)
the manner of purchase has first been authorised by the Company
in general meeting;
(b)
such purchases are made in open market transactions on an
Exchange;
(c)
such purchases may be effected from time to time, as authorised
by the Company in general meeting, at a price per share no higher
than the average of the closing prices of said shares on an
Exchange, for the five days on which said shares are traded
immediately preceding any such purchase (the “Average Market
Price”);
(d)
such purchases may be effected from time to time, as authorised
76
by the Company in general meeting at a price per share in excess
of the Average Market Price, provided that: the shares to be
purchased shall be in blocks consisting of a number equal to or
greater than five per cent. of the number of shares then
outstanding and the price to be paid therefore shall have been
found to be fair in a written opinion of independent investment
bankers who have been selected for the purpose by a disinterested
committee of Directors; or
(e)
an offer is made to all shareholders of the Company to purchase a
specified number of shares at a specified price, all tenders of
shares made in response to such offer to be accepted pro rata in
the event that more shares are to be tendered than the Company
has offered to purchase, except that all tenders of 99 shares or
less may be accepted in full at the discretion of the Directors,
provided that, the Company shall not, in any 12 month period, purchase
in aggregate more than such number of shares as shall be equal to 10 per
cent. of the lowest number of shares in issue during such period except to
the extent authorised by special resolution;
(ii)
to purchase or otherwise acquire warrants for the subscription or
purchase of its own shares; and
(iii)
to give, directly or indirectly, by means of a loan, a guarantee, a gift, an
indemnity, the provision of security or otherwise howsoever, financial
assistance for the purpose of or in connection with a purchase or other
acquisition made or to be made by any person of any shares or warrants in
the Company. The Company may pay for such shares or warrants in any
manner authorised or not prohibited by law, including out of capital.
Should the Company purchase or otherwise acquire its own shares or
warrants, neither the Company nor the Board shall be required to select
the shares or warrants to be purchased or otherwise acquired rateably or in
any other manner as between the holders of shares or warrants of the
same class or as between them and the holders of shares or warrants of
any other class or in accordance with the rights as to dividends or capital
conferred by any class of shares.
Transfer of shares
The Shares are generally freely transferable and there are no restrictions on trading in
the Shares. The Shares are registered in the VPS, and are tradable in the same manner
as other VPS registered shares.
The Board of Directors may, however, in its absolute discretion, refuse to register a
transfer of any shares which are not fully paid up or on which the Company has a lien. In
accordance with the Articles of Association, the board of directors shall decline to register
the transfer of any share to a person where the board of directors is of the opinion that
such transfer might breach any law or requirement of any authority or any approved
stock exchange until it has received such evidence as it may require satisfying itself that
no such breach would occur.
Dividends
Subject to the Companies Law (2013 Revision) and the Articles of Association, the Board
of Directors may declare dividends and distributions on the Company’s issued Shares and
authorise payment of the same out of the funds which are lawfully available. Dividends or
77
distributions are payable only out of the profits, realised or unrealised, or out of the
share premium account or as otherwise permitted by law. Each of the Shares carries
equal rights to dividend and equal rights to any surplus in the event of liquidation. The
Shares will be eligible for any dividends being declared and paid immediately upon the
share issue. A Share will be deemed to be issued at the time that the Company's register
of shareholders is updated to reflect such issue and the details of the applicable
shareholder.
The Articles of Association provide that the Company may deduct from any dividend or
distribution payable to any shareholder all sums of money (if any) presently payable by
him to the Company on account of calls or otherwise.
The Companies Law (2013 Revision) and the Articles of Association do not provide for
any time limit after which entitlement to dividends lapses. Subject to various exceptions,
Cayman Islands law provides a limitation period of three years from the date on which an
obligation is due.
Any future payments of dividends on the Shares will be denominated in NOK, and will be
paid to the shareholders through the VPS.
Board of directors
According to the Articles of Association, the Board of Directors shall consist of not less
than three or more than seven persons (exclusive of alternate directors). The Company
may, by ordinary resolution, increase or reduce the limits in the number of directors and
may appoint and remove any director from the Board of Directors.
A resolution in writing (in one or more counterparts) signed by each and every one of the
Directors or all the members of a committee of the Directors shall be as valid and
effectual as if it had been passed at a meeting of the Directors, or committee of Directors
as the case may be, duly convened and held.
The powers of the Board of Directors
Subject to limitations in the Companies Law (2013 Revision), the Articles of Association
and any direction given by special resolution by the General Meeting, the business of the
Company shall be managed by the board of directors who may exercise all the powers of
the Company.
A duly convened meeting of the Board of Directors at which a quorum is presented may
exercise all powers exercisable by the Board of Directors. The Board of Directors has full
power to charge any of the Company’ assets and to borrow money without any sanction
by the members at a General Meeting.
The Board of Directors may, by power of attorney or otherwise, appoint a company, firm,
person or body of persons to be the attorney or authorised signatory of the Company for
such purposes and with such powers, authorities and discretions as the Board of
Directors thinks fit, provided however that this does not exceed the powers vested in the
Board of Directors by the Articles of Association. The Board of Directors may also
authorise any attorney or authorised signatory to sub-delegate any or all powers,
authorities and discretions vested in him.
Furthermore, the Board of Directors may delegate any of its powers, authorities and
discretions, including the power to sub-delegate, to any committees consisting of one or
more directors. Every committee so formed shall conform to any regulations that may
from time to time be imposed upon it by the Board of Directors.
78
Directors’ interests
A Director may be engaged by the Company for the purpose of performing services which
go beyond his ordinary duties as a director, but he may not be the auditor of the
Company. The director performing such services for the Company is entitled to such
extra remuneration as the board of directors may decide.
A Director or a company owned by him may also enter into commercial agreements with
the Company provided that the relevant Director declares his interest in such contract at
the board meeting where the contract is first considered. Subject to the provisions of the
Articles of Association, a Director (or his alternate director in his absence) shall be at
liberty to vote in respect of any contract or transaction in which he is interested provided
that the nature of the interest of any director or alternate director in any such contract or
transaction shall be disclosed by him at or prior to its consideration and any vote
thereon.
Members of the administrative, management and supervisory bodies
The management of the business of the Company is vested in the Board of Directors,
whom may establish any committees or any person to be manager or agent for the
Company’ affairs. Furthermore, the Board of Directors may appoint a secretary for such
term, at such remuneration and upon such conditions as it may think fit, and any
secretary so appointed may be removed by the Board of Directors.
Annual accounts
According to the Articles of Association, the financial year shall end on 31 December and
begin on 1 January in each year, unless otherwise prescribed by the Board of Directors.
The auditor shall audit the profit and loss account and the balance sheet of the Company
and shall prepare a report which shall be laid before the shareholders at the annual
General Meeting each year. The auditor’s report shall be open for inspection by any
shareholder.
Winding up
According to the Articles of Association, in case of a liquidation of the Company the
following shall apply; (i) if the assets available for distribution amongst the members
shall be insufficient to repay whole of the Company’ issued share capital, such assets
shall be distributed so that, as nearly as may be, the losses shall be borne by the
members in proportion to the par value of the shares held by them, and (ii) if the assets
available for distribution amongst the members shall be more than sufficient to repay the
whole of the Company’ issued share capital at the commencement of the liquidation, the
surplus shall be distributed amongst the members in portion to the par value of the
shares held by them subject to a deduction from those shares in respect of which there
are monies due, of all monies payable to the Company for unpaid calls or otherwise.
10.11 Compulsory acquisition
Schemes of Arrangement
The Companies Law (2013 Revision) of the Cayman Islands allow for schemes of
arrangement. A scheme of arrangement is a flexible form of corporate restructuring and
involves a range of transactions aimed to reorganise Cayman Islands companies. The
schemes may be effected by a court-supervised scheme if an amalgamation or
reconstruction is required or schemes of arrangement can be put in place either
between a company and its shareholders in various forms, including takeovers, spin-offs,
amalgamations, mergers, de-mergers, re-domicilings, restating net asset values, demutualisations, and/or between a company and its creditors, also in various forms such
as debt-for-debt, debt-for-equity and debt-for-assets swaps, and the re-organisations of
79
options and warrants.
A scheme is a collective procedure. It operates both as a contract and a court order and
has statutory effect. Provided the necessary majorities are obtained, the terms of a
scheme become binding on all members of shareholders/creditors of the company,
whether or not they (i) received notice of the scheme; (ii) voted at the meeting; (iii)
voted for or against the scheme; and (iv) changed their minds afterwards. The range of
possible objections that can be raised is very narrow. Dissenting shareholders have no
statutory rights in any scheme, however, if such rights are thought desirable then the
terms of the scheme itself may make such provision. The required majority is a supermajority of each class of members voting at the meeting (present in person or by proxy)
being: 50% + one in number (i.e. a headcount vote); and 75% in value (i.e. the number
of shares voted).
Power to acquire shares
In accordance with the Companies Law (2013 Revision), where a scheme or contract
involving the transfer of shares or any class of shares in a company (in this section
referred to as "the transferor company") to another company, whether a company within
the meaning of the Companies Law (2013 Revision) or not (in this section referred to as
"the transferee company") has, within four months after the making of the offer in that
behalf by the transferee company, been approved by the holders of not less than 90% in
value of the shares affected, the transferee company may, at any time within two
months after the expiration of the said four months, give notice in the prescribed manner
to any dissenting shareholder that it desires to acquire his shares, and where such notice
is given the transferee company shall, unless on an application made by the dissenting
shareholder within one month from the date on which the notice was given, the court
thinks fit to order otherwise, be entitled and bound to acquire those shares on the terms
on which under the scheme or contract the shares of the approving shareholders are to
be transferred to the transferee company.
Where a notice has been given by the transferee company and the Grand Court of the
Cayman Islands has not, on an application made by the dissenting shareholder, ordered
to the contrary, the transferee company shall, on the expiration of one month from the
date on which the notice has been given or, if an application to the Grand Court of the
Cayman Islands by the dissenting shareholder is then pending, after that application has
been disposed of, transmit a copy of the notice to the transferor company and pay or
transfer to the transferor company the amount or other consideration representing the
price payable by the transferee company for the shares which that company is entitled to
acquire, and the transferor company shall thereupon register the transferee company as
the holder of those shares.
80
11.
SECURITIES TRADING IN NORWAY
This Section 11 includes certain aspects of rules pertaining to securities trading in
Norway in a Norwegian incorporated company pursuant to Norwegian legislation, but is
however not a full or complete description of the matters described herein. The following
summary does not purport to be a comprehensive description of all the legal
considerations that may be relevant to a decision to purchase, own or dispose of Shares.
Investors are advised to consult their own legal advisors concerning the overall legal
consequences of their ownership of Shares.
11.1
Introduction
Oslo Børs was established in 1819 and is the principal market in which shares, bonds and
other financial instruments are traded in Norway. Oslo Børs is operated by Oslo Børs
ASA, which also operates the regulated marketplace Oslo Axess.
Oslo Børs has entered into a strategic cooperation with the London Stock Exchange group
with regards to, inter alia, trading systems for equities, fixed income and derivatives.
11.2
Trading and settlement
Trading of equities on Oslo Børs is carried out in the electronic trading system Millenium
Exchange. This trading system was developed by the London Stock Exchange and is in
use by all markets operated by the London Stock Exchange as well as by the Borsa
Italiana and the Johannesburg Stock Exchange.
Official trading on Oslo Børs takes place between 09:00 hours (CET) and 16:20 hours
(CET) each trading day, with pre-trade period between 08:15 hours (CET) and 09:00
hours (CET), closing auction from 16:20 hours (CET) to 16:25 hours (CET) and a posttrade period from 16:25 hours (CET) to 17:30 hours (CET). Reporting of after exchange
trades can be done until 17:30 hours (CET).
The settlement period for trading on Oslo Børs is two trading days (T+2). This means
that securities will be settled on the investor’s account in the VPS two days after the
transaction, and that the seller will receive payment after two days.
Oslo Clearing ASA, a wholly-owned subsidiary SIX x-clear Ltd, a company in the Six
Group, has a license from the Norwegian FSA to act as a central clearing service, and has
from 18 June 2010 offered clearing and counterparty services for equity trading on Oslo
Børs.
Investment services in Norway may only be provided by Norwegian investment firms
holding a license under the Norwegian Securities Trading Act, branches of investment
firms from an EEA member state or investment firms from outside the EEA that have
been licensed to operate in Norway. Investment firms in an EEA member state may also
provide cross-border investment services into Norway.
It is possible for investment firms to undertake market-making activities in shares listed
in Norway if they have a license to this effect under the Norwegian Securities Trading
Act, or in the case of investment firms in an EEA member state, a license to carry out
market-making activities in their home jurisdiction. Such market-making activities will be
governed by the regulations of the Norwegian Securities Trading Act relating to brokers'
trading for their own account. However, market-making activities do not as such require
notification to the Norwegian FSA or Oslo Børs except for the general obligation of
investment firms being members of Oslo Børs to report all trades in stock exchange listed
securities.
81
11.3
Information, control and surveillance
Under Norwegian law, Oslo Børs is required to perform a number of surveillance and
control functions. The Surveillance and Corporate Control unit of Oslo Børs monitors
market activity on a continuous basis. Market surveillance systems are largely
automated, promptly warning department personnel of abnormal market developments.
The Norwegian FSA controls the issuance of securities in both the equity and bond
markets in Norway and evaluates whether the issuance documentation contains the
required information and whether it would otherwise be unlawful to carry out the
issuance. Under Norwegian law, a company that is listed on a Norwegian regulated
market, or has applied for listing on such market, must promptly release any inside
information directly concerning the company (i.e. precise information about financial
instruments, the issuer thereof or other matters which are likely to have a significant
effect on the price of the relevant financial instruments or related financial instruments,
and which are not publicly available or commonly known in the market). A company may,
however, delay the release of such information in order not to prejudice its legitimate
interests, provided that it is able to ensure the confidentiality of the information and that
the delayed release would not be likely to mislead the public. Oslo Børs may levy fines on
companies violating these requirements.
11.4
The VPS and transfer of Shares
The Company's shareholder register is operated through the VPS. The VPS is the
Norwegian paperless centralised securities register. It is a computerised bookkeeping
system in which the ownership of, and all transactions relating to, Norwegian listed
shares must be recorded. All transactions relating to securities registered with the VPS
are made through computerised book entries. No physical share certificates are, or may
be, issued. The VPS confirms each entry by sending a transcript to the registered
shareholder irrespective of any beneficial ownership. To give effect to such entries, the
individual shareholder must establish a share account with a Norwegian account agent.
Norwegian banks, authorised securities brokers in Norway and Norwegian branches of
credit institutions established within the EEA are allowed to act as account agents.
The entry of a transaction in the VPS is generally prima facie evidence in determining the
legal rights of parties as against the issuing company or any third party claiming an
interest in the given security.
The VPS is liable for any loss suffered as a result of faulty registration or an amendment
to, or deletion of, rights in respect of registered securities unless the error is caused by
matters outside the VPS’ control which the VPS could not reasonably be expected to
avoid or overcome the consequences of. Damages payable by the VPS may, however, be
reduced in the event of contributory negligence by the aggrieved party.
The VPS must provide information to the Norwegian FSA on an on-going basis, as well as
any information that the Norwegian FSA requests. Further, Norwegian tax authorities
may require certain information from the VPS regarding any individual’s holdings of
securities, including information about dividends and interest payments.
11.5
Foreign investment in shares listed in Norway
Foreign investors may trade shares listed on Oslo Børs through any broker that is a
member of Oslo Børs, whether Norwegian or foreign.
11.6
Disclosure obligations
If a person's, entity's or consolidated group's proportion of the total issued shares and/or
rights to shares in an issuer with its shares listed on a regulated market in Norway (with
Norway as its home state, which will be the case for the Company) reaches, exceeds or
82
falls below the respective thresholds of 5%, 10%, 15%, 20%, 25%, 1/3, 50%, 2/3 or
90% of the share capital or the voting rights of that issuer, the person, entity or group in
question has an obligation under the Norwegian Securities Trading Act to notify Oslo Børs
and the issuer immediately. The same applies if the disclosure thresholds are passed due
to other circumstances, such as a change in the Company's share capital.
11.7
Insider trading
According to Norwegian law, subscription for, purchase, sale or exchange of financial
instruments that are listed, or subject to the application for listing, on a Norwegian
regulated market, or incitement to such dispositions, must not be undertaken by anyone
who has inside information, as defined in section 3-2 of the Norwegian Securities Trading
Act. The same applies to the entry into, purchase, sale or exchange of options or
futures/forward contracts or equivalent rights whose value is connected to such financial
instruments or incitement to such dispositions.
11.8
Mandatory offer requirement
The Norwegian Securities Trading Act requires any person, entity or consolidated group
that becomes the owner of shares representing more than one-third of the voting rights
of a Norwegian issuer with its shares listed on a Norwegian regulated market to, within
four weeks, make an unconditional general offer for the purchase of the remaining shares
in that issuer. A mandatory offer obligation may also be triggered where a party acquires
the right to become the owner of shares that, together with the party's own
shareholding, represent more than one-third of the voting rights in the issuer and Oslo
Børs decides that this is regarded as an effective acquisition of the shares in question.
The mandatory offer obligation ceases to apply if the person, entity or consolidated group
sells the portion of the shares that exceeds the relevant threshold within four weeks of
the date on which the mandatory offer obligation was triggered.
When a mandatory offer obligation is triggered, the person subject to the obligation is
required to immediately notify Oslo Børs and the issuer in question accordingly. The
notification is required to state whether an offer will be made to acquire the remaining
shares in the issuer or whether a sale will take place. As a rule, a notification to the effect
that an offer will be made cannot be retracted. The offer is subject to approval by Oslo
Børs before the offer is submitted to the shareholders or made public.
The offer price per share must be at least as high as the highest price paid or agreed to
be paid by the offeror for the shares in the six-month period prior to the date the
threshold was exceeded. If the acquirer acquires or agrees to acquire additional shares at
a higher price prior to the expiration of the mandatory offer period, the acquirer is
required to restate its offer at such higher price. A mandatory offer must be in cash or
contain a cash alternative at least equivalent to any other consideration offered.
In case of failure to make a mandatory offer or to sell the portion of the shares that
exceeds the relevant mandatory offer threshold within four weeks, Oslo Børs may force
the acquirer to sell the shares exceeding the threshold by public auction. Moreover, a
shareholder who fails to make an offer may not, as long as the mandatory offer
obligation remains in unfulfilled, exercise rights in the issuer, such as voting on shares at
general meetings of the issuer's shareholders, without the consent of a majority of the
remaining shareholders. The shareholder may, however, exercise its rights to dividends
and pre-emption rights in the event of a share capital increase. If the shareholder
neglects his duty to make a mandatory offer, Oslo Børs may impose a cumulative daily
fine that accrues until the circumstance has been rectified.
Any person, entity or consolidated group that owns shares representing more than onethird of the votes in a Norwegian issuer with its shares listed on a Norwegian regulated
83
market is required to make an offer to purchase the remaining shares of the issuer
(repeated offer obligation) if the person, entity or consolidated group through acquisition
becomes the owner of shares representing 40% or more of the votes in the issuer. The
same applies correspondingly if the person, entity or consolidated group through
acquisition becomes the owner of shares representing 50% or more of the votes in the
issuer. The mandatory offer obligation ceases to apply if the person, entity or
consolidated group sells the portion of the shares which exceeds the relevant threshold
within four weeks of the date on which the mandatory offer obligation was triggered.
Any person, entity or consolidated group that has passed any of the above mentioned
thresholds in such a way as not to trigger the mandatory bid obligation, and has
therefore not previously made an offer for the remaining shares in the company in
accordance with the mandatory offer rules is, as a main rule, required to make a
mandatory offer in the event of a subsequent acquisition of shares in the company.
11.9
Foreign exchange controls
There are currently no foreign exchange control restrictions in Norway that would
potentially restrict the payment of dividends to a shareholder outside Norway, and there
are currently no restrictions that would affect the right of shareholders of a Norwegian
issuer who are not residents in Norway to dispose of their shares and receive the
proceeds from a disposal outside Norway. There is no maximum transferable amount
either to or from Norway, although transferring banks are required to submit reports on
foreign currency exchange transactions into and out of Norway into a central data
register maintained by the Norwegian customs and excise authorities. The Norwegian
police, tax authorities, customs and excise authorities, the National Insurance
Administration and the Norwegian FSA have electronic access to the data in this register.
84
12.
TAXATION
The following is a summary of certain Norwegian tax considerations relevant to the
acquisition, ownership and disposition of shares by holders that are residents of Norway
for purposes of Norwegian taxation ("Resident Shareholders") and holders that are not
residents of Norway for such purposes ("Non-resident Shareholders").
The summary is based on applicable Norwegian laws, rules and regulations as they exist
as at the date of this Prospectus. Such laws, rules and regulations may be subject to
changes after this date, possibly on a retroactive basis for the same tax year. The
summary is of a general nature and does not purport to be a comprehensive description
of all the tax considerations that may be relevant to the Shareholders and does not
address foreign tax laws.
Please note that special rules apply for shareholders that cease to be tax resident in
Norway or that for some reason are no longer considered taxable to Norway in relation to
their shareholding.
Each Shareholder should consult with and rely upon their own tax advisor to determine
the particular tax consequences for him or her and the applicability and effect of any
Norwegian or foreign tax laws and possible changes in such laws.
For the purpose of the summary below, a reference to a Norwegian or foreign
shareholder or company refers to tax residency rather than nationality.
12.1
Taxation of dividends
12.1.1 Resident corporate Shareholders
Norwegian corporate shareholders (i.e. limited liability companies, mutual funds, savings
banks, mutual insurance companies or similar entities resident in Norway for tax
purposes) are generally exempt from tax on dividends received on shares in Norwegian
limited liability companies, pursuant to the participation exemption (Norwegian:
Fritaksmetoden). However, 3% of dividend income is generally deemed taxable as
general income at a flat rate of 27%, implying that dividends distributed from the
Company to resident corporate Shareholders are effectively taxed at a rate of 0.81%.
12.1.2 Resident personal Shareholders
Personal shareholders tax resident in Norway are in general tax liable to Norway for their
worldwide income. Dividends distributed to personal Shareholders who are individuals
resident in Norway for tax purposes, are taxed as ordinary income at a flat rate of 27%
to the extent the dividends exceed a statutory tax-free allowance (Norwegian:
Skjermingsfradrag).
The allowance is calculated on a share-by-share basis, and the allowance for each share
is equal the cost price of the share multiplied by a determined risk-free interest rate
based on the effective rate after tax of interest on treasury bills (Norwegian:
"Statskasseveksler") with three months maturity. The allowance is allocated to the
Shareholder owning the share on 31 December in the relevant income year. Norwegian
personal shareholders who transfer shares during an income year will thus not be entitled
to deduct any calculated allowance related to the year of transfer. The Directorate of
Taxes announces the risk free-interest rate in January the year after the income. The
risk-free interest rate for 2014, was 0.9%.
Any part of the calculated allowance one year exceeding dividend distributed on the same
share ("excess allowance") can be carried forward and set off against future dividends
received on, or capital gains upon realization of the same share. Furthermore, excess
allowance can be added to the cost price of the share and included in basis for calculating
85
the allowance on the same share the following year.
12.1.3 Non-resident Shareholders
Dividends distributed to Shareholders not resident in Norway for tax purposes are in
general subject to withholding tax at a rate of 25%, unless otherwise provided for in an
applicable tax treaty or the recipient is covered by the specific regulations for corporate
shareholders tax-resident within the EEA (ref. the section below for more information on
the EEA exemption). The company distributing the dividend is responsible for the
withholding. Norway has entered into tax treaties with approximate 80 countries. In most
tax treaties the withholding tax rate is reduced to 15%.
In accordance with the present administrative system in Norway, the Norwegian
distributing company will normally withhold tax at the regular rate or reduced rate
according to an applicable tax treaty, based on the information registered with the VPS
with regard to the tax residence of the Non-resident Shareholder. Dividends paid to Nonresident Shareholders in respect of nominee- registered shares will be subject to
withholding tax at the general rate of 25% unless the nominee, by agreeing to provide
certain information regarding beneficial owners, has obtained approval for a reduced or
zero rate from the Central Office for Foreign Tax Affairs ("COFTA") (Norwegian:
Sentralskattekontoret for utenlandssaker).
Non-resident Shareholders who are exempt from withholding tax and Shareholders who
have been subject to a higher withholding tax than applicable in the relevant tax treaty,
may apply to the Norwegian tax authorities for a refund of the excess withholding tax.
The application is to be filed with COFTA.
If a Foreign Shareholder is engaged in business activities in Norway, and the shares are
effectively connected with such business activities, dividends distributed to such
shareholder will generally be subject to the same taxation as that of Norwegian
Shareholders, cf. the description of tax issues related to Resident Shareholders above.
Non-resident Shareholders should consult their own advisers regarding the availability of
treaty benefits in respect of dividend payments, including the ability to effectively claim
refunds of withholding tax.
12.1.4 Non-resident Shareholders tax-resident within the EEA
Non-resident Shareholders who are individuals tax-resident within the EEA ("Foreign
EEA Personal Shareholders") are upon request entitled to a deductible allowance. The
shareholder shall pay the lesser amount of (i) withholding tax according to the rate in an
applicable tax treaty or (ii) withholding tax at 25% of taxable dividends after allowance.
Foreign EEA Personal Shareholders may carry forward any unused allowance, if the
allowance exceeds the dividends.
Foreign Shareholders that are corporations tax-resident within the EEA for tax purposes
("Foreign EEA Corporate Shareholders") are exempt from Norwegian tax on
dividends distributed from Norwegian limited liability companies, provided that the
Foreign EEA Corporate Shareholder in fact is genuinely established within the EEA and
performs real economic activity within the EEA.
12.2
Taxation upon realization of shares
12.2.1 Resident corporate Shareholders
Norwegian corporate Shareholders are generally exempt from tax on capital gains upon
the realization of shares in Norwegian limited liability companies. Losses upon the
realization and costs incurred in connection with the purchase and realization of such
shares are not deductible for tax purposes.
86
12.2.2 Resident personal Shareholders
Norwegian individual shareholders are taxable in Norway for capital gains upon the
realization of shares, and have a corresponding right to deduct losses that arise upon
such realization. The tax liability applies irrespective of time of ownership and the
number of shares realised. Gains are taxable as general income in the year of realization,
and losses can be deducted from general income in the year of realization. The tax rate
for general income is currently 27%.
The taxable gain or loss is calculated per share as the difference between the
consideration received and the cost price of the share, including any costs incurred in
relation to the acquisition or realization of the share. Any unused allowance on a share
(ref. above) may be set off against capital gains related to the realization of the same
share, but may not lead to or increase a deductible loss i.e. any unused allowance
exceeding the capital gain upon the realization of the share will be lost. Furthermore,
unused allowance may not be set of against gains from realization of other shares.
If a Shareholder disposes of shares acquired at different times, the shares that were first
acquired will be deemed as first sold (the FIFO-principle) when calculating a taxable gain
or loss.
12.2.3 Non-resident Shareholders
As a general rule, capital gains generated by Non-resident Shareholders are not taxable
in Norway unless
(i)
the shares are effectively connected with business activities carried out or
managed in Norway (in which case capital gains will generally be subject to the
same taxation as that of Norwegian Shareholders, cf the description of tax issues
related to Norwegian Shareholders above), or
(ii)
the shares are held by an individual who has been a resident of Norway for tax
purposes with unsettled/postponed exit tax calculated on the shares at the time of
cessation as Norwegian tax resident.
12.3
Net wealth tax
Norwegian limited liability companies and certain similar entities are exempt from
Norwegian net wealth tax.
For other resident Shareholders (i.e. Shareholders who are individual), the shares will
form part of the basis for the calculation of net wealth tax. The current marginal net
wealth tax rate is 0.85% of taxable values.
Listed shares are valued at 100% of their quoted value on 1 January in the assessment
year (the year following the income year).
12.4
Inheritance tax
As of 1 January 2014 the Norwegian Inheritance Tax was abolished. However, the heir
acquires the donor's tax input value of the shares based on principles of continuity. Thus,
the heir will be taxable for any increase in value in the donor's ownership, at the time of
the heir's realization of the shares. However, in the case of gifts distributed to other
persons than heirs according to law or testament, the recipient will be able to revalue the
received shares to market value.
12.5
Stamp duty
There is currently no Norwegian stamp duty or transfer tax on the transfer or issuance of
shares.
87
13.
THE RIGHTS OFFERING
13.1
Overview
The Rights Offering consists of an offer by the Company to issue 454,430,000 New
Shares at a Subscription Price of NOK 1.80 per New Share, thereby raising gross
proceeds of approximately USD 100 million.
The Company intends to use the net proceeds to serve interest and instalments on its
debt in accordance with its repayment schedules and thereby continue to reduce the
Company's debt leverage. In addition the net proceeds will be used to make payments
under the Company's newbuilding program.
Existing Shareholders will be granted tradable Subscription Rights providing a
preferential right to subscribe for and be allocated New Shares in the Rights Offering.
Oversubscription and subscription without Subscription Rights will be permitted;
however, there can be no assurance that New Shares will be allocated for such
subscriptions.
The largest shareholder of the Company, Siem Europe S.a r.l., has entered into an
underwriting agreement with the Company, whereby it will subscribe for any New Shares
not otherwise subscribed for in the Rights Offering. See Section 13.20, "The Rights
Offering—The Underwriting" for more details.
No action will be taken to permit a public offering of the New Shares in any jurisdiction
outside of Norway.
13.2
Resolution to Issue the New Shares
On 14 August 2015, an extraordinary general meeting of the Company passed the
following resolution to increase the authorized share capital of the Company in
connection with the Rights Offering:
To approve the increase of the authorised share capital of the Company from
US$5,500,000 divided into 550,000,000 Common Shares of par value US$0.01
each to US$10,000,000 divided into 1,000,000,000 Common Shares of par value
US$0.01 each, by the creation of an additional 450,000,000 Common Shares of
par value US$0.01 each to rank pari passu in all respects with the existing shares.
On 14 August 2015, the Board of Directors passed the following resolution to issue New
Shares in connection with the Rights Offering:
The Board of Directors had earlier approved the Rights Issue in principle at its 10
June 2015 meeting held in Oslo and the purpose of this meeting was to approve
the terms of the Rights Issue.
Pursuant to the Rights Issue, the Company will offer 454,430,000 new Common
Shares in the Company (the "New Shares") with a nominal value of USD 0.01
each, at a subscription price of NOK 1.80 per New Share (the "Subscription
Price"). It was also noted that holders of the Company’s shares registered in the
Norwegian Central Securities Depository (the "VPS") as of 18 August 2015 (the
"Existing Shareholders") are being granted transferable subscription rights (the
"Subscription Rights") that, subject to applicable law, provide preferential rights
to subscribe for and be allocated New Shares at the Subscription Price.
Each Existing Shareholder will be granted 1.1724 Subscription Rights for each
share registered as held by such Existing Shareholder as of 18 August 2015 (the
"Record Date"). Further, each Subscription Right will give the right to subscribe
88
for and be allocated one New Share.
The Company has proposed that the subscription period shall commence on 19
August 2015 and expire at 16:30 hours, Central European Time ("CET"), on 2
September 2015 (the "Subscription Period"). If the Subscription Period is
postponed, then the Subscription Period shall commence on the second trading
day following approval of the Prospectus and end at 16.30 CET on the 14th day
thereafter if the Prospectus is not approved in time for the Subscription Period to
commence on 19 August 2015. Any New Shares which shall be subscribed for by
the underwriters shall be subscribed for within 2 trading days after expiry of the
Subscription Period.
The Subscription Rights will be listed and tradable on the Oslo Børs (the "Oslo
Stock Exchange") under the ticker code SIOFF T from 19 August 2015 until the
end of trading on the Oslo Stock Exchange on 31 August 2015.
The Prospectus is required to be approved by the Norwegian Financial Supervisory
Authority in connection with the Rights Issue. Unless the Directors decide
otherwise, the Prospectus shall not be registered with or approved by any foreign
authorities. The New Shares cannot be subscribed by investors in jurisdictions in
which it is not permitted to offer New Shares to the investors in question without
the registration or approval of a Prospectus, unless such registration or approval
has taken place pursuant to a resolution by the Directors. With respect to
Subscription Rights issued to any shareholder that in the Company’s view is not
entitled to subscribe for New Shares due to limitations imposed by laws or
regulations of the jurisdiction where such shareholder is a resident or citizen, the
Company (or someone appointed or instructed by it) may sell such shareholder's
Subscription Rights against transfer of the net proceeds from such sale to the
shareholder.
The allocation of New Shares shall be made by the Directors and that the following
allocation criteria shall apply:
(i)
The allocation will be made to subscribers on the basis of granted
and acquired Subscription Rights which have been validly exercised
during the Subscription Period. Each Subscription Right will give the
right to subscribe for and be allocated 1 New Share;
(ii)
If not all Subscription Rights are validly exercised in the
Subscription Period, subscribers having exercised their Subscription
Rights and who have over-subscribed will have the right to be
allocated the remaining New Shares pro rata based on the number
of Subscription Rights exercised by the subscriber. In the event that
pro rata allocation is not possible, the Company will determine the
allocation by lot drawing;
(iii)
any remaining New Shares not allocated pursuant to the criteria in
items (i) and (ii) above, will be allocated to subscribers not holding
Subscription Rights. Allocation will be made pro rata based on the
respective subscription amounts, provided, however, that such
allocation may be rounded down; and
(iv)
if the subscription amount of approximately USD 100,000,000 has
not been subscribed and allocated pursuant to the criteria in items
(i), (ii) and (iii) above, the outstanding amount will be subscribed
by and allocated to the underwriters, based on and in accordance
with their respective underwriting obligations. They will receive a
89
guarantee commission of 1% on the guaranteed amount.
The due date for payment of the New Shares is 14 September 2015 or the third
trading day on Oslo Børs after expiry of the Subscription Period if the Subscription
Period is postponed as noted above.
The New Shares will give full shareholder rights in the Company, including the
right to dividends, from the time the share capital increase is registered with the
Register of Business Enterprises.
The Company's estimated costs in connection with the capital increase are approx.
NOK9 million, of which approx. NOK8 million will be consideration for the
underwriting guarantee established through separate agreements with the
respective underwriter.
13.3
Conditions for Completion of the Rights Offering
The completion of the Rights Offering is subject to the condition that, unless the Rights
Offering is fully subscribed, the Underwriting Agreement remaining in full force and
effect.
Please refer to Section 13.20 "—The Underwriting") below for a description of the
underwriting and the Underwriting Agreement and the Shareholder Commitments,
including the conditions and termination rights to which the underwriting is subject.
If it becomes clear that the above conditions will not be fulfilled, the Rights Offering will
be withdrawn. If the Rights Offering is withdrawn, all Subscription Rights will lapse
without value, any subscriptions for, and allocations of, New Shares that have been made
will be disregarded and any payments for New Shares made will be returned to the
subscribers without interest or any other compensation. The lapsing of Subscription
Rights shall be without prejudice to the validity of any trades in Subscription Rights, and
investors will not receive any refund or compensation in respect of Subscription Rights
purchased in the market.
13.4
Timetable
The timetable set out below provides certain indicative key dates for the Rights Offering:
Last
day
of
trading
in
the
Shares
including
14 August 2015
in
the
Shares
excluding
17 August 2015
Subscription Rights
First
day
of
trading
Subscription Right
Record Date
18 August 2015
Subscription Period commences
19 August 2015
Trading in Subscription Rights commences on the Oslo
Stock Exchange
19 August 2015
Trading in Subscription Rights ends
End of trading on the Oslo Stock
Exchange on 31 August 2015
Subscription Period ends
2 September 2015 at 16:30 hours (CET)
Allocation of the New Shares
Expected on or about 4 September 2015
Distribution of allocation letters
Payment Date
14 September 2015
Delivery of the New Shares
Listing and commencement of trading in the New
Shares on the Oslo Stock Exchange
90
13.5
Subscription Price
The Subscription Price in the Rights Offering is NOK 1.80 per New Share. The
Subscription Price represents a discount of approximately 14.29% to the closing price of
NOK 2.10 per Share as quoted on 10 June 2015.
13.6
Subscription Period
The Subscription Period will commence on 19 August 2015 and end on 2 September 2015
at 16:30 hours (CET). The Subscription Period may not be extended.
13.7
Record Date
Shareholders who are registered in the Company’s shareholder register in the VPS as of
18 August 2015 (the Record Date) will receive Subscription Rights.
Provided that the delivery of traded Shares is made with ordinary T+2 settlement in the
VPS, Shares that are acquired until and including 14 August 2015 will give the right to
receive Subscription Rights, whereas Shares that are acquired from and including 17
August 2015 will not give the right to receive Subscription Rights.
13.8
Subscription Rights
Existing Shareholders will be granted Subscription Rights giving a preferential right to
subscribe for and be allocated New Shares in the Rights Offering. Each Existing
Shareholder will be granted 1.1724 tradable Subscription Rights for each Existing Shares
registered as held by such Existing Shareholder on the Record Date. The number of
Subscription Rights granted to each Existing Shareholder will be rounded down to the
nearest whole Subscription Right. Each Subscription Right will, subject to applicable
securities laws, give the right to subscribe for and be allocated one New Share in the
Rights Offering.
The Subscription Rights will be credited to and registered on each Existing Shareholder’s
VPS account on or about 19 August 2015 under the International Securities Identification
Number (ISIN) KYG812291097. The Subscription Rights will be distributed free of charge
to Existing Shareholders.
The Subscription Rights may be used to subscribe for New Shares in the Rights Offering
before the expiry of the Subscription Period on 2 September 2015 at 16:30 hours (CET)
or be sold before the end of trading on the Oslo Stock Exchange on 31 August 2015.
Acquired Subscription Rights will give the same right to subscribe for and be allocated
New Shares as Subscription Rights held by Existing Shareholders on the basis of their
shareholdings on the Record Date.
The Subscription Rights, including acquired Subscription Rights, must be used to
subscribe for New Shares before the end of the Subscription Period (i.e., 2 September
2015 at 16:30 hours (CET)) or be sold before the end of trading on the Oslo Stock
Exchange on 31 August 2015. Subscription Rights which are not sold before the end of
trading on the Oslo Stock Exchange on 31 August 2015 or exercised before 2 September
2015 at 16:30 hours (CET) will have no value and will lapse without compensation to the
holder. Holders of Subscription Rights (whether granted or acquired) should note that
subscriptions for New Shares must be made in accordance with the procedures set out in
this Prospectus.
Subscription Rights of Existing Shareholders resident in jurisdictions where the
Prospectus may not be distributed and/or with legislation that, according to the
Company’s assessment, prohibits or otherwise restricts subscription for New Shares (the
"Ineligible Shareholders") will initially be credited to such Ineligible Shareholders’ VPS
accounts. Such credit specifically does not constitute an offer to Ineligible Shareholders.
91
The Company will instruct the Manager to, as far as possible, withdraw the Subscription
Rights from such Ineligible Shareholders’ VPS accounts, and sell them from and including
19 August 2015 until the end of trading on the Oslo Stock Exchange on 31 August 2015
for the account and risk of such Ineligible Shareholders, unless the relevant Subscription
Rights are held through a financial intermediary. Please refer to Section 13.12, "—The
Underwriting" below for a description of the procedures applicable to Subscription Rights
held by Ineligible Shareholders through financial intermediaries.
The Manager will use commercially reasonable efforts to procure that the Subscription
Rights withdrawn from the VPS accounts of Ineligible Shareholders (and that are not held
through financial intermediaries) are sold on behalf of, and for the benefit of, such
Ineligible Shareholders during said period, provided that (i) the Manager is able to sell
the Subscription Rights at a price at least equal to the anticipated costs related to the
sale of such Subscription Rights, and (ii) the relevant Ineligible Shareholder has not by
16:30 hours (CET) on 2 September 2015 documented to the Company through the
Manager a right to receive the Subscription Rights withdrawn from its VPS account, in
which case the Manager shall re-credit the withdrawn Subscription Rights to the VPS
account of the relevant Ineligible Shareholder.
The proceeds from the sale of the Subscription Rights (if any), after deduction of
customary sales expenses, will be credited to the Ineligible Shareholder’s bank account
registered in the VPS for payment of dividends, provided that the net proceeds
attributable to such Ineligible Shareholder amount to or exceed NOK 10. If an Ineligible
Shareholder does not have a bank account registered in the VPS, the Ineligible
Shareholder must contact the Manager to claim the proceeds. If the net proceeds
attributable to an Ineligible Shareholder are less than NOK 10, such amount will be
retained for the benefit of the Company. There can be no assurance that the Manager will
be able to withdraw and/or sell the Subscription Rights at a profit or at all. Other than as
explicitly stated above, neither the Company nor the Manager will conduct any sale of
Subscription Rights not utilised before the end of the Subscription Period.
13.9
Trading in Subscription Rights
The Subscription Rights will be fully tradable and listed on the Oslo Stock Exchange with
ticker code "SIOFF T" and with ISIN KYG812291097 from 19 August 2015 until the end of
trading on the Oslo Stock Exchange on 31 August 2015. Subscription Rights acquired
during the aforementioned trading period carry the same rights to subscribe for New
Shares during the Subscription Period, as Subscription Rights received and held by
Eligible Shareholders.
The Subscription Rights will hence only be tradable during part of the
Subscription Period.
Persons intending to trade in Subscription Rights should be aware that the exercise of
Subscription Rights by holders who are located in jurisdictions outside Norway may be
restricted or prohibited by applicable securities laws. Please refer to Section 14, "Selling
and transfer restrictions" for a description of such restrictions and prohibitions.
92
13.10 Subscription Procedures
Subscriptions for New Shares must be made by submitting a correctly completed
Subscription Form to the Manager or the Receiving Agent during the Subscription Period
or, for Norwegian citizens, made online as further described below.
Existing Shareholders will receive Subscription Forms that include information about the
number of Subscription Rights allocated to the Existing Shareholder and certain other
matters relating to the shareholding.
Subscriptions for New Shares by subscribers who are not Existing Shareholders must be
made on a Subscription Form in the form included in Annex 2 "Form of Subscription
Form". Existing Shareholders may also choose to use such a Subscription Form.
Correctly completed Subscription Forms must be received by the Manager or the
Receiving Agent no later than 16:30 hours (CET) on 2 September 2015 at the following
addresses or fax numbers:
Swedbank
Filipstad Brygge 1
P.O. Box 1441 Vika
N-0115 Oslo
Norway
Tel.: +47 23 23 80 00
Fax: +47 23 23 80 11
www.swedbank.no
DNB Markets Registrars Department
Dronning Eufemias gate 30
P.O. Box 1600 Sentrum
N-0021 Oslo
Norway
Tel.: +47 23 26 81 01
Email: [email protected]
www.dnb.no/emisjoner
Subscribers who are residents of Norway with a Norwegian personal identification
number (Nw. personnummer) are encouraged to subscribe for New Shares through the
VPS online subscription system (or by following the links on www.swedbank.no and
www.dnb.no/emisjoner which will redirect the subscriber to the VPS online subscription
system).
Neither the Company, the Receiving Agent nor the Manager may be held responsible for
postal delays, unavailable fax lines, internet lines or servers or other logistical or
technical problems that may result in subscriptions not being received in time or at all by
the Manager or the Receiving Agent. Subscription Forms received after the end of the
Subscription Period and/or incomplete or incorrect Subscription Forms and any
subscription that may be unlawful may be disregarded at the sole discretion of the
Company, Receiving Agent and/or the Manager without notice to the subscriber.
Subscriptions are binding and irrevocable, and cannot be withdrawn, cancelled or
modified by the subscriber after having been received by the Manager or the Receiving
Agent. The subscriber is responsible for the correctness of the information filled into the
Subscription Form. By signing and submitting a Subscription Form, the subscribers
confirm and warrant that they have read this Prospectus and are eligible to subscribe for
New Shares under the terms set forth herein.
There is no minimum subscription amount for which subscriptions in the Rights Offering
must be made. Oversubscription (i.e., subscription for more New Shares than the
number of Subscription Rights held by the subscriber entitles the subscriber to be
allocated) and subscription without Subscription Rights will be permitted. However, in
each case there can be no assurance that New Shares will be allocated for such
subscriptions.
Multiple subscriptions (i.e., subscriptions on more than one Subscription Form) are
allowed. Please note, however, that two separate Subscription Forms submitted by the
same subscriber with the same number of New Shares subscribed for on both
93
Subscription Forms will only be counted once unless otherwise explicitly stated in one of
the Subscription Forms. In the case of multiple subscriptions through the VPS online
subscription system or subscriptions made both on a Subscription Form and through the
VPS online subscription system, all subscriptions will be counted.
13.11 Mandatory Anti-Money Laundering Procedures
The Rights Offering is subject to the Norwegian Money Laundering Act No. 11 of 6 March
2009 and the Norwegian Money Laundering Regulations No. 302 of 13 March 2009
(collectively the "Anti-Money Laundering Legislation").
Subscribers who are not registered as existing customers of the Manager or the
Receiving Agent must verify their identity to the Manager or the Receiving Agent in
accordance with requirements of the Anti-Money Laundering Legislation, unless an
exemption is available. Subscribers who have designated an existing Norwegian bank
account and an existing VPS account on the Subscription Form are exempted, unless
verification of identity is requested by the Manager or the Receiving Agent. Subscribers
who have not completed the required verification of identity prior to the expiry of the
Subscription Period will not be allocated New Shares.
Furthermore, participation in the Rights Offering is conditional upon the subscriber
holding a VPS account. The VPS account number must be stated in the Subscription
Form. VPS accounts can be established with authorised VPS registrars, who can be
Norwegian banks, authorised securities brokers in Norway and Norwegian branches of
credit institutions established within the EEA. However, non-Norwegian investors may
use nominee VPS accounts registered in the name of a nominee. The nominee must be
authorised by the NFSA. Establishment of a VPS account requires verification of
identification to the VPS registrar in accordance with the Anti-Money Laundering
Legislation.
13.12 Financial Intermediaries
All persons or entities holding Shares or Subscription Rights through financial
intermediaries (i.e., brokers, custodians and nominees) should read this Section 13.12.
All questions concerning the timeliness, validity and form of instructions to a financial
intermediary in relation to the exercise, sale or purchase of Subscription Rights should be
determined by the financial intermediary in accordance with its usual customer relations
procedure or as it otherwise notifies each beneficial shareholder.
The Company is not liable for any action or failure to act by a financial intermediary
through which Shares are held.
13.12.1
Subscription Rights
If an Existing Shareholder holds Shares registered through a financial intermediary on
the Record Date, the financial intermediary will customarily give the Existing Shareholder
details of the aggregate number of Subscription Rights to which it will be entitled. The
relevant financial intermediary will customarily supply each Existing Shareholder with this
information in accordance with its usual customer relations procedures. Existing
Shareholders holding Shares through a financial intermediary should contact the financial
intermediary if they have received no information with respect to the Rights Offering.
Subject to applicable law, Existing Shareholders holding Shares through a financial
intermediary may instruct the financial intermediary to sell some or all of their
Subscription Rights, or to purchase additional Subscription Rights on their behalf. Please
refer to Section 14, "Selling and transfer restrictions" for a description of certain
restrictions and prohibitions applicable to the sale and purchase of Subscription Rights in
certain jurisdictions outside Norway.
94
Existing Shareholders who hold their Shares through a financial intermediary and who
are Ineligible Shareholders will not be entitled to exercise their Subscription Rights but
may, subject to applicable law, instruct their financial intermediaries to sell their
Subscription Rights transferred to the financial intermediary. As described in Section
13.8, "—Subscription Rights", neither the Company nor the Manager or the Receiving
Agent will sell any Subscription Rights transferred to financial intermediaries.
13.12.2
Subscription Period and period for trading in Subscription Rights
The time by which notification of exercise instructions for subscription of New Shares
must validly be given to a financial intermediary may be earlier than the expiry of the
Subscription Period. The same applies for instructions pertaining to trading in
Subscription Rights and the last day of trading in such rights (which accordingly will be a
deadline earlier than the end of trading on the Oslo Stock Exchange on 31 August 2015.
Such deadlines will depend on the financial intermediary. Existing Shareholders who hold
their Shares through a financial intermediary should contact their financial intermediary if
they are in any doubt with respect to deadlines.
13.12.3
Subscription
Any Existing Shareholder who is not an Ineligible Shareholder and who holds its
Subscription Rights through a financial intermediary and wishes to exercise its
Subscription Rights, should instruct its financial intermediary in accordance with the
instructions received from such financial intermediary. The financial intermediary will be
responsible for collecting exercise instructions from the Existing Shareholders and for
informing the Manager or the Receiving Agent of their exercise instructions.
A person or entity who has acquired Subscription Rights that are held through a financial
intermediary should contact the relevant financial intermediary for instructions on how to
exercise the Subscription Rights.
Please refer to Section 14, "Selling and transfer restrictions" for a description of certain
restrictions and prohibitions applicable to the exercise of Subscription Rights in certain
jurisdictions outside Norway.
13.12.4
Method of payment
Any Existing Shareholder who holds its Subscription Rights through a financial
intermediary should pay the Subscription Price for the New Shares that are allocated to it
in accordance with the instructions received from the financial intermediary. The financial
intermediary must pay the Subscription Price in accordance with the instructions in the
Prospectus. Payment by the financial intermediary for the New Shares must be made to
the Manager or the Receiving Agent no later than the Payment Date. Accordingly,
financial intermediaries may require payment to be provided to them prior to the
Payment Date.
13.13 Allocation of New Shares
Allocation of the New Shares will take place on or about 4 September 2015 in accordance
with the following criteria:
i.
Allocation will be made to subscribers on the basis of granted and acquired
Subscription Rights, which have been validly exercised during the Subscription
Period. Each Subscription Right will give the right to subscribe for and be allocated
one New Share in the Rights Offering.
ii.
If not all Subscription Rights are exercised, subscribers having exercised their
Subscription Rights and who have oversubscribed will be allocated additional New
Shares on a pro rata basis based on the number of Subscription Rights exercised
95
by each such subscriber. To the extent that pro rata allocation is not possible, the
Company will determine the allocation by the drawing of lots.
iii.
New Shares not allocated pursuant to (i) and (ii) above will be allocated to
subscribers not holding Subscription Rights. Allocation will be sought made on a
pro rata basis based on the relevant subscription amounts.
iv.
New Shares not allocated pursuant to (i), (ii) and (iii) above will be subscribed by,
and allocated to, the Underwriter.
No fractional New Shares will be allocated. The Company reserves the right to round off,
reject or reduce any subscription for New Shares not covered by Subscription Rights.
Allocation of fewer New Shares than subscribed for by a subscriber will not impact on the
subscriber’s obligation to pay for the number of New Shares allocated.
The result of the Rights Offering is expected to be published on or about 3 September
2015 in the form of a stock exchange notification from the Company through the Oslo
Stock
Exchange
information
system
and
at
the
Company’s
website
(http://www.siemoffshore.com/). Notifications of allocated New Shares and the
corresponding subscription amount to be paid by each subscriber are expected to be
distributed in a letter from the VPS on or about 4 September 2015. Subscribers having
access to investor services through their VPS account manager will be able to check the
number of New Shares allocated to them from 12:00 hours (CET) on 4 September 2015.
Subscribers who do not have access to investor services through their VPS account
manager may contact the Manager or the Receiving Agent from 14:00 hours (CET) on 4
September 2015 to get information about the number of New Shares allocated to them.
13.14 Payment for the New Shares
The payment for New Shares allocated to a subscriber falls due on the Payment Date (14
September 2015). Payment must be made in accordance with the requirements set out
in Sections 13.14.1 "—Subscribers who have a Norwegian bank account" or 13.14.2 "—
Subscribers who do not have a Norwegian bank account" below.
13.14.1
Subscribers who have a Norwegian bank account
Subscribers who have a Norwegian bank account must, and will by signing the
Subscription Form, provide the Manager or the Receiving Agent with a one-time
irrevocable authorisation to debit a specified bank account with a Norwegian bank for the
amount payable for the New Shares which are allocated to the subscriber.
The specified bank account is expected to be debited on or after the Payment Date. The
Manager or the Receiving Agent is only authorised to debit such account once, but
reserves the right to make up to three debit attempts, and the authorisation will be valid
for up to seven working days after the Payment Date.
The subscriber furthermore authorises the Manager or the Receiving Agent to obtain
confirmation from the subscriber’s bank that the subscriber has the right to dispose over
the specified account and that there are sufficient funds in the account to cover the
payment.
If there are insufficient funds in a subscriber’s bank account or if it for other reasons is
impossible to debit such bank account when a debit attempt is made pursuant to the
authorisation from the subscriber, the subscriber’s obligation to pay for the New Shares
will be deemed overdue.
Payment by direct debiting is a service that banks in Norway provide in cooperation. In
the relationship between the subscriber and the subscriber’s bank, the standard terms
96
and conditions for "Payment by Direct Debiting – Securities Trading", which are set out
on page 2 of the Subscription Form, will apply, provided, however, that subscribers who
subscribe for an amount exceeding NOK 5 million by signing the Subscription Form
provide the Manager or the Receiving Agent with a one-time irrevocable authorisation to
directly debit the specified bank account for the entire subscription amount.
13.14.2
Subscribers who do not have a Norwegian bank account
Subscribers who do not have a Norwegian bank account must ensure that payment with
cleared funds for the New Shares allocated to them is made on or before the Payment
Date.
Prior to any such payment being made, the subscriber must contact the Manager or the
Receiving Agent for further details and instructions.
13.14.3
Overdue payments
Overdue payments will be charged with interest at the applicable rate from time to time
under the Norwegian Act on Interest on Overdue Payment of 17 December 1976 No. 100,
currently 9.00% per annum. If a subscriber fails to comply with the terms of payment,
the New Shares will not be delivered to the subscriber.
13.15 Delivery of the New Shares
The Company expects that the New Shares will be issued on or about 17 September
2015 and that the New Shares will be delivered to the VPS accounts of the subscribers to
whom they are allocated on or about the same day.
13.16 Listing of the New Shares
The Shares are listed on the Oslo Stock Exchange under ticker code "SIOFF". The New
Shares will be listed on the Oslo Stock Exchange as soon as the New Shares have been
issued and registered in the VPS. This is expected to take place on or about 18
September 2015. The listing of the New Shares on the Oslo Stock Exchange is expected
to take place on the same day.
The New Shares may not be transferred or traded before they are fully paid and said
registration the VPS has taken place.
13.17 The rights conferred by the New Shares
The New Shares issued in the Rights Offering will be ordinary shares in the Company
having a nominal value of USD 0.01 each and will be issued electronically in registered
form.
The New Shares will rank pari passu in all respects with the Existing Shares and will carry
full shareholder rights in the Company from the time of issue. The New Shares will be
eligible for any dividends which the Company may declare after said registration. Please
refer to Section 10, "Corporate information", for a more detailed description of the
Shares.
13.18 VPS registration
The Subscription Rights will be registered with the VPS under the International Securities
Identification Number (ISIN) KYG812291097. The New Shares will be registered in the
VPS with the same International Securities Identification Number as the Existing Shares,
being ISIN KYG813131011.
The Company’s registrar in the VPS is Nordea Bank Norge ASA, Postboks 1166 Sentrum,
0107 Oslo, Norway.
97
13.19 Dilution
The Rights Offering will result in an immediate dilution of approximately 54% for Existing
Shareholders who do not participate in the Rights Offering.
13.20 The underwriting
The largest shareholder of the Company, Siem Europe S.a r.l., having its registered
address on 11-13, Boulevard de la Foire, L-1528 Luxembourg, Grand Duchy of
Luxembourg, has on 11 August 2015 entered into the Underwriting Agreement with the
Company whereby they undertake to guarantee for the subscription of all New Shares
not subscribed for by other subscribers. Siem Europe S.a r.l. will receive an underwriting
commission of 1.00% of the underwriting obligation.
The underwriting obligation of Siem Europe S.a r.l. is conditional upon no change, event,
effect, or condition (which shall result not only from events occurring after the signing of
the Underwriting Agreement, but also as a result of, separately or in combination with,
any previously undisclosed circumstances) occurring prior to such time as payment for
the Offer Shares is due, that has or would be expected to have, in the opinion of Siem
Europe S.a r.l., acting in good faith, individually or in the aggregate, a material adverse
effect on the conditions, assets, operations, results or prospectus of the Company and its
subsidiaries taken as a whole.
13.21 Net proceeds and expenses relating to the Rights Offering
The Company will bear the fees and expenses related to the Rights Offering, which are
estimated to amount to approximately NOK 2 million, consisting of fees to the Manager
and the Receiving Agent and other fees and expenses related to the Rights Issue. In
addition the underwriters' commission is 1% of the underwriting obligation as described
in Section 13.20, "—The Underwriting" above. No expenses or taxes will be charged by
the Company or the Manager to the subscribers in the Rights Offering.
Total net proceeds from the Rights Offering are estimated to amount to approximately
USD 99 million.
13.22 Interests of natural and legal persons involved in the Rights Offering
The Manager and the Receiving Agent, or their affiliates, have provided from time to
time, and may provide in the future, investment and commercial banking services to the
Company and its affiliates in the ordinary course of business, for which they may have
received and may continue to receive customary fees and commissions. The Manager and
the Receiving Agent, their employees and any affiliate may currently own Existing Shares
in the Company. Further, in connection with the Rights Offering, the Manager and the
Receiving Agent, their employees and any affiliate acting as an investor for its own
account may receive Subscription Rights (if they are Existing Shareholders) and may
exercise its right to take up such Subscription Rights and acquire New Shares, and, in
that capacity, may retain, purchase or sell Subscription Rights or New Shares and any
other securities of the Company or other investments for its own account and may offer
or sell such securities (or other investments) otherwise than in connection with the
Rights Offering. The Manager and the Receiving Agent do not intend to disclose the
extent of any such investments or transactions otherwise than in accordance with any
legal or regulatory obligation to do so.
The Manager and the Receiving Agent will receive a management fee in connection with
the Offering and, as such, have an interest in the Offering.
98
13.23 Participation of Major Existing Shareholders and Members of the
Company’s Management, Supervisory and Administrative Bodies in the
Rights Offering
The Company's largest shareholders, Siem Europe S.a r.l, has underwritten the Rights
Offering. Please see Section 13.20, "—The Underwriting".
13.24 Publication of information relating to the Rights Offering
In addition to press releases which will be posted on the Company’s website, the
Company will use the Oslo Stock Exchange information system to publish information
relating to the Rights Offering.
13.25 Governing law and jurisdiction
This Prospectus, the Subscription Forms and the terms and conditions of the Rights
Offering shall be governed by and construed in accordance with Norwegian law. Any
dispute arising out of, or in connection with, this Prospectus or the Rights Offering shall
be subject to the exclusive jurisdiction of the courts of Norway, with Oslo as legal venue.
13.26 Manager, Receiving Agent and advisors
The Rights Issue is managed by Swedbank, Filipstad Brygge 1, P.O Box 1441 Vika, N0115 Oslo, Norway. DNB Markets, Dronning Eufemias gate 30, P.O. Box 1600 Sentrum,
0021 Oslo, Norway is acting as Receiving Agent in the Rights Issue.
Advokatfirmaet Wiersholm AS has acted as the Company's legal adviser in connection
with the Rights Issue.
13.27 How to proceed
The below instructions apply to subscriptions for New Shares on the basis of Subscription
Rights. Please see above for further details of the Rights Offering, including details on
oversubscription and subscription without Subscription Rights.
Terms and conditions ................................
For each Existing Shares you own, you will
receive 1.1724 Subscription Rights. Each
Subscription Right gives an entitlement to
subscribe for and to be allocated one New
Share.
Subscription Price ..................................... NOK 1.80 per New Share.
Record Date for determining the right to
receive Subscription Rights ........................
18 August 2015 (i.e. shareholders who are
registered in the Company’s shareholder
register in the VPS as of 18 August 2015
will receive Subscription Rights).
Trading in Subscription Rights ....................
19 August 2015 to the end of trading on
the Oslo Stock Exchange on 31 August
2015.
Subscription Period ................................... 19 August 2015 to 2 September 2015 at
16:30 hours (CET).
99
14.
SELLING AND TRANSFER RESTRICTIONS
14.1
General
As a consequence of the following restrictions, prospective investors are advised to
consult legal counsel prior to making any offer, resale, pledge or other transfer of the
Shares offered hereby.
Other than in Norway, the Company is not taking any action to permit a public offering of
the Shares in any jurisdiction. Receipt of this Prospectus will not constitute an offer in
those jurisdictions in which it would be illegal to make an offer and, in those
circumstances, this Prospectus is for information only and should not be copied or
redistributed. Except as otherwise disclosed in this Prospectus, if an investor receives a
copy of this Prospectus in any jurisdiction other than Norway, the investor may not treat
this Prospectus as constituting an invitation or offer to it, nor should the investor in any
event deal in the Shares, unless, in the relevant jurisdiction, such an invitation or offer
could lawfully be made to that investor, or the Shares could lawfully be dealt in without
contravention of any unfulfilled registration or other legal requirements. Accordingly, if
an investor receives a copy of this Prospectus, the investor should not distribute or send
the same, or transfer Shares, to any person or in or into any jurisdiction where to do so
would or might contravene local securities laws or regulations.
14.2
Selling restrictions
14.2.1 United States
The New Shares have not been and will not be registered under the U.S. Securities Act,
and may not be offered or sold except: (i) within the United States to QIBs in reliance on
Rule 144A; or (ii) to certain persons in offshore transactions in compliance with
Regulation S under the U.S. Securities Act, and in accordance with any applicable
securities laws of any state or territory of the United States or any other jurisdiction.
Accordingly, each Manager has represented and agreed that it has not offered or sold,
and will not offer or sell, any of the New Shares as part of its allocation at any time other
than to QIBs in the United States in accordance with Rule 144A or outside of the United
States in compliance with Rule 903 of Regulation S. Transfer of the New Shares will be
restricted and each purchaser of the New Shares in the United States will be required to
make certain acknowledgements, representations and agreements, as described under
Section 18.3.1 "—Transfer restrictions—United States".
Any offer or sale in the United States will be made by affiliates of the Manager who are
broker-dealers registered under the U.S. Exchange Act. In addition, until 40 days after
the commencement of the Rights Offering, an offer or sale of New Shares within the
United States by a dealer, whether or not participating in the Rights Offering, may violate
the registration requirements of the U.S. Securities Act if such offer or sale is made
otherwise than in accordance with Rule 144A of the U.S. Securities Act and in connection
with any applicable state securities laws.
14.2.2 United Kingdom
This Prospectus and any other material in relation to the Rights Offering described herein
is only being distributed to, and is only directed at persons in the United Kingdom who
are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive
(“qualified investors”) that are also (i) investment professionals falling within Article
19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005
(the “Order”); (ii) high net worth entities or other persons falling within Article 49(2)(a)
to (d) of the Order; or (iii) persons to whom distributions may otherwise lawfully be
made (all such persons together being referred to as “Relevant Persons”). The Offer
Shares are only available to, and any investment or investment activity to which this
Prospectus relates is available only to, and will be engaged in only with, Relevant
Persons). This Prospectus and its contents are confidential and should not be distributed,
100
published or reproduced (in whole or in part) or disclosed by recipients to any other
person in the United Kingdom. Persons who are not Relevant Persons should not take any
action on the basis of this Prospectus and should not rely on it.
14.2.3 European Economic Area
In relation to each Relevant Member State, with effect from and including the date on
which the Prospectus Directive is implemented in that Relevant Member State (the
"Relevant Implementation Date"), an offer to the public of any New Shares which are
the subject of the offering contemplated by this Prospectus may not be made in that
Relevant Member State, other than the offering in Norway as described in this
Prospectus, once the Prospectus has been approved by the competent authority in
Norway and published in accordance with the Prospectus Directive (as implemented in
Norway), except that an offer to the public in that Relevant Member State of any New
Shares may be made at any time with effect from and including the Relevant
Implementation Date under the following exemptions under the Prospectus Directive, if
they have been implemented in that Relevant Member State:
a) to legal entities which are qualified investors as defined in the Prospectus
Directive;
b) to fewer than 100, or, if the Relevant Member State has implemented the relevant
provisions of the 2010 PD Amending Directive, 150, natural or legal persons
(other than qualified investors as defined in the Prospectus Directive), as
permitted under the Prospectus Directive, subject to obtaining the prior consent of
the Manager for any such offer, or in any other circumstances falling within Article
3(2) of the Prospectus Directive; provided that no such offer of New Shares shall
require the Company or any Manager to publish a prospectus pursuant to Article 3
of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of
the Prospectus Directive.
For the purposes of this provision, the expression an "offer to the public" in relation to
any New Shares in any Relevant Member State means the communication in any form
and by any means of sufficient information on the terms of the offer and any Securities
to be offered so as to enable an investor to decide to purchase any New Shares, as the
same may be varied in that Member State by any measure implementing the Prospectus
Directive in that Member State the expression " Prospectus Directive" means Directive
2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the
extent implemented in the Relevant Member State), and includes any relevant
implementing measure in each Relevant Member State and the expression "2010 PD
Amending Directive" means Directive 2010/73/EU.
This EEA selling restriction is in addition to any other selling restrictions set out in this
Prospectus.
14.2.4 Additional jurisdictions
Canada
This Prospectus is not, and under no circumstance is to be construed as, a prospectus, an
advertisement or a public offering of the New Shares in Canada or any province or
territory thereof. Any offer or sale of the New Shares in Canada will be made only
pursuant to an exemption from the requirements to file a prospectus with the relevant
Canadian securities regulators and only by a dealer properly registered under applicable
provincial securities laws or, alternatively, pursuant to an exemption from the dealer
registration requirement in the relevant province or territory of Canada in which such
offer or sale is made.
Hong Kong
The New Shares may not be offered or sold in Hong Kong by means of any document
other than (i) in circumstances which do not constitute an offer to the public within the
meaning of the Companies Ordinance (Cap. 32) of Hong Kong, or (ii) to "professional
101
investors" within the meaning of the Securities and Futures Ordinance (Cap. 571) of
Hong Kong and any rules made thereunder, or (iii) in other circumstances which do not
result in the document being a "prospectus" within the meaning of the Companies
Ordinance (Cap. 32) of Hong Kong, and no advertisement, invitation or document
relating to the New Shares may be issued or may be in the possession of any person for
the purposes of issue (in each case whether in Hong Kong or elsewhere), which is
directed at, or the contents of which are likely to be accessed or read by, the public of
Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other
than with respect to New Shares which are or are intended to be disposed of only to
persons outside Hong Kong or only to "professional investors" within the meaning of the
Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made
thereunder.
Singapore
This Prospectus has not been registered as a prospectus with the Monetary Authority of
Singapore. Accordingly, this Prospectus and any other document or material in
connection with the offer or sale, or invitation for subscription or purchase, of the New
Shares may not be circulated or distributed, nor may they be offered or sold, or be made
the subject of an invitation for subscription or purchase, whether directly or indirectly, to
persons in Singapore other than (i) to an institutional investor under Section 274 of the
Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), (ii) to a relevant
person, or any person pursuant to Section 275(1A), and in accordance with the
conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in
accordance with the conditions of, any other applicable provision of the SFA.
14.2.5 Other jurisdictions
The New Shares may not be offered, sold, resold, transferred or delivered, directly or
indirectly, in or into, Japan, Australia or any other jurisdiction in which it would not be
permissible to offer the New Shares.
In jurisdictions outside the United States and the EEA where the Rights Offering would be
permissible, the New Shares will only be offered pursuant to applicable exceptions from
prospectus requirements in such jurisdictions.
14.3
Transfer restrictions
14.3.1 United States
The New Shares have not been and will not be registered under the U.S. Securities Act
and may not be offered or sold within the United States except pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the U.S.
Securities Act and applicable state securities laws. Terms defined in Rule 144A or
Regulation S shall have the same meaning when used in this Section.
Each purchaser of the New Shares outside the United States pursuant to Regulation S will
be deemed to have acknowledged, represented and agreed that it has received a copy of
this Prospectus and such other information as it deems necessary to make an informed
decision and that:
•
The purchaser is authorised to consummate the purchase of the New Shares in
compliance with all applicable laws and regulations.
•
The purchaser acknowledges that the New Shares have not been and will not be
registered under the U.S. Securities Act, or with any securities regulatory
authority or any state of the United States, and are subject to significant
restrictions on transfer.
•
The purchaser is, and the person, if any, for whose account or benefit the
purchaser is acquiring the New Shares was located outside the United States at
the time the buy order for the New Shares was originated and continues to be
102
located outside the United States and has not purchased the New Shares for the
benefit of any person in the United States or entered into any arrangement for the
transfer of the New Shares to any person in the United States.
•
The purchaser is not an affiliate of the Company or a person acting on behalf of
such affiliate, and is not in the business of buying and selling securities or, if it is
in such business, it did not acquire the New Shares from the Company or an
affiliate thereof in the initial distribution of such Shares.
•
The purchaser is aware of the restrictions on the offer and sale of the New Shares
pursuant to Regulation S described in this Prospectus.
•
The New Shares have not been offered to it by means of any "directed selling
efforts" as defined in Regulation S.
•
The Company shall not recognise any offer, sale, pledge or other transfer of the
New Shares made other than in compliance with the above restrictions.
•
The purchaser acknowledges that the Company, the Manager and their respective
advisers will rely upon the truth and accuracy of the foregoing acknowledgements,
representations and agreements.
Each purchaser of the New Shares within the United States pursuant to Rule 144A will be
deemed to have acknowledged, represented and agreed that it has received a copy of
this Prospectus and such other information as it deems necessary to make an informed
investment decision and that:
•
The purchaser is authorised to consummate the purchase of the New Shares in
compliance with all applicable laws and regulations.
•
The purchaser acknowledges that the New Shares have not been and will not be
registered under the U.S. Securities Act or with any securities regulatory authority
of any state of the United States and are subject to significant restrictions to
transfer.
•
The purchaser (i) is a QIB (as defined in Rule 144A), (ii) is aware that the sale to
it is being made in reliance on Rule 144A and (iii) is acquiring such New Shares for
its own account or for the account of a QIB, in each case for investment and not
with a view to any resale or distribution to the New Shares.
•
The purchaser is aware that the New Shares are being offered in the United States
in a transaction not involving any public offering in the United States within the
meaning of the U.S. Securities Act.
•
If, in the future, the purchaser decides to offer, resell, pledge or otherwise
transfer such New Shares, as the case may be, such Shares may be offered, sold,
pledged or otherwise transferred only (i) to a person whom the beneficial owner
and/or any person acting on its behalf reasonably believes is a QIB in a
transaction meeting the requirements of Rule 144A, (ii) in accordance with
Regulation S, (iii) in accordance with Rule 144 (if available), (iv) pursuant to any
other exemption from the registration requirements of the U.S. Securities Act,
subject to the receipt by the Company of an opinion of counsel or such other
evidence that the Company may reasonably require that such sale or transfer is in
compliance with the U.S. Securities Act or (v) pursuant to an effective registration
statement under the U.S. Securities Act, in each case in accordance with any
applicable securities laws of any state or territory of the United States or any
other jurisdiction.
•
The purchaser is not an affiliate of the Company or a person acting on behalf of
such affiliate, and is not in the business of buying and selling securities or, if it is
in such business, it did not acquire the New Shares from the Company or an
affiliate thereof in the initial distribution of such Shares.
•
The New Shares are "restricted securities" within the meaning of Rule 144(a) (3)
103
and no representation is made as to the availability of the exemption provided by
Rule 144 for resales of any New Shares, as the case may be.
•
The Company shall not recognise any offer, sale pledge or other transfer of the
New Shares made other than in compliance with the above-stated restrictions.
•
The purchaser acknowledges that the Company, the Manager and their respective
advisers will rely upon the truth and accuracy of the foregoing acknowledgements,
representations and agreements.
14.3.2 European Economic Area
•
Each person in a Relevant Member State (other than, in the case of paragraph (a),
persons receiving offers contemplated in this Prospectus in Norway) who receives
any communication in respect of, or who acquires any New Shares under, the
offers contemplated in this Prospectus will be deemed to have represented,
warranted and agreed to and with each Manager and the Company that:
•
it is a qualified investor as defined in the Prospectus Directive; and
•
in the case of any New Shares acquired by it as a financial intermediary, as that
term is used in Article 3(2) of the Prospectus Directive, (i) the New Shares
acquired by it in the offer have not been acquired on behalf of, nor have they
been acquired with a view to their offer or resale to, persons in any Relevant
Member State other than qualified investors, as that term is defined in the
Prospectus Directive, or in circumstances in which the prior consent of the
Manager has been given to the offer or resale; or (ii) where New Shares have
been acquired by it on behalf of persons in any Relevant Member State other than
qualified investors, the offer of those Shares to it is not treated under the
Prospectus Directive as having been made to such persons.
•
For the purposes of this representation, the expression an "offer" in relation to
any New Shares in any Relevant Member State means the communication in any
form and by any means of sufficient information on the terms of the offer and any
New Shares to be offered so as to enable an investor to decide to purchase or
subscribe for the New Shares, as the same may be varied in that Relevant
Member State by any measure implementing the Prospectus Directive in that
Relevant Member State and the expression " Prospectus Directive" means
Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending
Directive, to the extent implemented in the Relevant Member State), and includes
any relevant implementing measure in each Relevant Member State and the
expression "2010 PD Amending Directive" means Directive 2010/73/EU.
104
15.
ADDITIONAL INFORMATION
15.1
Legal Proceedings
There are no governmental, legal or arbitration proceedings, including any such
proceedings which are pending or threatened, during a period covering at least the
previous 12 months which may have, or have had in the recent past significant effects on
the Group’s financial position or profitability.
15.2
Material Contracts
Neither the Group nor any member of the Group has entered into any material contracts
outside the ordinary course of business for the two years prior to the date of this
Prospectus. Further, the Group has not entered into any other contract outside the
ordinary course of business which contains any provision under which any member of the
Group has any obligation or entitlement.
15.3
Related Party Transactions
Siem Industries Inc. is the parent company of Siem Europe S.a r.l. the Company’s largest
shareholder with a holding of 34.39%, and is defined as a related party. The Company is
obligated to Siem Industries Inc., for a fee of USD 250K (2013: USD 300K). This fee is
the remuneration for the services of two of the Board Members. This fee also covers
office in the Cayman Islands and administrative services.
The main shareholder of the Company, Siem Europe S.a r.l. is controlled by a trust where
certain members of Kristian Siem’s family are potential beneficiaries. Kristian Siem, who
is a member of the Board of the Company, is also inter alia the chairman of the board of
directors of Siem Industries Inc. and of Subsea 7 S.A., the charterer of the OSCV "Siem
Stingray". The contract between the Company and Subsea 7 S.A is made on arm's length
terms.
In September 2014 Siem Industries Inc., which is the beneficial owner of Siem Europe
S.a r.l., announced the acquisition of Flensburger Schiffbau-Gesellschaft mbH & Co. KG
which is building the two Well-Intervention Vessels under construction by the Company.
The contract between Flensburger Schiffbau-Gesellschaft mbH & Co. KG is made on arm's
length terms.
In November 2014, the Company provided a loan of EUR 15 million to Siem Industries
Inc. as part of the restructuring of Flensburger Schiffbau-Gesellschaft mbH & Co. KG. The
loan was provided to ensure delivery of the two Well-Intervention Vessels under
construction and shall be utilized to finance the yard. EUR 10 million of the funding of the
loan was provided by Helix Energy Solutions Group Inc. by way of prepayment of charter
hire for the two Well-Intervention Vessels. The loan is at market terms and matures
when the last of the two Well-Intervention Vessels have been delivered from the yard.
At the end of 2014 a short term loan of USD 60 million was drawn by the Company under
a credit facility provided by Siem Industries Inc. The short term loan is on market terms.
In June 2015, a short term loan of USD 15 million was provided by Siem Industries Inc.
to the Company. The short term loan is on market terms. The Company has currently not
drawn on the short term loan, and any undrawn portion of the USD 15 million
commitment will be cancelled, and any drawn amounts will mature, when the proceeds
from the Rights Offering has been received by the Company.
15.4
Documents on display
Copies of the following documents will be available for inspection at the Company's
offices and at the offices of Siem Offshore Management AS at Nodeviga 14, 4610
105
Kristiansand, during normal business hours from Monday to Friday each week (except
public holidays) for a period of twelve months from the date of this Prospectus.
•
The Company's Articles of Association and Certificate of Incorporation.
•
The Group's audited consolidated annual financial statement for the year ended
31 December 2014.
•
This Prospectus.
15.5
Statement regarding sources
The Company confirms that when information in this Prospectus has been sourced from a
third party it has been accurately reproduced and as far as the Company is aware and is
able to ascertain from the information published by that third party, no facts have been
omitted which would render the reproduced information inaccurate or misleading.
106
16.
DEFINITIONS AND GLOSSARY
The following definitions and glossary apply in this Prospectus unless otherwise dictated
by the context, including the foregoing pages of this Prospectus.
AHTS
Anchor-handling, tug, supply vessel.
Anti-Money
Legislation
Laundering
the Norwegian Money Laundering Act No. 11 of 6 March
2009 and the Norwegian Money Laundering Regulations
No. 302 of 13 March 2009.
Articles of Association
The memorandum and articles of association of the
Company.
Board Members
The members of the Board of Directors.
Board
Board
of
Directors
or
The board of directors of the Company.
CET
Central European Time
CLV
Cable-Lay Vessel.
COFTA
Central Office for Foreign Tax Affairs
Sentralskattekontoret for utenlandssaker).
Company
Siem Offshore Inc.
Corporate
Code
Governance
(Norwegian:
The Norwegian Code of Practice for Corporate Governance
dated 30 October 2014.
DP
Dynamically positioned.
DSND
Det Søndenfjeldske-Norske Dampskipselskap AS.
EEA
The European Economic Area.
ERD
Extended Reach Drilling.
Existing Shares
The issued Shares as of the date of this Prospectus.
Existing Shareholders
Holders of the Company’s shares as registered in the VPS
as of 18 August 2015.
EU
The European Union.
EU Prospectus Directive
Directive 2003/71/EC (and amendments thereto, including
the 2010 PD Amending Directive, to the extent
implemented in the Relevant Member State) and includes
any relevant implementing measure in each Relevant
Member State.
FCV
Fast crew vessel.
Foreign
EEA
Shareholders
Corporate
Foreign Shareholders that are corporations tax-resident
within the EEA for tax purposes.
107
Foreign
EEA
Shareholders
Personal
Non-resident Shareholders
resident within the EEA.
who
are
individuals
tax-
Forward-looking
statements
Statements made that are not historic and thereby
predictive as defined in Section 4.3.
FOS
Five Oceans Services.
FSV
Fast supply vessel.
General Meeting
The Company’s general meeting of shareholders.
Group
The Company and its subsidiaries.
HPHT
High pressure high temperature.
IFRS
International Financial Reporting Standards as adopted by
the EU.
Ineligible Shareholders
Existing Shareholders resident in jurisdictions where the
Prospectus may not be distributed and/or with legislation
that, according to the Company’s assessment, prohibits or
otherwise restricts subscription for New Shares.
ISIN
Securities number in the Norwegian Central Securities
Depository (VPS).
ISV
Installation support vessel.
Listing
The listing of the New Shares on Oslo Børs.
Management
The Group’s senior management team.
Manager
Swedbank.
MPD
Managed pressure drilling.
MPSV
Multipurpose Platform Supply Vessels.
New Shares
The 454,430,000 new Shares issued in connection with
the Rights Offering
NOK
Norwegian Kroner, the lawful currency of Norway.
Non-resident Shareholders
Shareholders who are not resident in Norway for tax
purposes.
Norwegian FSA
The Financial Supervisory Authority of Norway (Nw.:
Finanstilsynet).
Norwegian
shareholders
corporate
Norwegian
shareholders
personal
Norwegian
Trading Act
Securities
Shareholders who are limited liability companies and
certain similar corporate entities resident in Norway for
tax purposes.
Personal shareholders
purposes.
resident
in
Norway
for
tax
The Norwegian Securities Trading Act of 29 June 2007 no.
75 (Nw.: verdipapirhandelloven).
108
OCI
Other comprehensive income.
ODL
Overseas Drilling Limited.
Order
The Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 as amended.
OSCV
Offshore subsea construction vessel.
Oslo Stock Exchange
Oslo Børs ASA or, as the context may require, Oslo Børs,
a Norwegian regulated stock exchange operated by Oslo
Børs ASA.
OSRV
Oil spill recovery vessels.
OSV
Offshore support vessel.
OWF
Offshore Wind Farm.
Prospectus
This Prospectus.
Prospectus Directive
Commission Regulation (EC) No. 809/2004 implementing
Directive 2003/71/EC of the European Parliament and of
the Council of 4 November 2003 regarding information
contained in prospectuses, as amended, and as
implemented in Norway
PCD
Pressure control device.
PSV
Platform supply vessel.
QIBs
Qualified institutional buyers, as defined in Rule 144A
under the U.S. Securities Act.
Receiving Agent
DNB Markets
Record date
18 August 2015
Relevant Member State
Each Member State of the EEA which has implemented the
EU Prospectus Directive.
Rights Offering
The offering of New Shares described in this Prospectus.
Resident Shareholders
Shareholders that are residents of Norway for purposes of
Norwegian taxation.
Relevant Persons
Persons in the UK that are (i) investment professionals
falling within Article 19(5) of the Order or (ii) high net
worth entities, and other persons to whom the Prospectus
may lawfully be communicated, falling within Article
49(2)(a) to (d) of the Order.
RPCD
Unique sealing technology for the existing PCD products
and other arising applications, for example a seal to be
used from floating drilling units.
Secunda
Secunda Holdings Limited.
109
SFA
The Securities and Futures Act of Singapore.
Share(s)
Common shares in the share capital of the Company or
any one of them.
Siem Offshore
The Company and its subsidiaries
SOC
Siem Offshore Contractors GmbH.
Subscription Period
From 19 August 2015 to 16:30 hours (CET) on 2
September 2015.
Subscription Price
The subscription price for New Shares in the Rights
Offering, being NOK 1.80 per New Share.
Subscription Rights
The transferable subscription rights being issued to
holders of Existing Shares in connection with the Rights
Offering.
TAMRF
Texas A&M Research Foundation.
UBO
Underbalanced Operations.
UK
United Kingdom.
Underwriter
Underwriting Agreement
The Underwriting Agreement dated 11 August 2015
between the Company and the Underwriter.
USD
United States Dollar, the lawful currency of the United
States of America.
U.S. Exchange Act
The United States Securities Exchange Act of 1934, as
amended.
U.S. Securities Act
The United States Securities Act of 1933, as amended.
VPS
The Norwegian Central
Verdipapirsentralen).
WIV or Well-Intervention
Vessel
Well-intervention vessel.
110
Securities
Depository
(Nw.:
Appendix A: Memorandum and Articles of Association
Appendix B: Annual financial statements 2014
5
SIEM OFFSHORE INC., ANNUAL REPORT 2014
ANNUAL REPORT 2014
30
32
98
Statements of Cash Flows
Notes to the Accounts
Corporate Social Responsibility
104
28
Statements of Changes In Equity
Financial Calendar
27
Statements of Financial Position – Equity and Liabilities
103
26
Statements of Financial Position – Assets
Board of Directors
25
Income Statements
102
22
Corporate Governance
Responsibility Statement
16
Board of Director’s Report
100
14
This is Siem Offshore Inc.
Auditor’s Report
12
8
Newbuildings
Local presence in key markets 31.03.2015
6
New vessels Delivered in 2014
10
5
Highlights 2014
Fleet List March 2015
3
Key Figures
CONTENTS
6
7
(2)
58,147
5L[WYVÄ[SVZZH[[YPI\[HISL[VZOHYLOVSKLYZ
(3)
12,563
Minorities interest
3,62
(6)
(7)
(8)
(9)
(10)
(11)
Price/earnings per share (P/E)
7YPJLJHZOÅV^WLYZOHYL7*-
Book shareholders’ equity per share (USD)
Operating margin share
Book equity ratio
Liquidity ratio
4,04
0,94
0,36
0,50
2,03
1,14
0,54
0,48
*HZOÅV^WLYZOHYLPU<:+
Share price per year end (NOK)
0,15
Diluted earnings per share (USD
Share price per year end (USD)
0,15
389,144
Weighted average no. of diluted outstanding shares (1,000)
Earnings per share (USD)
387,591
2014
43,401
184,345
2014
2,260,584
Weighted average no. of outstanding shares (1,000)
(5)
(4)
5L[JHZOÅV^
Key Figures
(4)
5L[JHZOÅV^MYVTVWLYH[PVUZ
Statements of Cash Flows
;V[HSLX\P[`HUKSPHIPSP[PLZ
282,193
1,154,742
5VUJ\YYLU[SPHIPSP[PLZ
*\YYLU[SPHIPSP[PLZ
784,982
2,260,584
-17,419
Total assets
264,774
Working capital
1,995,809
Non-current assets
Current assets
12/31/14
Statements of Financial Position
12%
70,710
5L[WYVÄ[SVZZ
5L[WYVÄ[THYNPU
-2,729
15%
73,439
1,808
-12,685
;H_ILULÄ[L_WLUZL
7YVÄ[THYNPUNILMVYL[H_LZ
7YVÄ[SVZZILMVYL[H_LZ
5L[ÄUHUJPHSP[LTZ
17%
84,316
6WLYH[PUNWYVÄ[THYNPU
6WLYH[PUNWYVÄ[
368
-3,023
Gain/(loss) on currency exchange forward contracts
Gain on sale of interest rate derivatives (CIRR)
18,728
Gain/(loss) on sale of assets
40%
-125,883
Depreciation and amortization
Operating margin, %
194,125
Operating margin
(1)
491,312
-297,187
1,12
0,41
0,32
2,00
10,42
28,05
9,65
1,59
0,15
0,06
0,06
389,144
389,078
2013
-9,028
58,986
2013
1,902,702
173,584
935,231
756,628
1,902,702
21,112
194,696
1,689,886
12/31/13
6%
22,000
-456
21,544
3,585
5%
17,959
2,046
-53,349
19%
69,261
-7,756
368
29,827
-75,841
34%
122,663
-241,291
363,955
2013
Consolidated
2014
Operating expenses
Ref
Operating revenue
INCOME STATEMENTS
KEY FIGURES
31/12/2014
0-51%
47 TOTAL
44 TOTAL
40 TOTAL
34 TOTAL
55 TOTAL
55 TOTAL
45 TOTAL
42 TOTAL
32 TOTAL
27 TOTAL
Vessels in operation
44 TOTAL
40 TOTAL
34 TOTAL
27 TOTAL
47 TOTAL
45 TOTAL
42 TOTAL
32 TOTAL
55 TOTAL
55 TOTAL
:[VJR,_JOHUNLWYPJLVU+LJLTILYKP]PKLKVULHYUPUNZWLYZOHYL
:[VJR,_JOHUNLWYPJLVU+LJLTILYKP]PKLKVUJHZOÅV^WLYZOHYL :OHYLOVSKLYZ»LX\P[`KP]PKLKVUU\TILYVMV\[Z[HUKPUNZOHYLZ 6WLYH[PUNTHYNPUKP]PKLKVU^LPNO[LKH]LYHNLU\TILYVMV\[Z[HUKPUNZOHYLZ
(10) Book equity divided on total assets
*\YYLU[HZZL[ZKP]PKLKVUJ\YYLU[SPHIPSP[PLZ Definitions
,HYUPUNZILMVYLPU[LYLZ[Z[H_KLWYLJPH[PVUHUKHTVY[PaH[PVU,)0;+(
,HYUPUNZILMVYLPU[LYLZ[ZHUK[H_LZ,)0; ;V[HSJ\YYLU[HZZL[ZSLZZ[V[HSJ\YYLU[SPHIPSP[PLZ
:LL:[H[LTLU[ZVM*HZO-SV^ZMVYKL[HPSZ 5L[JHZOÅV^MYVTVWLYH[PVUKP]PKLKVU^LPNO[LKH]LYHNLU\TILYVMZOHYLZV\[Z[HUKPUN
31/12/2005
31/12/2006
31/12/2007
31/12/2008
31/12/2009
31/12/2010
31/12/2011
31/12/2012
31/12/2013
100%
5LÎ\PSKPUNZ
OWNERSHIP
31/12/2005
31/12/2006
31/12/2007
31/12/2008
31/12/2009
31/12/2010
31/12/2011
31/12/2012
31/12/2013
31/12/2014
VESSELS
8
Jun 14; Extended firm contract for scientific core-drilling vessel “Joides Resolution” by one year following the charterer’s
exercise of the second of ten annual
options.
Jun 14; Received delivery of the PSV
“Siem Giant”.
July 14; Received delivery of the OSCV
“Siem Stingray”.
Jan 14; Agreed a contract for the Platform Supply vessel (“PSV”) “Siem Atlas”
for a firm period of two years, with options
for two years to be mutually agreed, for
operations offshore Brazil.
Jan 14; Sold and delivered the 2004-built
PSV “Siddis Skipper”.
Feb 14; Ordered two well-intervention
vessels scheduled for delivery in first and
third quarter 2016. The two vessels shall
be built at the Flensburger shipyard in
Germany. Both vessels shall be chartered
to Helix Energy Solutions Group for a
firm period of seven years with options
that can extend the charter period up to
twenty-two years.
Aug 14; Entered into an agreement with
Daya Materials Bhd. (“Daya”) in August
2014 for the sale of the two 2013-built
July 14; Sold and delivered the 2007-built
PSV “Siem Sailor”.
May 14; Received delivery of the OSCV
“Siem Spearfish”.
May 14; Secunda Canada LP, which
is 50% owned by Siem Offshore, was
awarded a five-year firm contract for one
newbuild AHTS vessel. The vessel shall
be built at the Remontowa shipyard and
be delivered in fourth quarter 2015.
May 14; Agreed a charter agreement for
the Offshore Subsea Construction Vessel
(“OSCV”) “Siem Stingray”. The agreement
was made at market terms and for a firm
period of three years with two yearly
options. The charter commenced upon
delivery of the vessel from the Norwegian
yard.
Apr 14; Received delivery of the installation support vessel (“ISV”) “Siem Moxie”.
The vessel shall primarily be utilised by
SOC for project work within the submarine power cable installation, repair and
maintenance segment.
Apr 14; Siem Offshore Contractors
GmbH (“SOC”), a wholly owned subsidiary of Siem Offshore Inc. was awarded
a contract for the Nordsee One Offshore
Wind Farm.
Contracts and
vessels:
46
VESSELS IN OPERATION
1 073
EMPLOYEES
73 439
PROFIT BEFORE TAX USD 1,000
491 312
REVENUE USD 1,000
HIGHLIGHTS 2014
Dec 14; The charterer declared three
month extension until 9 June 2015 for the
PSVs “Siem Hanne” and “Sophie Siem”.
Dec 14; Received notices of termination
from Karmorneftegaz SARL in respect
of the seasonal work in Kara Sea for the
year 2015 for the two AHTS vessels “Siem
Topaz” and “Siem Amethyst” and for the
PSV “Siem Pilot”.
Dec 14; Agreed a three-year firm contract
for the OSCV “Siem N-Sea” (ex. “Siem
Stork”) with commencement 1 January
2015.
Dec 14; The OSRV “Siem Maragogi” was
delivered from a Brazilian yard in October
and commenced an eight-year contract in
December.
Nov 14; The PSV “Siem Symphony”
was delivered from a Norwegian yard in
November and commenced a four year
contract.
OSCVs “Siem Daya 1” and “Siem Daya 2”,
which are currently chartered by Daya.
Daya has been given 150 days from
August 2014 to arrange for financing of
the two vessels and delivery of the vessels is scheduled to take place latest by
mid-April 2015. The en-bloc sales price is
USD 282 million. The sale would generate
a gain, which will be recorded at the delivery of the vessels. The sales proceeds will
be used to repay mortgage debt.
5
6
Siem Symphony
– built by Hellesøy Yard, Norway, delivered 19 November 2014
Siem Giant
– built by VARD Niterói, Brazil, delivered 16 June 2014
NEW VESSELS DELIVERED IN 2014
Siem Maragogi
– built by ETP Shipyard, Brazil,
delivered 23 October 2014
Siem Stingray
– built by VARD Brattvaag, Norway, delivered 24 July 2014
Siem Spearfish
– built by VARD Brattvaag, Norway,
delivered 27 May 2014
Siem Moxie
– built by Fjellstrand, Norway,
delivered 7 April 2014
7
8
An exciting
newbuilding
program
NEWBUILDINGS
Type:
PSV
VS 4411 DF
delivery 2016
Siem TBN
Design:
delivery 2016
Siem TBN
delivery 2015
delivery 2016
Siem TBN
Siem Pride
Type:
Siem Marataizes
Design:
OSRV
delivery 2015
ULSTEIN P801
Type:
Design:
Siem Aimery
CLV
VARD CLV 01
delivery 2016
SALT 307 WIV
Design:
Type:
AHTS
UT 782Wp
delivery 2015
Design:
TBN
WIV
delivery 2016
Siem Helix 2
Type:
delivery 2016
Siem Helix 1
9
10
100%
100%
7.95 m
100%
Bollard Pull:
Ownership:
28000
0%
297 Te
0%
282 Te
28000
800 m2
60
3800 T
7.95 m
22.00 m
91.00 m
2
VS 491 CD
2010
Siem Garnet
100%
680 m2 usable
34
3570 T
6.42 m
16.60 m
73.40 m
2
VS 470 MK II
2007
Siem Hanne
100%
301 Te
28000
800 m2
60
3800 T
7.95 m
22.00 m
91.00 m
2
VS 491 CD
2010
Siem Sapphire
100%
680 m2 usable
Crane:
100%
-
100%
-
100 t Offshore/Subsea crane 100 t Offshore/Subsea crane
Ownership:
ROV Moonpool
1300 m2
110
5.000 t
6.60 m
22.00 m
120.80 m
2
STX OSCV 11L
2013
Siem Daya 2
100%
7.2 X 7.2
100%
7.2 X 7.2
250 t Offshore/Subsea crane 250 t Offshore/Subsea crane
1300 m2
110
68
1046 m2
68
1046 m2
5.000 t
6.60 m
22.00 m
120.80 m
2
STX OSCV 11L
2013
Siem Daya 1
4.500 t
6.30 m
19.70 m
Accommodation:
6.30 m
4.500 t
93.60 m
2
MT 6017 MK II
2009
Siem N-Sea
Cargo Deck Area:
19.70 m
Breadth:
Draught:
93.60 m
2
MT 6017 MK II
2009
Siem Marlin
Dwt:
LOA:
Dp Class:
Design:
Built:
34
3570 T
6.42 m
16.60 m
73.40 m
2
VS 470 MK II
2006
Siem Louisa
100%
7.2 X 7.2 m
1 X 250 t AHC, 3,000 m
1,300 m2
110
5.000 t
6.60 m
23.00 m
120.80 m
2
STX OSCV 03
2014
Siem Spearfish
Offshore Subsea Construction Vessel (OSCV) & Multipurpose field & ROV Support Vessel (MRSV)
28000
297 Te
BHP:
60
800 m2
60
800 m2
Cargo Deck Area:
3800 T
7.95 m
22.00 m
91.00 m
2
VS 491 CD
2011
Siem Opal
100%
1000 m2 usable
34
4,700 T
6.60 m
19.00 m
87.90 m
2
STX PSV 4700
2014
Siem Giant
Accommodation:
3800 T
Draught:
Dwt:
91.00 m
22.00 m
Breadth:
2
VS 491 CD
2011
Siem Amethyst
LOA:
Dp Class:
Design:
Built:
Anchor Handling Tug Supply Vessels (AHTS)
Ownership:
34
1000 m2 usable
25
4700 T
6.60m
19.00 m
980 m2
7.40 m
5,500 t
Draught:
Cargo Deck Area:
19.00 m
Breadth:
Dwt:
87.90 m
2
STX PSV 4700
2013
Siem Atlas
Accommodation:
89.20 m
2
VS 4411 DF
2014
Siem Symphony
LOA:
Dp Class:
Design:
Built:
Platform Supply Vessels (PSV)
VESSELS IN OPERATION MARCH 2015
100%
7.2 X 7.2 m
1 X 250 t AHC, 3,000 m
1,300 m2
110
5.000 t
6.60 m
23.00 m
120.80 m
2
STX OSCV 03
2014
Siem Stingray
100%
284 Te
28000
800 m2
60
3800 T
7.95 m
22.00 m
91.00 m
2
VS 491 CD
2010
Siem Aquamarine
100%
680 m2 usable
34
3570 T
6.42 m
16.60 m
73.40 m
2
VS 470 MK II
2006
Sophie Siem
VS 490 CD
2
91.00 m
22.00 m
7.95 m
3800 T
VS 491 CD
2
91.00 m
22.00 m
7.95 m
3800 T
100%
100%
Ownership:
100%
60
2.835 t
Dwt:
200 m2 usable
6.40 m
Draught:
Cargo Deck Area:
17.00 m
Breadth:
Accommodation:
74.00 m
2
SX 163 X-Bow
2014
LOA:
Dp Class:
Design:
Built:
Siem Moxie
Installation Support Vessel (ISV)
28000
310 Te
28000
306 Te
60
2010
2010
800 m2
Siem Ruby
Siem Topaz
60
51%
100%
800 m2
64
970 m2
34
4500 T
6.42 m
3570 T
680 m2 usable
20 m
approx 7.0 m
16.60 m
Other
100% owned
OSRV/FCS/FSV
Fleet of 9 vessels
Brazil 31.03.2015
100%
284 Te
28000
800 m2
60
3800 T
7.95 m
22.00 m
91.00 m
2
VS 491 CD
2010
Siem Diamond
51%
970 m2
64
4500 T
approx 7.0 m
20 m
88.3 m
2
2
88.3 m
1
2010
VS 485
2011
VS 485
2005
VS 470 MK II
73.40 m
Siem Pilot
Siddis Mariner
Siem Sasha
Large-size PSVs
50% owned
AHTS/PSV/Field support
Fleet of 6 vessels
Canada 31.03.2015
100% owned
sel (SCDV)
100%
840 m2
23
4679 T
6.30 m
19.00 m
82.85 m
2
VS 483
1996
Siem Carrier
41.3% owned
(WSV)
Scientific Core Drilling Ves- Well Stimulation Vessel
BIG ORANGE XVIII
100%
281 Te
28000
800 m2
60
3800 T
7.95 m
22.00 m
91.00 m
2
VS 491 CD
2009
Siem Emerald
100%
912 m2
20
4250 T
6.10 m
17.70 m
83.70 m
2
MT 6000
1999
Siem Supplier
JOIDES RESOLUTION
100%
285 Te
28000
800 m2
60
3800 T
7.95 m
22.00 m
91.00 m
2
VS 491 CD
2009
Siem Pearl
100%
935 m2
56
3236 T
6.18 m
19.70 m
86.20 m
2
MT 6000 MK II
2006
Hugin Explorer
11
12
Kristiansand (Norway)
Rio de Janeiro, Macaé, Aracaju (Brazil)
Leer (Germany)
Groningen (The Netherlands)
Houston (USA)
Accra (Ghana)
Perth (Australia)
Gdynia (Poland)
SIEM
SIEMOFFSHORE
OFFSHOREINC.,
INC.,ANNUAL
ANNUALREPORT
REPORT2014
2014
• St. John´s, Halifax (Canada)
Secunda Canada LP Offices
(associated company):
•
•
•
•
•
•
•
•
Siem Offshore offices:
Houston
Macaé
St. John´s
Rio de Janeiro
Halifax
Geograpical
footprint
Aracaju
LOCAL PRESENCE IN KEY MARKETS 31.03.2015
Accra
Groningen
Leer
Gdynia
Kristiansand (HQ)
Perth
12
10
6
6
12
4
1
2
2
PSVs:
AHTS:
WIVs:
OTHER:
9
VESSELS UNDER CONSTRUCTION
PSVs:
AHTS:
OSCVs:
CANADIAN FLEET:
OTHER:
46
VESSELS IN OPERATION
55
TOTAL NUMBER OF VESSELS
1073
TOTAL EMPLOYEES
13
14
SIEM
SIEMOFFSHORE
OFFSHOREINC.,
INC.,ANNUAL
ANNUALREPORT
REPORT2014
2014
S
iem Offshore had 46 vessels in
operation and 9 vessels under
construction by year-end 2014.
Vessels in operation included two
anchor handling, tug, supply vessels operated on behalf of a pool partner.
By end March 2015, the total fleet
comprised of 55 vessels, including,
among others the following owned vessels, sixteen Platform Supply Vessels
(PSVs), six Offshore Subsea Construction
Vessels (OSCVs), eight Anchor Handling,
Tug, Supply vessels (AHTS vessels), two
Well-Intervention Vessels (WIVs), one
Installation Support Vessel (ISV), one
Cable Lay Vessel (CLV) and six Canadian
flagged vessels comprising of both AHTS
vessels and PSVs. The fleet provides a
broad spectrum of services offered by a
highly experienced and competent crew
with a strong focus on Health, Safety,
Environment and Quality.
The Company’s vision is to become the
leading provider and the most attractive
employer offering marine services to the
offshore energy service industry. The
Company shall deliver quality and reliable
contracted services in a timely manner by
operation in the harshest environments.
executing cost-efficient solutions developed in active collaboration and cooperation with our customers.
Siem Offshore commenced operations
with effect from 1 July 2005. The Company is registered in the Cayman Islands
and is listed on the Oslo Stock Exchange
(OSE Symbol: SIOFF). The Company’s
headquarters is located in Kristiansand,
Norway and additional subsidiary offices
are located in Brazil, Germany, the Netherlands, Ghana, USA, Poland and Australia.
The Company is tax resident in Norway.
the increased requirements from clients and demands from
modern fleet of offshore support vessels, equipped to meet
Siem Offshore owns and operates one of the world’s most
Photographer: Arild Lillebø,
Siem Amethyst
THIS IS SIEM OFFSHORE INC.
We are driven by integrity. We step up
and take charge to fulfil given promises.
COMMITTED
We behave in a pro-active manner and
we are innovative in our way of thinking.
Continuous improvement is our key to
success.
COMPETITIVE
We encourage team spirit and knowledge
sharing. We strive to perform our daily
work correctly, safely and without causing damage to people, environment and
equipment.
CARING
business.
our present and future
are established to support
organization. The values
leaders throughout the
in particular in training of
daily life of the Company,
make the values part of the
We continuously work to
Our
Values
13 233
73 554
228 302
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
331
642
1 073
194 125
828
762
1 110
122 952
1 078
1 073
79 799
122 663
Amounts in USD 1,000
110 348
87 738
74 641
57 934
600
527
20 480
EMPLOYEES
2005 616
2006
2007
2008
2009
2010
2011
2012
2013
2014
2005
2006
OPERATING MARGIN
192 773
159 342
2008
2007
183 558
2009
2010
340 628
368 213
2011
363 955
2012
15
491 312
2013
2014
REVENUE
16
The Company’s primary activity is to own
and operate offshore support vessels
(“OSVs”) for the offshore energy service
industry. The Company is also engaged as
a contractor within the European offshore
wind farm market through its subsidiary, Siem Offshore Contractors with a
primary focus on installation, post-lay
trenching, termination and testing of
Siem Offshore is registered in the Cayman Islands and is listed on the Oslo
Stock Exchange (OSE Symbol: SIOFF).
The Company’s headquarters is located
in Kristiansand, Norway and additional
subsidiary offices are located in Brazil,
Germany, the Netherlands, Ghana, USA,
Canada, Cayman Islands and Australia.
The parent company is tax resident in
Norway.
All references to “Siem Offshore” and the
“Company” shall mean Siem Offshore Inc.
and its subsidiaries and associates unless the context indicates otherwise. All
references to “Parent” shall mean Siem
Offshore Inc. as the parent company only.
The Company
The Company holds 50% ownership in
the company Secunda Holdings Limited.
Secunda owns and operates a harshweather fleet of six offshore support vessels and is a leader in support services for
platform supply, anchor handling, rescue
standby and towage in its primary area
of operation outside the coast of Eastern
Canada.
submarine composite cables.
The OSV fleet comprises platform supply
vessels (“PSVs”), anchor-handling, tug,
supply vessels (“AHTS vessels”), offshore
subsea construction vessels (“OSCVs”)
and a variety of other service vessels. The
Company had ownership in 44 vessels
of which 9 vessels were under construction at year-end 2014. The Company also
operates two AHTS vessels on behalf of
a pool partner. These two AHTS vessels
are sister vessels to eight vessels owned
by the Company, and all ten vessels are
operated in a pool. During 2014, the total
fleet of OSVs conducted operations in the
North Sea, Arctic, West Africa, Middle
East, the U.S. Gulf, Canada and Brazil.
to be held 1 May 2015.
The financial statements for the Company
and the Parent are prepared in accord-
Financial results, Position and
Risks IFRS
In addition to the ownership and operations of OSVs, the Company’s whollyowned Brazilian subsidiary, Siem Offshore
do Brasil S.A., provides specialized
engineering to develop and implement
combat management systems for vessels
in the Brazilian navy. These activities were
part of Siem Offshore do Brasil when it
was initially acquired by the Company.
The Company holds 100% ownership in
Overseas Drilling Limited (“ODL”), which
owns the scientific ocean drillship JOIDES
Resolution. The JOIDES Resolution is one
of the primary research vessels used to
drill core samples in the ocean floor for
an international research program.
The Company holds a 60% ownership in
the subsidiary Siem WIS AS. Siem WIS
develops applications for managed pressure drilling based on a patented sealing
technology.
the shareholders for approval at the Annual General Meeting
issue by the Board on 13 April 2015 and will be presented to
financial statements and related notes were authorised for
the audited financial statements for the parent company. The
gether with the audited consolidated financial statements and
presents its report for the year ended 31 December 2014 to-
The Board of Directors of Siem Offshore Inc. (the “Board”)
THE BOARD OF DIRECTORS REPORT
The Company’s operating margin for
2014 was USD 194.1 million compared to
USD 122.7 million in 2013. Net operating margin as a percentage of operating
In 2014, the Company recorded operating revenue of USD 491.3 million and a
net profit attributable to shareholders of
USD 58.2 million, or USD 0.15 per share,
compared to operating revenue of USD
364.0 million and a net profit attributable
to shareholders of USD 22.0 million, or
USD 0.06 per share, in 2013.
Income Statement
The Company had 46 offshore vessels
in operation at year-end, including two
AHTS vessels owned by the Company’s
pool partner. The Company had 9 vessels
under construction at the end of 2014, of
which six vessels were under construction in Poland, two in Germany and one
in Brazil. These 9 vessels include one oil
spill recovery vessel (“OSRV”) scheduled
for delivery in 2015, four dual-fuel PSVs
with one for delivery in 2015 and three
in 2016, one Cable-Lay Vessel (“CLV”)
for delivery in 2016, one AHTS vessel for
delivery in 2015 and two Well-Intervention Vessels (“WIVs”) for delivery in 2016.
The Company has sold two PSVs during
2014 and taken delivery of two large
OSCVs, one PSV, one Installation Support
Vessel (“ISV”) and one OSRV. All vessels
delivered during 2014 have commenced
long-term contracts, with the ISV being
utilized by the subsidiary, Siem Offshore
Contractors.
Going-Concern
The financial statements have been
prepared under the assumption that the
Company and the Parent are going-concerns. This assumption is based on the
Company’s level of cash and cash equivalents at year-end, forecasted cash-flows,
available credit facilities and the market
value of its assets.
ance with the International Financial
Reporting Standards (“IFRS”) as adopted
by the European Union.
The Board proposes that the net loss of
the Parent of USD (64.5) million for 2014
be allocated to retained earnings and that
no dividend to be paid for 2014. As of 31
December 2014, the retained earnings
were USD 258.7 million.
The Parent company is primarily a holding company owing shares in operating
subsidiaries. The Parent Company made
an accumulated write-down of USD 49
million on the shares in the Brazilian
subsidiary and the subsidiary owning the
scientific core drilling vessel.
The Company’s net profit attributable to
shareholders was USD 58.1 million or
USD 0.15 per share (2013: USD 22.0 million, or USD 0.06 per share).
The Company’s net financial items were
net expenses of USD (12.7) million (2013:
USD (53.4) million) and includes a revaluation gain (loss) of non-USD currency
items of USD 34.1 million (2013: USD
(22.7) million) due to stronger USD during the period. Non-USD currency items
are held to match short- and long-term
liabilities, including off-balance sheet
liabilities, in similar currency.
The Company’s operating profit for
2014 was USD 84.3 million compared to
USD 69.3 million in 2013 and includes
depreciation and amortisation of USD
96.9 million (2013: USD 75.8 million).
The Company has conducted a review
of vessel valuations and has recorded
impairments of USD 29 million on certain
Brazilian-built vessels. Net currency
exchange (losses) of USD (3.0) million
(2013: USD (7.8) million) were recorded
on currency derivative contracts, of which
USD 5.6 million was unrealised. The net
gain on sale of asset was USD 18.7 million (2013: USD 29.8 million).
revenue was 40% in 2014 compared to
34% in 2013.
The gross project cost for the remaining
newbuilding program was USD 550 million at year-end 2014. Approximately USD
242 million of such future yard instalments are scheduled for payment during
2015 and USD 308 million are scheduled
for payment in 2016.
The Company paid debt instalments in
the equivalent of USD 132 million during
the year, of which USD 35 million represents extraordinary repayments due to
sales of vessels.
The gross interest-bearing debt and net
interest-bearing debt at year-end were
equivalent to USD 1.2 billion and USD 1.1
billion, respectively. The Company made
total drawings in the equivalent of USD
448 million under credit facilities during
the year. The weighted average cost of
debt for the Company was approximately
4.5% p.a. at year-end.
The Company had secured debt-financing
for eight of the nine vessels under construction at year end. The debt financing
for the AHTS vessel, to be owned by the
50% owned company Secunda, has been
agreed in April 2015.
The Company recorded USD 526 million
as gross capital expenditures in fixed assets during 2014, of which USD 497 million relates to new vessels delivered from
yards or vessels under construction, and
USD 29 million relates to project specific
investments in vessels and capitalised
dry-dockings.
Financial Position and Cash-Flows
Total equity for the Company was USD
824 million at year-end 2014 (2013: USD
794 million), and the equity ratio was
36% (2013: 42%). Shareholders’ equity
was USD 785 million (2013: 757 million),
equivalent to USD 2.03 per share (2013:
USD 1.98 per share).
The cash position at year-end was USD
118 million (2013: USD 101 million).
17
18
Liquidity risk
The Company is financed by a combination of debt and equity. If the Company
fails to repay or refinance its credit facilities, additional equity financing may be
required. There can be no assurance
that the Company will be able to repay
its debts or extend the debt repayment
Currency risk
The Company is exposed to currency risk
as revenue and costs are denominated
in various currencies. The Company
is also exposed to currency risk due to
future yard instalments in relation to
shipbuilding contracts and long-term debt
in various currencies. Forward exchange
contracts are entered into in order to
reduce the currency risk related to future
cash flows.
Interest risk
The Company is exposed to changes in
interest rates as approximately 32% of
the long-term interest bearing debt was
subject to floating interest rates at yearend 2014. The remaining part of the debt
is subject to fixed interest rates.
Financial Risks
The Company is exposed to changes in interest rates as approximately 32% of the
interest-bearing debt is based on floating
interest rates and primarily denominated
in USD and NOK. The average 3-month
USD LIBOR was 0.2337% p.a. during 2014
(0.2672% p.a. in 2013) and the average
3-month NIBOR was 1.70% p.a. during
2014 (1.75% p.a. in 2013). The Company
held USD 270 million in interest rate
swap agreements at year-end.
The Company’s cash-flows are primarily denominated in USD, NOK, EUR and
BRL. During 2014, the USD strengthened
by 22.2% to the NOK, 12.1% to the BRL
and 11.8% to EUR. The average recorded
exchange rates were NOK/USD 0.1575,
EUR/USD 1.3256 and BRL/USD 0.4240
(2013: NOK/USD 0.1700, EUR/USD
1.3300 and BRL/USD 0.4620).
The PSV fleet earned operating revenues of USD 104.4 million and had
94% utilisation (2013: USD 94.6 million
and 83%). The operating margin before
Fleet, Performance and Employment
The fleet in operation included twelve
PSVs, six OSCVs, ten AHTS vessels of
which two are owned by a pool-partner,
six offshore support vessels in Canada, a
fleet of nine crew/supply boats operated
in Brazil, one well-stimulation vessel,
one installation support vessel and one
scientific core drilling vessel.
Operations
Yard risk
The process for construction of new vessels is associated with numerous risks.
Among the most critical risk factors in
relation to such construction is the risk
of not receiving the vessels on time, at
budget and with agreed specifications. In
addition, there is the risk of yards experiencing financial or operational difficulties resulting in bankruptcy or otherwise
adversely affecting the construction
process. The Company has obtained
certain guarantees of financial compensation including refund guarantees for
vessel under construction in Poland in
case of delays and non-delivery. Further,
the Company has the right to cancel
contracts if delivery of vessels is significantly delayed. However, no assurance
can be given that all risks have been fully
covered.
schedule through re-financing of credit
facilities. There is no assurance that the
Company will not experience cash flow
shortfalls exceeding the Company’s
available funding sources or to remain in
compliance with minimum cash requirements or other covenants. Further, there
is no assurance that the Company will
be able to raise new equity or arrange
new credit facilities on favourable terms
and in amounts necessary to conduct its
ongoing and future operations should this
be required.
BOARD OF DIRECTORS’ REPORT
Siem Offshore Contractors recorded
operating revenues of USD 101.5 million.
The projects within SOC are accounted
The “Joides Resolution” recorded operating revenues of USD 25.9 million (2013:
USD 36.9 million) with an operating
margin before administrative expenses of
USD 12.9 million (2013: USD 20.4 million)
and the operating margin as a percentage
of revenue was 50% (2013: 55%).
The fleet of smaller Brazilian-flagged
vessels earned operating revenue of
USD 19.4 million and had 91% utilisation
(2013: USD 24.1 million and 92%). The
operating margin before administrative
expenses was USD (3.5) million (2013:
USD 6.7 million) and the operating margin
as a percentage of revenue was (18)%
(2013: 28%). The contract backlog was
91% for 2015, 89% for 2016 and 89% for
2017.
The eight AHTS vessels owned by the
Company earned operating revenues of
USD 142.5 million and had 84% utilisation
(2013: USD 131.9 and 86% utilization).
The operating margin before administrative expenses was USD 77.5 million (2013:
USD 67.9 million) and the operating margin as a percentage of revenue was 54%
(2013: 51%). The contract backlog was
15% for 2015 and 5% for 2016.
The OSCV fleet earned operating revenues of USD 104.8 million and had 98%
utilisation (2013: USD 41.4 million and
100%). The operating margin before
administrative expenses was USD 71.2
million (2013: USD 26.9 million) and the
operating margin as a percentage of revenue was 68% (2013: 65%). The contract
backlog was 88% for 2015, 83% for 2016
and 77% for 2017.
administrative expenses was USD 58.9
million (2013: USD 42.9 million) and the
operating margin as a percentage of revenue was 56% (2013: 45%). The contract
backlog at 31 December 2014 was 58%
for 2015, 42% for 2016 and 25% for 2017.
The Company’s target includes zero
personal injuries, no damage to the
environment and no damage to or loss of
equipment and property.
The good QHSE performance continued in
2014 with no serious incidents throughout
the fleet. The safety records for the full
year report no serious injury to personnel
QHSE
The total contract backlog of firm contracts for Siem Offshore Contractors at
31 December 2014 was USD 118 million
(2013: USD 173 million). The contract
backlog is allocated with USD 92 million
in 2015 and USD 26 million in 2016. The
contract backlog at year-end 2014 does
not include the contract value of approximately USD 70 million for Nordsee
One OWF Inner Array Grid System project,
which reached its final investment decision in March 2015, nor the Veja Mate
OWF Inner Array Grid System project in
excess of USD 100 million in contract
value awarded in April 2015.
The total contract backlog is allocated
with USD 276 million in 2015, USD 203
million in 2016 and USD 1.07 billion in
2017 and thereafter.
The total contract backlog of firm
contracts for all vessels at 31 December
2014 was USD 1.55 billion (2013: USD
1.15 billion), including the firm contract for the “JOIDES Resolution”, the
41%-ownership in the “Big Orange XVIII”,
the 50% ownership in Secunda and vessels under construction.
for using the percentage-of-completion
method. Total project margin before administrative expense of USD 17.1 million
was recognized on projects during 2014.
Subject to a forecasted positive margin,
project revenues are recorded at a similar
figure as project costs until the project
has reached minimum 25% completion. This has an impact on the overall
percentage of operating margin for Siem
Offshore on a consolidated basis.
The Valemon project has concluded the
requirement for MPD and mobilization
is estimated to commence in September 2015. Siem Offshore’s accumulated
investment in Siem WIS totals USD
The Gudrun project has been postponed
several times, but commenced drilling
in February 2015. The project might be
completed without the requirement of
MPD services.
The MPD operations on the Romeo well
commenced late October and were
completed mid-January 2015. The MPD
operation was successful and the PCD
system is temporarily demobilized due
to rig move and will be mobilized for the
Julius well in April 2015.
Siem WIS has designed and developed
a pressure control device (“PCD”) which
can improve managed pressure drilling (“MPD”) operations. Global energy
demand growth, combined with the need
for increased oil recovery and increased
number of deep sea and high pressure
high temperature (“HPHT”) reservoirs,
and greater emphasis on safety management will lead to increased demand for
MPD services.
Siem WIS
An increase is seen in number of safety
reports and the experience feedback
to the fleet is a welcomed element to
improve and ensure outstanding QHSE
performance. On board and ashore we
believe that the transfer of experience is
an important factor to create a professional QHSE culture and continuously
improve our QHSE performance.
By nature, anchor-handling is one of
the most demanding operations in the
offshore sector. Siem Offshore puts great
emphasis on a safe work environment
and appropriate time for adequate preparations for every job operation.
or discharges to the environment.
Projects
The Amrumbank West OWF project for
E.ON Kraftwerke GmbH involves the
installation, post-lay trenching, termination and testing of 86 inner array grid
submarine composite cables within the
German Bight sector of the North Sea.
The installation of the cables was split in
two campaigns. By year-end, 53 of the 86
cables were installed. All of the cables
are now installed and the project is
scheduled to be completed within second
Safety & Environment
High safety and environmental standards
have been a first priority within SOC. Risk
assessment processes and personnel
training ensures that internal personnel and subcontractors have a common
safety first mentality, which has delivered
zero loss time injuries this year. Environmental impact is a key area of importance in a market focussed on renewable
energy. SOC has developed standards to
report and analyse the impact of cable
installation activities on the environment.
Positive feedback from clients on safety
planning and execution demonstrates
strength in this area.
General
Siem Offshore Contractors (“SOC”) commenced the offshore execution during
second and third quarter 2014 on two
of its first projects within the European
offshore wind farm market. The primary
activities for SOC include the installation, post-lay trenching, termination and
testing of submarine composite cables
forming the inner array grid of an offshore
wind farm (“OWF”). SOC has been technically successful in executing its planned
work scope by utilising its fleet of large
and high quality DP-2 installation vessels, in combination with its experienced
offshore and onshore organisations.
Siem Offshore Contractors
15.6 million, whereof USD 8.8 million
is recorded as intangible assets in the
consolidated accounts.
19
20
The Nordsee One OWF project for Nordsee One GmbH involves the EPIC-based
supply and installation of 59 submarine
composite cables forming the inner array
grid of the Nordsee One OWF. The project
achieved financial close in March 2015,
whereby Canada-based Northland Power
Inc. had previously acquired an 85% share
of the project company, Nordsee One
GmbH, from the project developer RWE
Innogy GmbH in September 2014. The
project involves the supply of submarine
composite cables and related accessories
as well as cable installation, post-lay
trenching, termination and testing works
and remains on track for mechanical
completion by fourth quarter 2016. SOC
has since second quarter 2014 been
actively involved in engineering works for
this project, whereby these are scheduled
The Baltic 2 OWF project for EnBW Baltic
2 GmbH involves the installation, post-lay
trenching, termination and testing of 86
inner array grid submarine composite
cables within the German sector of the
Baltic Sea. The planned commencement of the project was delayed, but the
offshore execution became effective early
third quarter 2014 and, by year-end, 61 of
the 86 cables were installed. All cables
are now installed and the project is scheduled to be completed within third quarter
2015. A positive margin was recorded on
the project in 2014, and a positive margin
is scheduled to be recorded in 2015.
During a period of availability in between
the two campaigns for the Amrumbank
West OWF project, SOC performed cable
installation works for E.ON Climate & Renewables UK Ltd. The project involved the
successful installation of 24 inner array
grid submarine composite cables for the
client in a two month period in challenging
environmental conditions on the Humber
Gateway OWF in the United Kingdom Sector of the North Sea. The project produced
operating revenues of approximately EUR
7 million and with a positive margin.
quarter 2015 with a positive margin.
Shareholder Information
The Company’s authorised share
capital is USD 5,500,000.00 divided into
550,000,000 ordinary shares of a nominal
value of USD 0.01 each. The issued share
capital at 13 April 2015, based on the
387,591,640 Company shares issued and
Shareholders and Corporate
Governance
Market Outlook
Tendering activities increased during the
second half of 2014 and further tenders
are expected during 2015. SOC has established itself as a predictable and reliable
turnkey contractor within the offshore
renewable energy industry and further
contract awards are expected.
The Nordsee One OWF export cable
project for TenneT Offshore GmbH represents the consortium-based EPIC-based
contract for the Nordsee One export
cable system in partnership with J-Power
Systems. Commencement of the offshore
installation works is now expected to
start in the third quarter 2016, with completion scheduled in fourth quarter 2016.
No margin will be recorded on this project
in 2015.
In April 2015, SOC has been awarded the
contract by Veja Mate Offshore Project
GmbH for the EPIC-based supply and
installation of 73 submarine composite
cables with a total length of up to 97
km forming the inner array grid of the
400 MW Veja Mate OWF as located approximately. 115km off the German coast
within the German Bight sector of the
North Sea. The project involves the supply
of submarine composite cables and related accessories as well as cable installation, post-lay trenching, termination and
testing works. The offshore installation is
scheduled to commence in third quarter
2016 with mechanical completion being
scheduled for second quarter 2017.
for completion within the second quarter
2015.
BOARD OF DIRECTORS’ REPORT
The development of the onshore and offshore organizations continues in order to
prepare for increased future activities.
The knowledge of the crew is vital for a
No incidents or work-related accidents
resulted in significant material damage or
personal injury occured during the year.
The sick leave for the onshore and
offshore employees was 1.7% and 2.8%,
respectively.
The Company seeks to provide a workplace with equal opportunities. We seek to
treat current and prospective employees
fairly with respect to salaries, promotions
and recruitment. The Company offers its
employees a sound working environment.
We also give possibilities for professional
development where men and women are
treated equally and where there is no
discrimination.
The Working Environment and
the Employees
Corporate Governance
The Company has implemented guidelines
for corporate governance based on the
recommendations and guidelines given by
the Oslo Stock Exchange. The purpose of
these guidelines is to clarify the division of
roles between shareholders, the General
Meeting, Board of Directors and day-today Management beyond what follows
from the legislation. A detailed summary
of our corporate governance principles
may be found in a separate section of the
annual report.
outstanding, is USD 387,591,380 The
Company’s shares are listed on the Oslo
Stock Exchange with the ticker symbol
SIOFF. The largest shareholder of the
Company is Siem Europe S.a r.l., a whollyowned subsidiary of Siem Industries
Inc., with 34.2% of the shares at 13 April
2015. During 2014, the closing share
price reached a high of NOK 10.40, a low
of NOK 3.04, and closed at NOK 4.04 at
year-end.
David Mullen
Director
(Sign.)
John C. Wallace
Director
(Sign.)
Terje Sørensen
Chief Executive Officer
(Sign.)
Kristian Siem
Director
(Sign.)
There is a high focus on cost-cutting
among oil companies following the significant decline in the oil price. The number
of vessels trading the North Sea spot market is increasing while the activity level
is expected to decrease. We are prepared
to see a weaker market the next couple
of years, which may lead to lay-up of vessels. Scrapping of older vessels and delay
or cancellation of new vessels from yards
will contribute to a more balanced market.
Any material and sustainable increase in
the oil price will have a positive impact on
the demand for offshore support vessels.
Outlook
Eystein Eriksrud
Chairman
(Sign.)
13 April 2015
safe and secure operation of any vessel.
Such knowledge includes good seamanship and understanding of the demanding assignments to be executed. This
knowledge of capabilities and limitations
of the vessels and equipment, and respect
of circumstances that may affect a safe
execution is vital.
Michael Delouche
Director
(Sign.)
21
22
The Board of Directors has reviewed this
statement. It is the opinion of the Board
of Directors that the Company complies
Corporate Governance is subject to annual assessment and review by the Board
of Directors.
The Company endeavours to maintain
high standards of corporate governance
and is committed to ensuring that all
shareholders of the Company are treated
equally and the same information is
communicated to all shareholders at the
same time.
The Norwegian Code of Practice for Corporate Governance is publicly available
at www.nues.no in both Norwegian and
English languages. Due to new provisions
implemented in the Norwegian Accounting Act, compliance with the regulations
for Corporate Governance reporting is
now a legal requirement provided that it
does not conflict with the Cayman Islands
laws and regulations.
As a company incorporated in the Cayman
Islands, Siem Offshore Inc. is an exempted
company duly incorporated under the
laws of the Cayman Islands and subject to
Cayman Island laws and regulations with
respect to corporate governance. Cayman
Islands corporate law is to a great extent
based on English Law. In addition, due to
the Company’s listing on the Oslo Stock
Exchange, certain aspects of Norwegian
Securities law apply to the Company and
there is a requirement to adhere to the
Norwegian Code of Practice for Corporate
Governance.
The Company builds its business around a
motivated workforce with the appropriate
technical solutions. This creates sustainable value for all shareholders.
Reference is made to the Board of Directors report for detailed information.
Siem Offshore aims to become a preferred
supplier of marine services to the energy
industry based on quality and reliability
and to provide cost-efficient solutions
to its customers by understanding their
operation and applying technology and
experience.
Siem Offshore aims to grow the company
within offshore support vessels, both
organically and through combination
with other operators, in order to achieve
economies of scale and stronger presence
in the market.
Cayman Islands laws and regulation do
not require the objects clause of the Companies Memorandum and Articles of Association to be clearly defined. The Company
has however adopted clear objectives and
strategies for its business.
Business
This statement is structured in accordance with The Norwegian Code of Practice
for Corporate Governance.
with the Norwegian Code of Practice for
Corporate Governance.
Under the Articles of Association, the
Board can issue new shares, convertible
bonds or warrants at any time within the
limits of the authorized capital without
the consent of the general meeting but
with pre-emption rights for shareholders.
A General Meeting has further authorized
the Board to issue new shares without
pre-emption rights to all shareholders up
to a limit of 50% of Siem Offshore’ shares
at the time the authorization was given.
The Board holds authorization from the
Annual General Meeting held on 10 May
2010 to issue 154,248,360 new shares.
The authority gives the Board flexibility
to finance investments, acquisitions and
other business combinations on short notice through the issue of shares or certain
The Board’s mandate to increase the
Company’s share capital is limited only to
the extent of the authorized share capital
of the Company with certain pre-emption
rights for shareholders and in accordance
with the Company’s Memorandum and
Articles of Association which comply with
Cayman Island law.
The priorities for the use of Company
funds are determined by the Board of
Directors and recommendations of Management influenced by existing conditions.
At present, priorities for use of funds
in order of importance are investment
opportunities in the business, repayment
of debt and the return of capital to the
shareholders in form of share buy-back or
dividends.
Equity and Dividends
Corporate Governance” issued on the 30 October 2014.
Company are based on the “Norwegian Recommendation for
The principles for corporate governance adopted by the
Statement of Policy on Corporate Governance
CORPORATE GOVERNANCE
The Annual General Meeting of the Company will be held at the registered office
of the Company on the Cayman Islands,
1 May 2015, at 9:30am Cayman Islands
General Meetings
All of the shares in the Company carry
equal rights and are freely negotiable. The
shares are traded according to normal
market practice and no special limitations
on transactions have been laid down in the
Articles of Association.
Freely Negotiable Shares
The Company is committed to ensuring
that all shareholders of the Company are
treated equally and all the issued shares
in Siem Offshore, at nominal value US$
0.01 each, are freely tradable and carry
equal rights with no restrictions on voting.
Siem Industries Inc, which owns 34,1% of
the Company, is represented by its Chairman, Kristian Siem, Deputy CEO, Eystein
Eriksrud and President, Michael Delouche,
on the Board of Directors. The Company
pays an annual fee to Siem Industries as
compensation for directorships, provision
of an office and presence in the Cayman
Islands, and other services. The fee is
adopted by the annual general meeting
based on a recommendation from the independent Board Members. Related party
transactions are disclosed in the notes to
the accounts.
Equal Treatment of Shareholders,
Freely Tradable Shares and
Transactions with Related Parties
other equity instruments in the Company.
Furthermore, the Board considers the
granting of a new standing authority at the
time of holding an Annual General Meeting rather than convening an Extraordinary General Meeting at some future time
to be in the best interests of the Company,
as this will result in cost savings and more
effective time management for both the
Company’s senior management and its
Shareholders.
Each Board member is elected for a term
of 2 years or such shorter term as shall be
specified in the ordinary resolution pursuant to which the Director shall be appointed. Representatives of the Executive
Management are not presently members
of the Company’s Board of Directors.
The Board of Directors as a group has
extensive experience in areas which are
important to Siem Offshore, including offshore services, international shipping, ship
broking, finance and corporate governance
and restructuring.
In the nominations to the Board of Directors, the Board consults with the Company’s major shareholders and ensures
that the Board is constituted by Directors
with the necessary expertise and capacity.
There is no requirement under Cayman
Islands Law for the Company to establish
a corporate assembly.
Corporate Assembly and Board of
Directors; Composition and Independence
The appointment of a nomination committee is not a requirement under Cayman
Islands Law.
Nomination Committee
local time and Shareholders can be
represented by proxy. Notices of general
meetings and related documents are
made available to shareholders at the latest 17 days prior to meeting date. Notice
of attendance by proxy is to be provided to
either (1) the offices of Siem Offshore AS
at Nodeviga 14, P.O. Box 425, Kristiansand
4664, Norway, telefax no. +47.37.40.62.86
or (2) the Company’s office at P.O. Box
10597, George Town, Grand Cayman
KY1-1005, CAYMAN ISLANDS, telefax no.
+1.345.946.3342, not less than 24 hours
prior to the stated time of the annual
general meeting. Shareholders are given
the opportunity to vote on the election of
board members.
Internal control
A prerequisite for the Company’s system
of decentralized responsibility is that the
activities in every part of the Company
meet general financial and non-financial
requirements, and are carried out in accordance with the Company’s common
norms and values. The executive management of each subsidiary is responsible for
risk management and internal control in
the subsidiary with a view to ensuring 1)
optimalisation of business opportunities,
Risk Management and Internal Control
• Ensure the independence of the external auditor, including any additional services provided by the external auditor.
• Monitor and assess the quality of the
statutory audit of the Company’s financial statements.
• Ascertain that the internal and external
accounting reporting process are
organized appropriately and carried out
efficiently, and are of high professional
quality.
The Audit Committee consists of two
Directors. The composition of the committee meets the requirements of the
Norwegian Code of Practice for Corporate
Governance as regards independence. The
committee’s mandate can be summarized
as follows:
The Compensation Committee consists
of two Directors. The mandate of the
committee is to review and approve the
compensation of the CEO and any bonuses
to all executive personnel. Reference is
also made to section 12, Remuneration of
the Executive Management.
The Board monitors the performance
of management through regular meetings and reporting. The Company has a
Compensation Committee and an Audit
Committee.
Work of the Board of Directors
23
24
The responsibility statement of the Board
of Directors in this report and the notes
to the accounts include information about
the remuneration of the Board of Directors.
The remuneration of the Board members
reflect their experience and responsibilities, and is adopted by the annual general
meeting based on the recommendation
from the Board. The Board members do
not have share options or profit-based
remuneration.
Remuneration of the Board of
Directors
Training and further development of accounting experience within the Company
is provided locally by participating on various external courses on a regular basis.
Financial reporting process
The Company prepares and presents its
financial statements in accordance with
current IAS/IFRS rules. Financial information from subsidiaries is received each
month in a reporting package in standard format accommodated necessary
information for preparing the consolidated
financial statement for the Company.
The reporting from the subsidiaries
is extended in the year-end reporting
process to meet various requirements for
supplementary information. There are
established routines to check the financial
data in the received reporting packages
to ensure the best quality for the consolidated figures for the Company.
2) targeted, safe, high-quality and costeffective operations, 3) reliable financial
reporting, 4) compliance with current
legislation and regulations and 5) operations in accordance with the Company’s
governing documents, including ethical
and social responsibility standards. The
Company’s risk management system is
fundamental to the achievement of these
goals.
Notices to the Oslo Stock Exchange and
placements of notices and other information, including quarterly and annual
reports, may be found on the Company’s
The Company also seeks to ensure that
its accounting and financial reporting are
to the standards of our investors, and the
Company presents its financial statements in accordance with the International Financial Reporting Standards (IFRS).
The Audit Committee of the Board of
Directors monitors the company’s reporting on behalf of the Board.
The Company has a policy of treating all
its shareholders and other market participants equally, and communicates relevant
and objective information on significant
developments which impact the Company
in a timely manner.
Information and Communications
The board of director’s statement on the
remuneration of executive personnel
is presented as a separate appendix to
the agenda for the general meeting. The
remuneration statement clearly states
which aspects of the guidelines are
advisory and which, if any, are binding. The
general meeting will vote separately on
each of these aspects of the guidelines.
The Company has a Compensation Committee which reviews and approves the
compensation of the CEO and the bonuses
to all executive personnel. The Articles
of Association of the Company permit the
Board to approve the granting of share
options to employees. A long-term share
option program for 8 key employees of the
company was introduced in Q1 2013. An
additional share option program was implemented in Q2 2014 for 10 key employees of the company. The remuneration of
the CEO and the share option scheme are
disclosed in the notes to the accounts.
Remuneration of the Executive Management
CORPORATE GOVERNANCE
The Audit Committee also receives an
annual independence reporting from the
external auditor, confirming the external
auditor’s independence with respect to the
Company, within the meaning of the
Norwegian Act on Auditing and Auditors.
The confirmation also includes services
delivered to the Company other than
mandatory audit.
The auditor reports to the Audit Committee twice a year at a minimum, but more
often if necessary. During the latter half
of the year, the external auditor presents
to the Audit Committee his assessment
of risks, internal controls, risk areas and
improvement potential in control systems
and his audit plan for the following year.
The second report to the Audit Committee
is the presentation of Year-End Audit. The
external auditor presents a summary of
the audit process, including comments on
audited internal control procedures and key
issue in the financial reporting.
The Auditor of the Company is elected at
the Annual General Meeting which also
approves its remuneration. Details of the
Company’s remuneration of the external
auditor are given in the notes to the accounts.
Auditor
The shares in the Company are freely tradable and the Articles of Association of the
Company does not hold specific defence
mechanisms against take-over situations.
In a take-over situation, the Board of Directors will comply with relevant legislation.
Take-overs
website (www.siemoffshore.com). The
financial calendar for 2015 may be found
on the Company’s website under “Investor
Relations”.
Operating expenses
-18,774
-7,821
-132
-
-
-
368
-
-7,584
-12,521
-12,116
-
-
-49,000
-
368
-
-60,748
-
-4,845
-4,845
-
-
-
-4,845
-
-4,845
-
-64,448
-64,448
-
-
-
-64,448
-
-64,448
-261
-4,845
-
-64,448
-
-4,584
-
-64,448
Net currency gain/(loss)
1,219
3,001
4,842
-3,700
Attributable to shareholders of the Company
Attributable to non controlling-interest
Total comprehensive income for the year
Cash flow hedges
Items that may be subsequently reclassified to profit or loss
Items that will not be reclassified to profit or loss
Other Comprehensive income
Net profit/(loss)
COMPREHENSIVE INCOME STATEMENT
Earnings per share: Basic (and Diluted)
34,228
12,270
46,498
-11,100
-14,622
14,751
-373
14,378
-8,320
-
1,155
21,544
0.06
389,078
22,000
-456
21,544
3,585
17,959
2,046
-53,349
-22,651
-36,132
5,434
69,261
-7,756
368
29,827
-
-
-75,841
122,663
-241,291
363,955
12
12
1,510
70,710
0.15
387,591
Weighted average number of outstanding shares (1,000)
12,563
70,710
-2,729
73,439
1,808
-12,685
34,092
-55,868
9,091
84,316
-3,023
368
18,728
-
-29,000
-96,883
194,125
-297,187
491,312
2013
CONSOLIDATED
2014
58,147
22
11
7
21
3,21
3,21
4
28
12
25
4,5,6
4,5
4,5
8,18,19,20,23
4,23
Note
Attributable to shareholders of the Company
Attributable to non-controlling interest
Net profit/(loss)
Tax benefit/(expense)
Profit /(loss) before taxes
Net financial items
Financial expenses
Financial income
9,586
-7,804
4,162
-12,704
FINANCIAL INCOME AND EXPENSES
Operating profit
Gain/(loss) on currency derivative contracts
Gain on sale of interest rate derivatives (CIRR)
Gain/(loss) on sales of assets
Impairment of shares in subsidiaries
Operating margin
Operating revenue
10,953
405
2013
2014
PARENT COMPANY
INCOME STATEMENTS
25
26
-
-
983,821
-
142,854
1,039,778
-
239,922
132,068
7,340
17,343
222,579
3,447
-
840,967
840,967
799,854
799,854
41,718
47,094
28,453
-
-
30,053
752,155
741,348
Capitalized project costs
-
-
Total assets
Asset held for sale
Cash
Derivative financial instruments
Inventories
Other short-term receivables
Accounts receivable
CURRENT ASSETS
Total non-current financial assets
Long-term receivables
CIRR Loan deposit
Investment in subsidiaries
NON-CURRENT FINANCIAL ASSETS
Total non-current tangible assets
-
NON-CURRENT TANGIBLE ASSETS
Total non-current intangible assets
-
-
-
Intangible assets
Deferred tax asset
-
-
-
NON-CURRENT INTANGIBLE ASSETS
-
-
12/31/2013
-
12/31/2014
PARENT COMPANY
STATEMENTS OF FINANCIAL POSITION
ASSETS
CONSOLIDATED
24,25,29
2,10,29
15,28,29
9,14,23,29
2,29
9,14,29
12
7
6
5
5
5,17
5
11
2,260,584
-
264,774
117,623
1,041
7,481
63,877
74,753
1,995,809
72,108
23,432
28,453
20,222
-
1,885,173
10,965
1,743,693
130,515
38,528
25,937
12,591
1,902,702
18,121
194,696
101,206
-
7,555
32,737
53,198
1,689,886
69,308
6,639
41,718
20,951
-
1,579,071
11,027
1,440,332
127,711
41,507
29,737
11,770
Note 12/31/2014 12/31/2013
Other reserves
Retained earnings
-22,302
-22,302
983,821
-
120,291
1,039,778
-
106,131
-
-
155,275
397
53
277,167
147,381
210,005
7,894
-
-
67,162
-
-
8,170
2,155
1,786
67,255
4,885
4,885
-
41,718
28,453
-673
98,624
174,881
-
828,546
762,609
-146
Borrowings
-
-
Guarantees
Secured debt
Total liabilities
Other current liabilities
Taxes payable
Accounts payable
Current liabilities
Pension liabilities
Deferred CIRR
Tax liabilities
CIRR Loan
Borrowings
Non-current liabilities
LIABILITIES
Total equity
Shareholders' equity
324,612
828,546
258,675
762,609
Paid-in capital
EQUITY
526,236
526,236
12/31/2013
12/31/2014
PARENT COMPANY
26
Note
16
12
14
13,14,23
11
15,28,29
2,12,14,29
2,29
14
8
12
11
12,29
2,12,14
STATEMENTS OF FINANCIAL POSITION
EQUITY AND LIABILITIES
154,317
968,868
1,902,702
1,108,815
173,584
44,061
3,759
11,085
98,426
16,253
935,231
18,826
2,778
2,155
6,679
41,718
863,074
793,888
37,260
756,628
250,161
-19,769
526,236
12/31/2013
141,691
1,227,605
2,260,584
1,436,935
282,193
123,072
5,005
16,732
126,603
10,781
1,154,742
26,565
3,812
1,786
6,368
28,453
1,087,757
823,649
38,666
784,982
304,237
-45,491
526,236
12/31/2014
CONSOLIDATED
27
28
Equity as of December 31, 2014
Share issue costs
Share option program
Dividend paid
Buy-back of shares
Comprehensive income
Net profit
Other items, CIRR
Share issue costs
Buy-back of shares
Net profit
Other items
PARENT COMPANY
Total
Minority share of new equity Næringsbygg Idrettsveien 13 DA
Minority share of new equity Siem WIS AS
Minority share of new equity Siem Offshore Meling DA
Share issue costs
Dividends paid
Cash flow hedge
Stock option expences
Net profit to shareholders
Share issue costs
Buy-back of shares
Net profit to shareholders
Equity as of December 31, 2012 Restated
CONSOLIDATED
387,591,380
-
387,591,380
-6,333,456
3,876
-
3,876
-63
3,939
Share capital
393,924,836
387,591,380
-
387,591,380
-6 333 456
393,924,836
Total no. of shares
STATEMENTS OF CHANGES IN EQUITY
3,876
-
3,876
-63
3,939
522,360
-
522,360
-8,664
-100
-100
-100
-2,095
-11,100
9,005
-8,403
17 409
Exchange rate differences
531,025
522,361
-
522,361
-8,664
531,025
Share premium reserves
-7,249
1,155
-22,203
-22,203
-22,203
3,125
3,125
-43,396
-14,621
1,336
1,510
-
-352
-4,845
-4,845
29
30
-
258,675
-1,529
762,609
132,068
-14,150
57,270
Cash at bank as of 31 December
Cash at bank as of 1 January
Net change in cash
Net cash flow from financing activities
Proceeds from bankoverdraft
Loan from shareholder
Buyback of shares
Proceeds from share issue in partly owned subsidiaries
Dividend payment
CASH FLOW FROM FINANCING ACTIVITIES
Net cash flow from investment activities
Investments in associated companies
Investments in subsidiaries
Received from long-term loan
Proceeds from sale of fixed assets
Investment in fixed assets
Interest received
CASH FLOW FROM INVESTMENT ACTIVITIES
Net cash flow from operations
Other changes
CIRR
Changes in short-term receivables and payables
Impairment of shares in subsidiaries
Gain/(loss) on sale of assets
Result from subsidiaries
Taxes paid
Interest paid
Profit/(loss) before taxes, excluding interest
CASH FLOW FROM OPERATIONS
222,579
-
-
132,068
5,044
5,044
88,948
100,549
92,039
129,723
-
-6,533
-
-
-6,533
109,277
76,256
-
-
-
-64,816
-
-64,816
-8,728
60,000
368
-
-
368
-
-6,533
-476
828,546
-12,879
-
324,612
-
-
-8,728
-
842,471
-352
-
-6,000
-
-
-17,041
1,336
-
-11,125
-24,805
3,456
297
-236
-368
0
1,103
-
3,125
-
132
-
-368
-7,289
-
2,462
49,000
-
-
-
657
-
-
1,336
-
-
-3,777
-
5,760
2014
2013
-2,404
-
-
-5,865
-11,801
-
-3,367
2013
-56,809
2014
PARENT COMPANY
4,162
823,649
-
38,666
-6,533
-6,533
-12,201
-
-12,201
- 14,621
1,336
-11,393
2,462
-14,621
784,982
329,809
304,237
-6,533
1,510
-11,100
-
1,510
-293
2,462
-1,510
70,710
2,462
12,563
-1,510
793,888
58,147
37,260
-1,510
756,628
657
-8,728
-7,166
83
3,125
21,544
-1,943
786,397
Total equity
657
-456
36,975
58,147
250,161
22,000
22,000
-28,775
-1,943
-1,943
-8,728
749,423
225,824
-28,775
Retained earnings
Other reserves
STATEMENTS OF CASH FLOWS
12
12
7
7
25
4,5
28
31
5
5
25
7
30
Note
117,702
117,623
-26,985
101,206
43,401
316,192
-131,936
447,701
5,624
-
-
1,336
-6,533
-457,136
-12,201
278
-
-
76,290
-525,674
4,171
184,345
-11,010
-368
19,918
5,612
2,462
-
96,883
29,000
-18,728
-1,808
-
-8,957
-46,362
101,206
3,166
107,068
-9,028
184,378
-128,833
320,319
962
-
-8,728
657
-
-252,392
-14,406
90
-
-
85,998
-329,413
5,339
58,986
10,549
-368
-17,536
12,200
3,125
-
75,841
-
-29,827
-2,046
-
-9,832
-32,325
49,205
2013
CONSOLIDATED
2014
Photographer: Tove Hertzberg
31
32
Photographer: Arild Lillebø
iem Offshore owns and operates a
fleet of offshore support vessels,
including Platform supply vessels, Offshore Subsea Construction Vessels, Anchor Handling, Tug, Supply
Vessels and Well-Intervention Vessels.
Siem Offshore Inc. commenced operations
1 July 2005, and is an exempted company
under the laws of the Cayman Islands
S
1.1 General
and listed on the Oslo Stock Exchange.
The Company’s headquarters is located in
Kristiansand, Norway and the Company is
tax resident in Norway. All references to
“Siem Offshore Inc.” and “Company” shall
mean Siem Offshore Inc. and its subsidiaries and associates unless the context
indicates otherwise. All references to
“Parent” shall mean Siem Offshore Inc. as
and Well-Intervention Vessels.
a parent company only.
The principal accounting policies applied
in preparation of these consolidated and
parent financial statements are set out
below. These policies have been consistently applied to all the years presented,
unless otherwise stated.
Construction Vessels, Anchor Handling, Tug, Supply Vessels
vessels, including Platform Supply Vessels, Offshore Subsea
Siem Offshore owns and operates a fleet of offshore support
Note 1 - Accounting Principles
NOTES TO THE ACCOUNTS
(a) New standards, amendments and interpretations adopted by the Company
The following standards have been
adopted by the Group for the first time for
the financial year beginning on or after 1
1.3 Changes in accounting policy and
disclosures
Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities. In
addition, the preparation of financial statements in conformity with IFRS requires
the use of certain critical accounting
estimates. It also requires management
to exercise its judgment in the process of
applying the Company’s accounting policies. The areas involving a higher degree
of judgment or complexity or areas where
assumptions and estimates are significant
to the consolidated financial statements
are disclosed in note 3 Critical accounting
estimates and judgments.
All figures are in USD thousands, unless
otherwise stated.
The financial statements also include
any additional applicable disclosures
as required by Norwegian law and Oslo
Stock Exchange regulations. The financial
statements have been prepared under the
historical cost convention, as modified by
specific financial assets and financial liabilities, namely derivative instruments, at
fair value through profit or loss and derivative instruments designated as hedges,
which are initially at fair value through
other comprehensive income (OCI). The
financial statements have been prepared
under the assumption of going-concern.
The consolidated and parent company
financial statements are prepared in
accordance with International Financial
Reporting Standards (IFRS) and IFRS
Interpretations Committee (IFRS IC)
interpretations as endorsed by the
European Union.
1.2 Basis of preparation
Amendment to IAS 32, Financial instruments: Presentation on offsetting
financial assets and financial liabilities.
IFRIC 21, Levies sets out the accounting
for an obligation to pay a levy that is not
income tax. The interpretation addresses
what the obligating event is that gives
rise to pay a levy and when a liability
should be recognized. The Company is
not currently subject to significant levies
so the adoption impact of IFRIC 21 on the
Company is not material.
IFRS 12, Disclosures of interests in other
entities includes the disclosure requirements for all forms of interests in other
entities, including joint arrangements,
associates, structured entities and other
off-balance sheet vehicles.
IFRS 11, Joint arrangements focuses on
the rights and obligations of the parties
to the arrangement rather than its legal
form. There are two types of joint arrangements: joint operations and joint ventures.
Joint operations arise where the investors
have rights to the assets and obligations
for the liabilities of an arrangement. A
joint operator accounts for its share of the
assets, liabilities, revenue and expenses.
Joint ventures arise where the investors
have rights to the net assets of the arrangement; joint ventures are accounted
for under the equity method. Proportional
consolidation of joint arrangements is no
longer permitted. The Company was not
involved in any joint arrangements during
2014 or 2013.
January 2014:
IFRS 10, Consolidated financial statements builds on existing principles by
identifying the concept of control as the
determining factor in whether an entity
should be included within the consolidated
financial statements of the parent company. The standard provides additional
guidance to assist in the determination of
control where this is difficult to assess.
Adoption of IFRS 10 did not materially
affect the Company.
(b) New standards, amendments and
interpretations not yet adopted by the
Company
A number of new standards and amendments to standards and interpretations
are effective for annual periods beginning
after 1 January 2015, and have not been
applied in preparing the consolidated and
parent financial statements.
Amendment to IAS 39, Financial instruments: Recognition and measurement
on the novation of derivatives and the
continuation of hedge accounting. This
amendment considers legislative changes
to ‘over-the-counter’ derivatives and the
establishment of central counterparties.
Under IAS 39 novation of derivatives to
central counterparties would result in
discontinuance of hedge accounting. The
amendment provides relief from discontinuing hedge accounting when novation
of a hedging instrument meets specified
criteria. The Company has applied the
amendment and there has been no significant impact on the Company financial
statements as a result.
Amendments to IAS 36, Impairment
of assets on the recoverable amount
disclosures for non-financial assets. This
amendment removed certain disclosures
of the recoverable amount of CGUs which
had been included in IAS 36 by the issue
of IFRS 13.
This amendment clarifies that the right of
set-off must not be contingent on a future
event. It must also be legally enforceable for all counterparties in the normal
course of business, as well as in the event
of default, insolvency or bankruptcy. The
amendment also considers settlement
mechanisms. The amendment is relevant
for the Company, specifically related to
positions held in derivative contracts, but
adoption of the amendment did not have
a material effect on the financial statements.
33
34
IFRS 9 relaxes the requirements for hedge
effectiveness by replacing the bright line
hedge effectiveness tests. It requires
an economic relationship between the
hedged item and hedging instrument and
for the ‘hedged ratio’ to be the same as
the one management actually use for risk
management purposes. Contemporaneous documentation is still required but is
different to that currently prepared under
IAS 39. The standard is effective for accounting periods beginning on or after 1
January 2018. Early adoption is permitted,
dependent on EU approval. The Company
is yet to assess IFRS 9’s full impact.
The basis of classification depends on
the entity’s business model and the
contractual cash flow characteristics of
the financial asset. Investments in equity
instruments are required to be measured
at fair value through profit or loss with the
irrevocable option at inception to present
changes in fair value in OCI not recycling.
There is now a new expected credit losses
model that replaces the incurred loss
impairment model used in IAS 39. For
financial liabilities there were no changes
to classification and measurement except
for the recognition of changes in own
credit risk in other comprehensive income,
for liabilities designated at fair value
through profit or loss.
IFRS 9, Financial instruments addresses
the classification, measurement and recognition of financial assets and financial
liabilities. The complete version of IFRS
9 was issued in July 2014. It replaces the
guidance in IAS 39 that relates to the classification and measurement of financial
instruments. IFRS 9 retains but simplifies the mixed measurement model and
establishes three primary measurement
categories: for financial assets: amortized
cost, fair value through OCI and fair value
through P&L.
None of these is expected to have a significant effect on the consolidated financial
statements of the Company, except the
following set out below:
The Company applies the acquisition
method to account for business combinations. The consideration transferred for
the acquisition of a subsidiary is the fair
values of the assets transferred and the
liabilities assumed from to the former
owners of the acquirer and the equity
interests issued by the Company. The
consideration transferred includes the
fair value of any asset or liability resulting
a) Subsidiaries
Subsidiaries are entities over which the
Parent has control. The Parent controls
an entity when the Parent is exposed to,
or has rights to, variable returns from its
involvement with the entity and has the
ability to affect those returns through its
power over the entity. Subsidiaries are
fully consolidated from the date on which
control is transferred to the Company.
They are deconsolidated from the date
that control ceases.
1.4 Consolidation
There are no other IFRSs or IFRIC interpretations that are not yet effective that
would be expected to have a material
impact on the Company.
Revenue is recognized when a customer
obtains control of a good or service and
thus has the ability to direct the use and
obtain the benefits from the good or service. The standard replaces IAS 18 Revenue and IAS 11 Construction contracts
and related interpretations. The standard
is effective for annual periods beginning
on or after 1 January 2017 and earlier
application is permitted, dependent on EU
approval. The Company is assessing the
impact of IFRS 15.
IFRS 15, Revenue from contracts with
customers deals with revenue recognition
and establishes principles for reporting
useful information to users of financial
statements about the nature, amount, timing and uncertainty of revenue and cash
flows arising from an entity’s contracts
with customers.
(b) Associated companies
Associates are entities over which the
Company has significant influence but not
control, generally accompanying a shareholding of between 20% and 50% of the
voting rights. Investments in associates
are accounted for using the equity method
of accounting and are initially recognized
at cost. The Company’s investment in
associates includes goodwill identified
on acquisition. The share of profit or loss
Intercompany transactions, balances, and
unrealized gains on transactions between
Company companies are eliminated.
Unrealized losses are also eliminated.
When necessary, amounts reported by
subsidiaries have been adjusted to ensure
consistency with the policies adopted by
the Company.
If the business combination is achieved in
stages, fair value of the acquirer’s previously held equity interest in the acquiree
is remeasured to fair value at the acquisition date through profit or loss.
Any contingent consideration to be transferred by the Company is recognized at
fair value at the acquisition date. Subsequent changes to the fair value of the
contingent consideration that is deemed
to be an asset or liability is recognized in
accordance with IAS 39 either in profit or
loss or as a change to other comprehensive income. Contingent consideration that
is classified as equity is not remeasured
and its subsequent settlement is accounted for within equity.
from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed
in a business combination are measured
initially at their fair values at the acquisition date. The Company recognizes any
non-controlling interest in the acquiree on
an acquisition-by-acquisition basis, either
at fair value or at the non-controlling
interest’s proportionate share of the recognized amounts of acquiree’s identifiable
net assets. Acquisition-related costs are
expensed as incurred.
Operating segments are reported in a
manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
1.6 Segment reporting
Assets designated for long-term ownership or use and receivables due later than
one year after drawdown are classified
as non-current assets. Other assets are
classified as current assets. Liabilities
due later than one year after the end
of the reporting period are classified as
non-current liabilities. Other liabilities are
classified as current liabilities. All derivative financial instruments are classified as
current assets or current liabilities.
1.5 Classification of items in the financial statements
Unrealized gains on transactions between
the Company and its associates are
eliminated to the extent of the Company’s
interest in the associates. Unrealized
losses are eliminated unless the transaction provides evidence of an impairment of
the asset transferred. Accounting policies
of associates have been changed where
necessary to ensure consistency with the
policies adopted by the Company.
The Company’s share of post-acquisition
profit or loss is recognized in the income
statement, and its share of post-acquisition movements in other comprehensive
income is recognized in other comprehensive income with a corresponding
adjustment to the carrying amount of the
investment. When the Company’s share of
losses in an associate equals or exceeds
its interest in the associate, including any
other unsecured receivables, the Company does not recognize further losses
unless it has incurred legal or constructive
obligations or made payments on behalf of
the associate.
recorded in the consolidated financial
statements is based on the after-tax earnings of the associate.
1.2157
1.3256
1.6448
0.4240
EUR (Euros)
GBP (Pound Sterling)
REAS (Brazilian Reals)
0.4620
1.5699
1.3300
0.1700
0.4268
1.6524
1.3778
0.1643
31.12.2013
0.3765
1.5567
0.1345
31.12.14
0.1575
Average
2013
As part of the consolidation process,
exchange differences arising from the
translation of the net investment in foreign
(iii) all resulting exchange differences
are recognized in other comprehensive
income.
(ii) income and expenses for each income
statement are translated at average exchange rates (unless this average is not a
reasonable approximation of the cumulative effect of the rates prevailing on the
transaction dates, in which case income
and expenses are translated at the dates
of the transactions); and
NOK (Norwegian kroner)
Average
2014
The relevant exchange rates vs. USD are:
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using
the exchange rates prevailing at the dates
of the transactions. Foreign exchange
gains and losses resulting from the
(a) Functional and presentation currency
Items included in the financial statements
of each of the Company’s entities are
measured using the currency of the primary economic environment in which the
entity operates (the “functional currency”).
The consolidated financial statements are
presented in USD, which is the Company’s
presentation currency.
1.7 Foreign currency translation
(c) Group companies
The results and financial position of all the
Group companies (none of which have the
currency of a hyperinflationary economy)
that have a functional currency different from the presentation currency are
translated into the presentation currency
as follows:
The Company is organized into eight different segments, platform supply vessels
(“PSVs”), offshore subsea construction
vessels (“OSCVs), anchor-handling tug
supply vessels (“AHTS Vessels”), Other
Vessels in Brazil (consisting of fast crew
vessels (“FCVs”), fast supply vessels
(“FSVs”) and oil spill recovery vessels
(“OSRVs”)), Combat Management Systems
(“CMS”), Submarine Power Cable Installation, Scientific Core-Drilling and Other.
(i) assets and liabilities for each statement of financial position presented are
translated at the closing rate at the date
of that statement of financial position;
settlement of such transactions and from
the translation at year-end exchange rates
of monetary assets and liabilities denominated in foreign currencies are recognized
in the income statement line item Net
currency gain / loss.
decision-maker, who is responsible for
allocating resources and assessing performance of the operating segments, has
been identified as the executive management team consisting of the CEO, CFO,
CCO and COO.
35
36
The vessels presently owned by the
Company have an estimated economic
life of 30 years. Some components of the
vessels have a shorter economic life than
30 years. The vessels are decomposed
into different components and each component is depreciated over its estimated
economic life. Each part of a vessel that is
significant to the total cost of the vessel
is separately identified and depreciated
over that component’s useful lifetime.
Components with similar useful lives are
included in one component. The Company
has identified nine significant components
relating to its different types of vessels.
See note 5 for additional information.
Dry-docking - In accordance with IAS 16
Land and Buildings and Vessels are stated
at their historical cost less accumulated
depreciation and net of any impairment
losses. All non-current tangible assets
(excluding Land and Vessels under construction) are depreciated on a straightline basis over the estimated remaining
useful economic life of the asset. The vessel residual value is the estimated future
sales price for steel less the estimated
costs associated with scrapping a vessel.
The residual value and expected useful
life for all non-current tangible assets is
reviewed annually and, where they differ
significantly from previous estimates, the
rate of depreciation charges is changed
accordingly.
1.8 Non-current tangible assets and
maintenance costs
Goodwill and fair value adjustments arising on the acquisition of a foreign entity
are treated as assets and liabilities of the
foreign entity and translated at the closing
rate. Exchange differences arising are
recognized in OCI.
operations is recognized directly in Other
comprehensive Income (OCI). When a
foreign operation is sold, exchange differences previously recognized in OCI are
reclassified to profit or loss and included
in the gain or loss on sale.
Interest expense eligible for capitalization
is only adjusted for the effect of interest
rate or cross-currency interest rate swaps
that are designated and qualify as an accounting hedge under IAS 39. Currently
General and specific borrowing costs directly related to the acquisition, construction or production of qualifying vessels are
added to the cost of those vessels, until
such time as the vessels are substantially
ready for their intended use or sale. All
other borrowing costs are recognized in
the profit or loss in the period in which
they are incurred.
Installments on newbuild contracts are
classified as non-current tangible assets.
Direct costs related to the on-site supervision and other pre-delivery construction
costs are capitalized per vessel.
1.9 Newbuild contracts and borrowing
costs
Capitalized project cost - Certain vessel
contracts require an investment prior to
commencing the contract to fulfil requirements set by the charterer. These investments are capitalized and amortized over
the term of the specific charter contract.
Gains and losses on the sale of assets and
disposals are determined by comparing
the sales or disposal proceeds with the
net carrying amount and are included in
operating profit.
and the cost model, dry-docking costs are
a separate component of the ship’s cost at
purchase with a different pattern of benefits and are therefore initially recognized
as a separate depreciable asset. Subsequently, the cost of major renovations and
periodic maintenance costs are capitalized
as a dry-docking asset and depreciated
over the useful life of the parts replaced.
The useful life of the dry-docking costs
will be the period until the next docking,
normally between two to three years. Dayto-day maintenance costs are immediately
expensed during the reporting period in
which they are incurred.
Intangible assets that are acquired separately are measured on initial recognition
at cost. The cost of intangible assets
acquired in a business combination is
recognized at fair value at the date of
acquisition. Following initial recognition,
intangible assets are carried at cost less
1.11 Intangible assets
Prior impairments of non-financial assets
(other than goodwill) are reviewed for
possible reversal at each reporting date.
A previously recognized impairment loss
is reversed if there has been a change
in the estimates used to determine the
recoverable amount. Reversal of a previously recognized impairment is limited to
an amount that would make the carrying
value of the asset equal to what it would
have been had the initial impairment
charge not occurred.
Assets that are subject to amortization
are reviewed for impairment whenever
events or changes in circumstances
indicate that the carrying amount may
not be recoverable. An impairment loss is
recognized for the amount by which the
asset’s carrying amount exceeds its recoverable amount. The recoverable amount
is the higher of an asset’s fair value less
costs of disposal and value in use. The
recoverable amount is established individually for all assets. In assessing value
in use, the estimated future cash flows are
discounted to their present value using a
pre-tax discount rate that reflects current
market assessments of the time and the
risk specific to the asset that is considered
impaired.
1.10 Impairment of non-financial assets
Intangible assets that have an indefinite
useful life or intangible assets not ready
to use are not subject to amortization and
are tested annually for impairment.
the Company does not have any interest
rate or cross-currency swap contracts
designated as hedges.
Goodwill - Goodwill arises on the acquisition of subsidiaries and represents the
excess of the consideration transferred,
the amount of any non-controlling interest
in the acquiree and the acquisition-date
fair value of any previous equity interest
in the acquiree over the fair value of the
identifiable net assets acquired. If the total
of consideration transferred, non-controlling interest recognized and previously
held interest measured at fair value is less
than the fair value of the net assets of the
subsidiary acquired, in the case of a bar-
Intangible assets with indefinite useful
lives are tested for impairment annually
either individually or at the cash-generating unit level. Such intangibles are not
amortized. The useful life of an intangible
asset with an indefinite life is reviewed annually to determine whether the indefinite
life assessment continues to be supportable. If not, the change in the useful life
assessment from indefinite to finite is
made on a prospective basis.
any accumulated amortization and any accumulated impairment losses. Internallygenerated intangible assets, excluding
capitalized development costs, are not
capitalized and expenditure is charged
against profits in the year in which the
expenditure is incurred. The useful lives
of intangible assets are assessed to be
either finite or indefinite. Intangible assets with finite lives are amortized over
the useful economic life and assessed
for impairment whenever there is an
indication that the intangible asset may
be impaired. The amortization period and
the amortization method are reviewed
annually. Changes in the expected useful
life or the expected pattern of consumption of future economic benefits embodied
in the asset is accounted for by changing
the amortization period or method, as
appropriate, and treated as a change in
accounting estimate. The amortization expense on intangible assets with finite lives
is recognized in the income statement in
the expense category consistent with the
function of the intangible asset.
1.12.1 Classification
The Company classifies its financial
assets in the following two categories: Financial assets at fair value through profit
or loss and Loans and receivables. The
classification depends on the purpose for
1.12 Financial assets
Research and development - Research
and Development (R&D) relates to the
development of a production method for
drilling process; this R&D is part of the
Other Segment.
Goodwill impairment reviews are undertaken annually or more frequently
if events or changes in circumstances
indicate a potential impairment. The carrying value of goodwill is compared to the
recoverable amount, which is the higher of
value in use and the fair value less costs
to sell. Any impairment is recognized
immediately as an expense and is not
subsequently reversed.
Trademarks and licenses - Separately acquired trademarks and licenses are shown
at historical cost. Trademarks and licenses acquired in a business combination
are recognized at fair value at the acquisition date. Trademarks and licenses have a
finite useful life and are measured at cost
less accumulated amortization. Amortization is calculated using the straight-line
method to allocate the cost of trademarks
and licenses over their estimated useful
lives of three to seven years.
For the purpose of impairment testing,
goodwill acquired in a business combination is allocated to each of the CGUs,
or groups of CGUs, that is expected to
benefit from the synergies of the combination. Each unit or group of units to which
the goodwill is allocated represents the
lowest level within the entity at which the
goodwill is monitored for internal management purposes. Goodwill is monitored
at the operating segment level.
gain purchase, the difference is recognized
directly in the income statement.
Gains or losses arising from changes in
Regular purchases and sales of financial
assets are recognized on the trade-date –
the date on which the Company commits
to purchase or sell the asset. Investments
are initially recognized at fair value plus
transaction costs for all financial assets
not carried at fair value through profit or
loss. Financial assets carried at fair value
through profit or loss are initially recognized at fair value, and transaction costs
are expensed in the income statement.
Financial assets are derecognized when
the rights to receive cash flows from the
investments have expired or have been
transferred and the Company has transferred substantially all risks and rewards
of ownership. Loans and receivables are
subsequently carried at amortized cost
using the effective interest method.
1.12.2 Recognition and measurement
(b) Loans and receivables
Loans and receivables are non-derivative
financial assets with fixed or determinable
payments that are not quoted in an active market. They are included in current
assets, except for assets with maturities
greater than 12 months after the reporting
date. These are classified as non-current
financial assets. The Company’s loans
and receivables include accounts receivable, cash, short and long-term financial
receivables and the CIRR loan deposit.
(a) Financial assets at fair value through
profit or loss
Financial assets at fair value through
profit or loss are financial assets held for
trading. The only financial assets in this
category are derivative contracts, which
are categorized as held for trading unless
designated as hedges. Derivatives in this
category are classified as current assets.
which the financial assets were acquired.
Management determines the classification
of its financial assets at initial recognition
and re-evaluates this designation at every
reporting date.
37
38
In the statement of cash flows, cash and
cash equivalents includes cash in hand
and other short-term highly-liquid investments with original maturities of three
months or less.
Cash and cash equivalents in the Statement of cash flows excludes restricted
cash balances.
1.15 Cash and cash equivalents
Lubricating oil and bunkers inventories are
valued at the lower of cost and net realizable value. Cost is determined using the
weighted average cost method. Bunkers
and lubricating oil inventories are an integral part of the vessel, and not sold separately. Net realizable value is estimated
based on commodity market prices.
1.14 Inventories
Financial assets and liabilities are offset
and the net amount reported in the
balance sheet when there is a legally
enforceable right to offset the recognized
amounts and there is an intention to settle
on a net basis or realize the asset and settle the liability simultaneously. The legally
enforceable right must not be contingent
on future events and must be enforceable in the normal course of business
and in the event of default, insolvency
or bankruptcy of the company or the counterparty. The Company has evaluated all
of their derivative contract positions and
does not currently have the right to offset
the contracts, and therefore reports all
derivative positions at gross amounts.
1.13 Offsetting financial instruments
the fair value of the ‘financial assets at fair
value through profit or loss’ category are
presented in the income statement within
Operating profit as Gain/(Loss) on currency currency derivative contracts and
within net financial items for the interest
rate and cross currency swap derivative
contracts. See for note 21 for additional
information.
Borrowings are recognized initially at fair
value, net of transaction costs incurred
and are subsequently stated at amortized
cost. Any difference between the proceeds
(net of transaction costs) and the redemption value is recognized in the income
statement over the period of the borrowings using the effective interest method.
Borrowings are classified as current
liabilities unless the Company has an
unconditional right to defer settlement of
1.18 Borrowings
Ordinary shares are classified as equity.
Incremental costs directly attributable
to the issue of new shares or options are
shown in equity as a deduction, net of tax,
from the proceeds. When any Company
entity purchases its own shares, the
consideration paid, including any directly
attributable incremental costs (net of
income taxes), is deducted as appropriate
from share capital and share premium
reserve and the shares are cancelled.
1.17 Share capital
Accounts receivable are recognized
initially at fair value and subsequently
measured at amortized cost, less provision for impairment. The interest factor
for accounts receivable is considered to
be insignificant and therefore not included
in the measurement of amortized cost. In
the case of an objective evidence of a fall
in value, the difference between reported
value and the present value of the expected net future cash flows is reported
as a loss.
Provisions for losses are recognized
when there are objective indicators that
the Company will not receive settlement
in accordance with the original contract
terms. Significant financial problems
facing the customer, probability that the
customer will go bankrupt or undergo financial restructuring, postponements and
non-payment are regarded as indicators
that the customer receivable is impaired.
1.16 Accounts receivable
Tax expense/benefit includes current
taxes and the change in deferred taxes.
Deferred income tax is provided for all
temporary differences between the
book value and the tax basis of assets
and liabilities and for tax losses carried
forward. Deferred tax assets made probable through prospective earnings that
can be utilized against the tax reducing
temporary differences are recognized as
intangible assets. Deferred tax assets and
deferred tax liabilities are recognized independently of when the differences will be
reversed and, as a rule, at nominal value.
Deferred tax assets and tax liabilities are
measured on the basis of estimated future
tax rate.
Part of the Company’s activities under the
Norwegian subsidiaries are structured to
be in compliance with the regulations for
the Norwegian Tonnage Tax Regime. The
Company has estimated a tax rate of 0%
for the companies subject to Norwegian
Tonnage Tax Regime. Financial income
The tax expense for the period comprises
current and deferred tax. Tax is recognized
in the income statement, except to the
extent that it relates to items recognized
in other comprehensive income or directly
in equity. In this case, the tax is also recognized in other comprehensive income or
directly in equity, respectively.
1.20 Taxation
The Company has applied for three
Commercial Interest Reference Rate
(CIRR) loans from the Norwegian Export
Credit Agency. The duration of the loans
is 12 years and the cash proceeds from
the loans have been deposited in a fixed
deposit account with a Norwegian bank at
the same interest rate as the loans. The
agreed periods of the deposits are identical with the periods of the loans.
1.19 Commercial Interest Reference
Rate (CIRR) loan
the liability for at least 12 months after
the reporting date.
Deferred income tax assets and liabilities
are offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when
the deferred income taxes assets and
liabilities relate to income taxes levied by
the same taxation authority on either the
Deferred income tax assets are recognized on deductible temporary differences
arising from investments in subsidiaries
and associates only to the extent that it
is probable the temporary difference will
reverse in the future and there is sufficient
taxable profit available against which the
temporary difference can be utilized.
Deferred income tax liabilities are provided on taxable temporary differences arising from investments in subsidiaries and
associates, except for deferred income tax
liability where the timing of the reversal
of the temporary difference is controlled
by the Company and it is probable that
the temporary difference will not reverse
in the foreseeable future. Generally the
Company is unable to control the reversal
of the temporary difference for associates.
Deferred income tax is recognized on
temporary differences arising between
the tax bases of assets and liabilities and
their carrying amounts in the consolidated
financial statements. Deferred income tax
is determined using tax rates (and laws)
that have been enacted or substantively
enacted by the balance sheet date and
are expected to apply when the related
deferred income tax asset is realized or
the deferred income tax liability is settled.
Deferred income tax assets are recognized only to the extent that it is probable
that future taxable profit will be available
against which the temporary differences
can be utilized.
within the regime is taxable at a rate of
27%. For companies not included in the
tonnage tax regime, the Company applies a tax rate of 27%. The tax expense
consists of taxes payable and changes in
deferred tax assets/liabilities.
The Company enters into derivative instruments, primarily foreign currency contracts and interest rate swaps, to hedge
1.22 Derivative financial instruments
and hedging activities
Actuarial gains and losses arising from
experience adjustments and changes in
actuarial assumptions are charged or
credited to equity in other comprehensive
income in the period in which they arise.
The effective portion of changes in the fair
value of derivatives that are designated
The fair values of the foreign currency
derivative instruments used for hedging
purposes are disclosed in note 15. Movements on the hedging reserve in other
comprehensive income are shown in note
15. The full fair value of a hedging derivative is classified as a non-current asset or
liability when the remaining hedged item
is more than 12 months, and as a current
asset or liability when the remaining
maturity of the hedged item is less than
12 months.
Management designates certain derivatives as hedges of a particular risk
associated with a highly probable forecast
transaction (cash flow hedge), specifically the contractual future sales related
to vessels chartered by the Brazilian
subsidiary. The Brazilian entity documents
at the inception of the transaction the
relationship between the foreign currency
derivatives (hedging instrument) and the
hedged items (highly probable future
sales), as well as its risk management objectives and strategy for undertaking the
various hedging transactions. The entity
also documents its assessment, both at
hedge inception and on an ongoing basis,
of whether the derivatives that are used in
the hedging transactions are highly effective in offsetting changes in fair values or
cash flows of hedged items.
The liability recognized in the statement
of financial position relating to defined
benefit plans is the present value of the
defined benefit obligation at the end of
the reporting period less the fair value
of the pension fund assets. The defined
benefit obligation is calculated annually
by an independent actuary on the basis of
a linear model. The present value of the
defined benefit obligation is determined
by discounting the estimated future cash
outflows based on the interest rate for
Norwegian government bonds. Since
Norwegian government bonds are not
issued for terms exceeding 10 years, a
supplement to this bond rate is calculated
by means of estimation techniques to
establish a discount rate that is approximately the same as the term of the pension obligation.
Past service costs are recognized
immediately in income.
Derivatives are initially recognized at fair
value on the date a derivative contract
is entered into and are subsequently remeasured at their fair value. The method
of recognizing the resulting gain or loss
depends on whether the derivative is designated as a hedging instrument, and if so,
the nature of the item being hedged.
foreign currency exposures, for example
related to operating expenses and vessel
purchase commitments, and interest rate
exposures primarily related to long-term
borrowings. These derivatives are not
designated as accounting hedges.
The Company has a defined benefit plan
for its employees in Norway. The pension
scheme is financed through contributions
to insurance companies or pension funds.
A defined benefit plan defines the amount
of pension benefit that an employee will
receive on retirement, usually dependent
on one or more factors such as age, years
of service and compensation.
1.21 Pension costs and obligations
same taxable entity or different taxable
entities where there is an intention to settle the balances on a net basis.
39
40
Charter rate contracts
Charter contracts are classified as operating leases under IAS 17. Revenue derived
from charter contracts is recognized in the
period over the lease term on a straightline basis. Related services are recog-
The Company’s activity is to employ different types of offshore support vessels,
including PSVs, OSCVs, AHTS vessels,
OSRVs, standby vessels and crew-boats
and one scientific core-drilling vessel.
In addition, the Company holds interest in one limited liability partnership
with ownership in one well-stimulation
vessel. In one of the subsidiaries of the
Company, revenues are partly generated
from income from construction contracts.
Revenue comprises the fair value of the
consideration received or receivable for
the sale of goods and services in the
ordinary course of the Company’s activities. Revenue is shown net of value-added
tax, withholding tax, returns, rebates and
discounts and after elimination of sales
within the Company. Revenue is recognized as follows:
1.23 Revenue recognition
Amounts accumulated in equity are
reclassified to profit or loss in the periods
when the forecast sale that is hedged
takes place. When a hedging instrument expires or is sold, or when a hedge
no longer meets the criteria for hedge
accounting, any cumulative gain or loss
existing in equity at that time remains in
equity and is recognized when the forecast
transaction is ultimately recognized in the
profit or loss. When a forecast transaction is no longer expected to occur, the
cumulative gain or loss that was reported
in equity is immediately transferred to
the income statement within Operating
Margin.
and qualify as cash flow hedges is recognized in other comprehensive income.
The gain or loss relating to the ineffective
portion is recognized immediately in the
income statement.
In the beginning phase of a project, the
profit on a contract is not able to be estimated reliably until progress has reached
at least 25% completion. Therefore, until
an estimate of 25% complete is possible,
only contract expenses are recognized,
but no profit margin. Contract costs are
recognized as expenses by reference to
the stage of completion of the contract
activity at the end of the reporting period.
When it is probable that a project will gen-
Construction contracts
The Company accounts for long-term construction, engineering and project management contracts on the percentage-ofcompletion basis as costs are incurred.
Under this method, when the outcome of
a construction contract can be estimated
reliably and it is probably that the contract
will be profitable, contract revenue is recognized over the period of the contract by
reference to the stage of completion.
Vessels without signed contracts in place
at discharge have no revenue until the
signing of a new contract. Charter-related
expenses for vessels during idle time are
expensed as incurred.
Revenues from time charters and bareboat charters accounted for as operating
leases are recognized over the rental
periods of such charters, as service is
performed on a straight-line basis. Certain
contracts include mobilization fees payable at the start of the contract, and are
recognized as revenue in the mobilization period until contract commencement. In cases where the fee covers
specific upgrades or equipment specific
to the contract, the mobilization fees are
recognized as revenue over the estimated
contract period. The related investment is
depreciated over the estimated contract
period. In cases where the fee covers
specific operating expenses at the start
of the contract, the fees are recognized in
the same period as the expenses.
nized as revenue in accordance with the
services being rendered.
Earnings per share are calculated by dividing the net profit/loss for shareholders
of the Company by the weighted average
1.25 Earnings per share
Accounts payables are obligations to
pay for goods or services that have been
acquired in the ordinary course of business from suppliers. Accounts payable are
classified as current liabilities if payment
is due within one year or less (or in the
normal operating cycle of the business
if longer). If not, they are presented as
non-current liabilities. Accounts payable
are recognized initially at fair value and
subsequently measured at amortized cost
using the effective interest method.
1.24 Accounts payable
Rendering of services
Service revenue is generally recognized
when a signed contract or other persuasive evidence of an arrangement exists,
the service has been provided, the fee is
fixed or determinable and collection of
resulting receivables is reasonably assured. Other services are recognized on a
percentage-of-completion basis.
Dividend income
Dividend income is recognized when the
right to receive payment is established.
Interest income
Interest income is recognized using the effective interest method. When a receivable
is impaired, the Company reduces the carrying amount to its recoverable amount,
which is determined as the estimated
future cash flow discounted at original effective interest rate of the instrument and
continues unwinding the discount as interest income. Interest income on impaired
loans and receivables is recognized using
the original effective interest rate.
erate a loss (total contract costs are expected to exceed total contract revenue),
the total estimated loss is recognized as
an expense immediately.
Leases in which a significant portion of
the risks and rewards of ownership have
not been transferred to the Company are
classified as operating leases. Payments
made under operating lease agreements
are classified in the income statement
as operating expenses and recognized
straight-line over the period of the lease.
1.29 Operating leases
Grants relating to net wages arrangement
in Norway are recognized as a reduction of
wage cost.
1. 28 Government grants
All transactions, agreements and business activities with related parties are
determined on an arm’s length basis in a
manner similar to transactions with third
parties.
1.27 Related party transactions
The Statements of cash flows are
prepared in accordance with the indirect
method.
1.26 Statement of Cash Flows
number of outstanding shares over the
reporting period. Diluted earnings per
share include the effect of the assumed
conversion of potentially dilutive instruments such as employee stock options.
The impact of share equivalents is computed using the treasury stock method for
stock options.
At the end of each reporting period, the
Company revises its estimates of the
number of options that are expected to
vest based on the non-market vesting
conditions. It recognizes the impact of the
revision to original estimates, if any, in the
income statement, with a corresponding
adjustment to equity. Each option gives
the holder the right, but not the obligation,
to acquire one share at the exercise price
The total amount to be expensed is
determined by reference to the fair value
of the options granted at grant date, as
determined using a Black-Scholes model.
Exercise price is the stock price at date of
The total expense is recognized over the
vesting period, which is the period over
which all of the specified vesting conditions are to be satisfied. The only condition
for vesting is employment with the Company; options vest over a five-year period
after grant date.
The Company operates an executive
management equity-settled, sharebased compensation plan, under which
the entity receives services from ten top
management employees (eight in 2013)
as consideration for equity instruments
(share-options) of the Company. The fair
value of the employee services received
in exchange for the grant of the options is
recognized as an Operating Expense. For
additional information see note 31 Sharebased payments.
1.30 Share-based payments
The social security contributions payable
in connection with the grant of the share
options is considered an integral part of
the grant itself, and the charge will be
treated as a cash-settled transaction.
The grant by the Company of options over
its equity instruments to the employees of
subsidiary undertakings in the Company
is treated as a capital contribution. The
fair value of employee services received,
measured by reference to the grant date
fair value, is recognized over the vesting
period as an increase to investment in
subsidiary undertakings, with a corresponding credit to equity in the parent
entity accounts.
When the options are exercised, the Parent issues new shares or re-issues treasury shares. The proceeds received net of
any directly attributable transaction costs
are credited to share capital (nominal
value) and share premium.
on the terms and subject to the conditions
set out in the Stock Option Plan.
41
42
297,187
194,125
Operating expenses
Impact on operating result before tax
-27,807
Total increase/ decrease before tax
-27,807
-16,537
440
10,274
-21,985
-27,807
1,866
-18,284
20,149
-34,580
-51,399
18,402
-1,583
4,907
1,292
-
3,614
Equity
25,193
16,537
-440
-10,274
19,371
25,193
-1,866
18,284
-20,149
31,966
51,399
-21,016
1,583
-4,907
-1,292
-
-3,614
Profit/(loss)
25,193
16,537
-440
-10,274
19,371
25,193
-1,866
18,284
-20,149
31,966
51,399
-21,016
1,583
-4,907
-1,292
-
-3,614
Equity
-10% movements
Financial assets in 2014 include derivatives related to hedging of foreign exchange risks. The derivatives in the sensitivity table include
pathdependent options in which the value of the derivatives is influenced when the underlying reaches or fluctuates within,
below or above specific barrier levels. The change in value of these derivatives will impact the profit of the Company.
Financial liabilities in 2014 and 2013 consist of interest rate derivatives and are not influenced by movements in foreign exchange rates,
and therefore not included in the table.
440
-16,537
BRL
10,274
GBP
-21,985
EUR
-27,807
1,866
-18,284
20,149
-34,580
-51,399
18,402
-1,583
4,907
1,292
-
3,614
Profit/(loss)
NOK
Allocation per currency
Total increase/decrease before tax
491,312
Operating revenue
Income statement
1,214,360
1,241,873
Impact on financial liabilities before tax
16,732
10,781
193,417
74,753
1,041
117,623
Carrying
amount
Foreign exchange risk rate 10%
USD is the reporting currency for the
Company. Functional currency for the
parent company and vessel-operating
subsidiaries is USD, except for one of the
Norwegian subsidiary where NOK is the
functional currency, and the Brazilian
2.2 Foreign exchange risks
+10% movements
assesses its primary financial and market
risks. Once risks are identified, appropriate
action is taken to mitigate the identified
risk. The Company’s risk management is
exercised in line with guidelines approved
by the Board.
Borrowings
Derivatives
Accounts payable
Financial liabilities
Impact on financial assets before tax
Accounts receivable
Derivatives
Cash and cash equivalent
Financial assets
December 31, 2014
CONSOLIDATED
The Company is exposed to a variety
of financial risks through its ordinary
operations and debt financing. Such risks
include foreign exchange risk, interest rate
risk, credit risk and liquidity risk. To manage these risks, management reviews and
2.1 Financial risk factors
Note 2 - Financial Risk Management
988,838
Borrowings
241,291
122,663
Operating expenses
-60,250
2,079
450
-11,569
-69,290
EUR
GBP
BRL
-69,290
-2,401
-19,235
16,834
-72,016
-36,253
-33,797
-1,966
5,126
2,653
-
2,473
Profit/(loss)
NOK
363,955
Operating revenue
Income statement
11,085
961,500
Derivatives
16,253
154,404
53,198
-
101,206
Carrying
amount
64,836
11,570
-450
-2,079
55,797
64,836
2,401
19,235
-16,834
67,562
36,253
29,343
1,966
-5,126
-2,653
-
-2,473
Profit/(loss)
64,836
11,570
-450
-2,079
55,797
64,836
2,401
19,235
-16,834
67,562
36,253
29,343
1,966
-5,126
-2,653
-
-2,473
Equity
-69,290
-11,569
450
2,079
-60,250
-69,290
-2,401
-19,235
16,834
-72,016
-36,253
-33,797
-1,966
5,126
2,653
-
2,473
Equity
-10% movements
tion regarding these contracts is set out
in Note 2.5 and Note 17.
The Company is exposed to foreign
exchange risk of its subsidiaries, including
the development of the Brazilian Real.
The following sensitivity table demonstrates the impact on the Company’s
profit and equity before tax from potential
changes to the exchange rates, all other
variables held constant.
+10% movements
mainly USD, NOK, EUR and BRL revenue
and expenses.
At year end, the Company had one shipbuilding contract with a Brazilian yard for
the construction of one OSRV, shipbuilding contracts with a Polish yard for the
construction of four PSVs and one CLV
and shipbuilding contracts with a German
yard for construction of two WIVs. The
contract with the Brazilian yard is in USD,
the contracts with the Polish- and German yards are in EUR. Further informa-
Accounts payable
Accounts receivable
Derivatives
Financial assets
December 31, 2013
CONSOLIDATED
subsidiary where BRL is the functional
currency. Remaining subsidiaries use
NOK and EUR as functional currency. The
Company operates internationally and is
exposed to foreign exchange risks arising
from various currency exposures primary
with respect to NOK, GBP, EUR and BRL.
Foreign exchange risks can be divided into
transaction risk from paying and receiving
foreign currency and translation risk due
to recognizing assets and liabilities in
USD. The Company had in 2014 and 2013
43
44
174,934
-
23
GBP
-6,273
1,916
-8,212
-6,273
-1,156
-1,156
EUR
-12,116
12,521
-20,334
-20,334
-
-1
15,217
-
15,217
Profit/
(loss)
NOK
Operating expenses
Operating revenue
405
174,881
Borrowings
Income statement
-
53
222,579
-
222,579
Carrying
amount
Derivatives
Accounts payable
Accounts receivable
Financial assets
December 31, 2014
PARENT COMPANY
-6,273
23
1,916
-8,212
-6,273
-1,156
-1,156
-
-20,334
-20,334
-
-1
15,217
-
15,217
Equity
+10% movements
6,273
-23
-1,916
8,212
6,273
1,156
1,156
-
20,334
20,334
-
1
-15,217
-
-15,217
Profit/(loss)
6,273
-23
-1,916
8,212
6,273
1,156
1,156
-
20,334
20,334
-
1
-15,217
-
-15,217
Equity
-10% movements
-7,946
-
-7,946
Profit/(loss)
-7,946
-
-7,946
Equity
99,021
Borrowings
18,774
-7,821
Operating expenses
36
GBP
-7,298
-10
-7,324
EUR
-7,298
-1,191
-1,189
-2
-14,053
-14,034
-
-19
NOK
10,953
Operating revenue
Income statement
-
98,624
Derivatives
397
7,298
-36
10
7,324
7,298
1,191
1,189
2
14,053
14,034
-
19
7,298
-36
10
7,324
7,298
1,191
1,189
2
14,053
14,034
-
19
-7,298
36
-10
-7,324
-7,298
-1,191
-1,189
-2
-14,053
-14,034
-
-19
45
46
-
Others
Total accounts receivables
3,447
-
Others
-
3,447
6 to 10 largest
1 to 5 largest
Receivables on December 31, 2013
USD
-
-
6 to 10 largest
USD
100%
-
-
100.0 %
% of total
-
-
-
-
% of total
PARENT COMPANY
rivative positions are regarded as limited.
The exposure to credit risk for trade and
other short term receivables is measured
on an ongoing basis and credit evaluations
are performed for customers identified
to be risky. The Company’s debtors are
mainly major oil companies and offshore
service companies, which are considered
to be creditworthy third parties. Histori-
1 to 5 largest
Receivables on December 31, 2014
7,946
-
7,946
Equity
Concentration risks
The Company’s credit risk is primarily
attributable to its trade and other shortterm receivables and asset derivative
positions. The derivative counterparties
are large established financial institutions,
and the counterparty risk for the asset de-
2.3 Credit risks
Accounts payable
7,946
-
7,946
Profit/
(loss)
-10% movements
135,514
3,447
132,068
Carrying
amount
+10% movements
Accounts receivable
Financial assets
December 31, 2013
PARENT COMPANY
53,198
2,909
17,978
32,311
USD
74,753
8,020
16,279
50,454
USD
100%
5.5 %
33.8 %
60.7 %
% of total
100%
10.7 %
21.8 %
67.5 %
% of total
CONSOLIDATED
cally, the loss percentage has been low.
Ongoing provisions are made and, on
December 31, 2014, the provision for certain accounts receivables which may not
be paid in full was USD 9.5 million for the
Company (2013: USD 7.0 million) and USD
751K for the Parent (2013: USD 0K).
The table below presents the
concentration risks for 2014 and 2013.
-
-
-
Due 1-4 months
Due more than 4 months
-
100%
100.0 %
53,198
6,276
3,045
-
-
-
-
-
-
NOK
EUR
GBP
BRL
3,447
-
-
-
-
3,447
2013
PARENT COMPANY
2014
USD
Currency
5.7 %
53,198
3,391
2,015
10,999
10,123
26,670
2013
CONSOLIDATED
100%
11.8 %
74,753
2,984
2,386
5,606
1,947
61,830
2014
The carrying amount of the Company’s and Parent’s accounts receivables are denominated in the following currencies:
3,447
47
48
-4,898
-3,886
-3,886
-1,012
-1,012
Profit/(loss)
1,513
2,689
2,689
-1,176
-1,176
Profit/(loss)
-4,898
-3,886
-3,886
-1,012
-1,012
Equity
-1% movements
1,513
2,689
2,689
-1,176
-1,176
Equity
-1,144
-2,320
-2,320
1,176
1,176
Equity
4,362
3,350
3,350
1,012
1,012
Profit/(loss)
4,362
3,350
3,350
1,012
1,012
Equity
+1% movements
Interest rate risk (IR)
-1,144
-2,320
-2,320
1,176
1,176
Profit/(loss)
+1% movements
Borrowings in the tables above (both for 2014 and 2013) include only borrowings with floating interest.
Above movements also include the effect of interest rate swaps entered into in order to hedge the floating interest risk. Market-to-market effects in relation to the interest rate swaps impacts the profit and loss following a change of +/- 1% in the interest rate.
For more details, see Note 12
629,221
629,221
Borrowings
101,206
101,206
Carrying
amount
668,772
668,772
117,623
117,623
Carrying
amount
In the event of insolvency, liquidation
or similar event relating to a subsidiary
of the Company, all creditors of such
subsidiary would be entitled to payment
in full out of the assets of such subsidiary
before the Company, as a shareholder,
would be entitled to any payments. Defaults by, or the insolvency of, a subsidiary
of the Company could result in the obligation of the Company to make payments
-1% movements
of its loan agreements or avoid net cash
flow shortfalls exceeding the Company’s
available funding sources or comply with
minimum cash requirements. Further,
there can be no assurance that the
Company will be able to raise new equity,
or arrange new borrowing facilities, on
favourable terms and in amounts necessary to conduct its ongoing and future
operations, should this be required.
Financial assets
December 31,
2013
CONSOLIDATED
-
3,447
Due more than 4 months
51.4 %
31.0 %
Due 1-4 months
16,511
27,365
-
-
-
-
Borrowings
Financial assets
December 31, 2014
Due up to 1 month
% of total
100%
25.6 %
16.6 %
19.8 %
38.0 %
% of total
Not due
USD
74,753
19,128
12,409
14,823
28,392
USD
CONSOLIDATED
% of total
-
-
-
-
-
% of total
CONSOLIDATED
The Company is financed by debt and
equity. If the Company fails to repay or
refinance its loan facilities, additional equity financing may be required. There can
be no assurance that the Company will
be able to repay its debts or extend repayment schedules through re-financing
2.4 Cash flow, interest risk and
fair value
Aging on December 31, 2013
USD
-
Due up to 1 month
-
USD
Not due
Aging on December 31, 2014
PARENT COMPANY
Trade and receivables
The table below presents an aging analysis of the outstanding receivables at year end 2014 and 2013.
Overdue receivables are followed up continually by Management.
The Management considers the outstanding amounts to be recoverable.
At year end 2014 the receivables were significantly higher than as for 2013. This was caused by sanctions affecting,
receivables from the Kara-Sea project.
Payments from Petrobras in Brazil was delayed due to formal approval requirements. The majority of these receivables have been
paid in Q1 2015. The maximum exposure to credit risk at the reporting date is the carrying value of each class of accounts receivables
mentioned above.
132,068
98,624
98,624
Borrowings
132,068
Financial assets
December 31, 2013
PARENT COMPANY
Carrying
amount
174,881
174,881
Borrowings
222,579
222,579
Carrying
amount
-335
986
986
-1,321
-1,321
Profit/(loss)
-477
1,749
1,749
-2,226
-2,226
Profit/(loss)
-335
986
986
-1,321
-1,321
Equity
-1% movements
-477
1,749
1,749
-2,226
-2,226
Equity
-1% movements
The following sensitivity tables demonstrate the impact on the Company’s
profit before tax and equity from a
potential shift in interest rates, all other
variables held constant.
Cash and cash equivalents are invested
for short maturity periods, generally
from 1 day to 3 months, which mitigates
the potential interest rate risk.
Financial assets
December 31, 2014
PARENT COMPANY
The Company is moreover exposed to
changes in interest rates, which may affect
the Company’s financial results. These
risks are mainly related to the Company’s
long term borrowings with floating interest
rates. Further details of the Company’s
borrowings are set out in Note 12.
under parent company guarantees issued
in favour of such subsidiary.
477
-1,749
-1,749
2,226
2,226
Equity
335
-986
-986
1,321
1,321
Equity
335
-986
-986
1,321
1,321
Profit/(loss)
+1% movements
477
-1,749
-1,749
2,226
2,226
Profit/(loss)
+1% movements
49
50
74,753
63,877
Accounts receivables
10,781
16,732
Accounts payable
Total
1,419,963
123,072
26,565
28,453
1,214,360
309,179
117,623
CIRR loan
Borrowings
Total
1,041
23,432
28,453
CIRR loan deposit
Book value
1,458,111
123,072
16,732
10,781
26,565
30,114
1,250,847
310,840
117,623
1,041
63,877
74,753
23,432
30,114
Fair value
12/31/2014
Because of the short term to maturity, the
value of cash and cash equivalents entered
into the Statements of Financial Position is
almost the same as the fair value of these.
Accordingly, the values of accounts receivables and accounts payables are almost the
date. The Company’s following financial
instruments are not evaluated at fair
value: accounts receivable, cash and cash
equivalents, other short -term receivables,
accounts payable and long-term liabilities
with floating interest.
Financial assets
CONSOLIDATED
The value of forward exchange contracts
is set by comparing forward exchange
rate and the rate on the reporting
The Company’s financial assets are
classified into the categories: assets at
fair value through the profit and loss,
loans and receivables. Financial liabilities
are classified as liabilities at fair value
through the profit and loss, and other
financial liabilities. For further information about comparison by category, see
Note 29.
1,093,443
44,061
11,085
16,253
18,826
41,718
961,500
235,498
101,206
-
32,737
53,198
6,639
41,718
Book value
1,103,390
44,061
11,085
16,253
18,826
42,580
970,585
236,360
101,206
-
32,737
53,198
6,639
42,580
Fair value
12/31/2013
The following tables display the booked
value and the fair value of financial assets and financial liabilities.
The fair value of the Company’s noncurrent liabilities subjected to fixed
interest rates is calculated by comparing
the Company’s terms and market terms
for liabilities with the same terms to
maturity and credit risk.
same as their fair values since they are
entered on “normal” conditions.
95,761
Total
53
67,255
Accounts payable
CIRR loan
28,453
298,429
Total
222,579
17,343
-
Accounts receivable
28,453
30,053
Long-term loan
Book value
CIRR loan deposit
Financial assets
PARENT COMPANY
97,422
67,255
53
30,114
300,089
222,579
17,343
-
30,053
30,114
Fair value
12/31/2014
51,147
8,170
397
42,580
232,529
132,068
7,340
3,447
47,094
42,580
Fair value
50,285
8,170
397
41,718
231,667
132,068
7,340
3,447
47,094
41,718
Book value
12/31/2013
51
52
47,667
Total
397
Total
397
Trade and other payables
Interest-bearing loans and borrowings
December 31, 2013
53
53
Total
-
Less than 3
months
71,271
39,262
December 31, 2014
PARENT COMPANY
Yard instalments falling due
December 31, 2013
Yard instalments falling due
December 31, 2014
Less than 3
months
16,253
CONSOLIDATED
31,414
33,866
10,781
23,085
Less than 3
months
6,953
-
6,953
5,691
-
5,691
3 to 12
months
323,225
202,800
3 to 12
months
76,294
-
76,294
291,508
-
291,508
3 to 12
months
126,436
-
126,436
197,643
-
197,643
1 to 5
years
306,473
308,408
1 to 5
years
726,630
-
726,630
775,086
-
775,086
6,953
-
6,953
-
-
-
Thereafter
-
-
Thereafter
176,247
-
176,247
166,379
-
166,379
Thereafter
140,739
397
140,342
203,387
53
203,334
Total
700,969
550,470
Total
1,026,839
16,253
1,010,586
1,266,839
10,781
1,256,058
Total
necessary financing in a timely manner on
acceptable terms when needed.
The tables below summarize the maturity
profile of the Company’s financial liabilities, and future commitments to the
newbuilding program.
The tables do not include future interest
payments.
1 to 5 years
ing capital purposes. The Company seeks
to fix the majority of its fleet on long-term
contracts. Vessels not fixed on long-term
contracts are exposed to the volatility in
the spot market.
The Company will from time to time require additional capital to take advantage
of business opportunities. Historically
the Company has managed to obtain
December 31, 2013
Total
December 31, 2014
CONSOLIDATED
The Company monitors its cash flow
from operations closely and optimizes
the working capital level of the individual
companies and the Company as a whole.
The Company funds are used for investment opportunities in the business, yard
instalments, scheduled repayments and
repayments of debt and to general work-
2.5 Liquidity risk
Margin estimate, effect from movement
Progress reporting, effect from movement
December 31, 2014
Consolidated
The wholly-owned Brazilian subsidiary,
Siem Offshore do Brasil SA, has one
OSRV under construction in Brazil at year-
The Company seeks to obtain long-term
financing supported by long-term contracts, in order to reduce the frequency
and risk associated with the refinancing of
loans. Long-term charter parties will also
enable a higher degree of debt-financing.
The wholly-owned Norwegian company,
Siem Offshore Rederi AS, has 7 vessels under construction in Poland and
Germany at year end, which includes four
dual-fuel PSVs, one CLV and two WIVs.
First 10% to 20% of the contract price is
or will be paid in accordance with agreed
payment schedules and the remaining 80% to 90% will be paid at delivery.
The Company has secured long-term
employment for one PSV and for the two
WIVs under construction. The CLV will be
utilised by the Company’s wholly-owned
subsidiary, Siem Offshore Contractors, for
project work within the submarine power
cable installation, repair and maintenance
segment. The Company is in discussions
for long-term contracts for the three dual
fuelled PSVs.
2.6 Capital risk management
-
150,166
Estimated
total revenue
1,502
1,502
Profit/(loss)
-1,502
-1,502
Profit/(loss)
-1,502
-1,502
Equity
1,502
1,502
Equity
-1% movements
Long term contracts
The following sensitivity table demonstrates the impact on the Company’s
profit and equity before tax from potential
changes to the percentage of completion and margin, all other variables held
constant.
The Company uses the percentage-ofcompletion method in accounting for its
fixed price construction contracts related
to the segment Submarine Power Cable
Installation. Significant estimates are
estimate of the percent complete and the
overall margin.
2.9 Long term contracts
shipping taxation rules that apply. It is,
however, a challenging task to optimize
taxation, and there is always a risk that
the Company may end up paying more
taxes than the theoretical minimum,
which may in turn affect the financial
results negatively.
+1% movements
The Company seeks to optimize its tax
structure to minimize withholding taxes
when operating vessels abroad, avoiding
double taxation, and minimizing corporate
tax paid by making optimal use of the
The Company’s loan agreements include
terms, conditions and covenants which
impose restrictions on the operations of
the Company.
These restrictions may negatively affect
the Company’s operations including, but
not limited to, the Company’s ability to
meet the fierce competition in the market
in which it operates.
2.8 Risks related to possible tax liabilities
2.7 Risks related to loan agreements,
restrictions on dividends and distribution
The company has secured debt-financing
for all of the eight wholly owned vessels
under construction at year-end.
end. The OSRV is scheduled for delivery
in 2015. The vessel shall commence an
eight-year firm contract for Petrobras
with options for additional eight-year
periods.
53
54
The Company uses the percentage-ofcompletion method in accounting for its
fixed price construction contracts related
Revenue recognition – percentage-ofcompletion off-shore cable contracts
Estimates and assumptions that have
a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial
year, as well as judgments made by management, in the process of applying the
Company’s accounting policies, that have
the most significant effect on the amounts
recognized in the financial statements, are
discussed below.
Certain amounts included in, or that have
an effect on, the accounts and the associated notes require estimation, which
in turn entails that the Company must
make assessments related to values and
circumstances that are not known at the
point in time when the accounts are prepared. A significant accounting estimate is
an estimate that is important to provide a
complete picture of the Company’s financial position, which at the same time is the
result of difficult, subjective and complex
assessments performed by the management. Such estimates are often uncertain
by nature. Management evaluates such
estimates continuously based on historical data and experience, consultation with
experts, trend analysis and other factors that are relevant for the individual
estimate, including expectations of future
events that are believed to be reasonable
under the circumstances.
IFRS requires management to make
estimates and judgments that affect the
reported amounts of assets and liabilities,
as well as income and expenses in the
financial statements. The final reported
outcomes may deviate from the original
estimates.
Periodical project margin is only recorded when the overall project margin
is forecasted to be positive, and when the
execution of the project has reached such
level of technical completion beyond 25
percent that the management is comfortable to assess the financial outcome of
the project.
As presented in the below table, the
project shall need to progress into the
cable-laying phase before the minimum
25 percentage of technical completion is
reached. Prior to reaching a progress of
minimum 25 percent technical completion, and subject to a forecasted positive
project margin, project revenue are accrued to match the actual costs incurred.
The primary risk in the execution of
projects relates to the offshore installation phase. Hence, profit margin is not
recorded until the progress of the project
has reached a stage of minimum 25 percent technically completion. The below
table presents an example of the various
stages during a project life.
to the segment Submarine Power Cable
Installation. One significant estimate is an
estimate of the percent complete. Management estimates completion based on
an assessment of certain technical criteria
in the project execution plan that have to
be met in order to achieve a certain level
of percentage of completion, as opposed
to using costs incurred as a measure of
completion.
14%
Post Installation Works
Residual value
The level of depreciation expense is
dependent, in part, upon the estimated
residual value. Management estimates
a vessel’s residual value using their
knowledge of the scrap value of vessels.
The scrap value estimates are dependent on the price of steel. The scrap value
estimate is based on the expected value
at the end of the useful life of the vessel.
Management performs an annual review
Economic useful life
The level of depreciation expense is
dependent, in part, upon the estimated
useful life of the vessel. The useful life is
estimated based on historical data, experience related to the vessel and similar
vessels. The estimate is reviewed and updated annually. A change in the estimate
will affect depreciation prospectively in
current and future reporting periods.
Vessels
The sensitivity on the recorded revenue on
long-term construction contracts would
be +/- USD 14.9 million in 2014, if management had estimated a 10%
better/worse progress on the contracts
per year-end 2014.
16%
22%
Cold Commissioning
26%
Cable Termination
20%
Pre-Installation Works
2%
Project
Progress weighting
Cable Lay
Project Management &
XEngineering
Project Progress XItem
The stages of completion for a project are
as follows:
Note 3 - Critical Accounting Estimates and Judgements
The recoverable value of the vessel is
estimated, and if the recoverable amount
is less than the current carrying value,
an impairment loss is recognized in the
amount of the difference between carrying value and net realizable value. The recoverable amount for vessels is estimated
by means of broker estimates and value
in use calculations based on projected
discounted cash flows for the remaining
charter hire period or over the next four
On the reporting date, the Company has
assessed whether there are any indications that it may be necessary to write
down a vessel. Indicators include external
broker estimates, significant changes in
charter hire contracts, day rates, operating costs or adverse market conditions.
When such indications exist, an impairment test is performed in accordance with
Company policy.
and assessment of the vessel scrap value
estimates. Residual value is subject to an
annual reassessment.
The Company uses hedge accounting for
the Brazilian subsidiary, which has a functional currency of BRL. The designated
cash-flow hedge is a foreign currency exposure of future USD charter hire revenue
Hedge accounting
The Company tests whether goodwill
and intangible assets have suffered any
impairment in accordance with the accounting policy stated in note 1.11. The
recoverable amounts of cash-generating
unit have been determined based on
value-in-use calculation. This calculation
require the use of estimates (Note 5).
Impairment of goodwill and
intangible assets
years if no charter contract exists, together with an assumption of a terminal value
of the vessel. If a vessel is fixed on a long
contract, the Company also estimates an
excess value of the charter party and this
value is discounted based on an estimated
discount rate.
Photographer: Jarle Nyvoll,
Siem Opal
Highly probable future charter revenue
has been determined by management to
include the renewal option period, based
on the frequency of similar past transactions and for the contracts to be included
in the designated hedge from the date of
signing, even though the vessels are under
construction. Siem Offshore has defined
an effective hedge to be when the cash
flows of the highly probable future transactions are higher than the cash flows
of the hedging instrument for the same
period. Effectiveness testing is performed
using the Dollar Offset Method. See note
12 for additional information.
as the hedged item and USD long-term
debt the designated hedging instrument.
Designation of the hedged item requires
significant judgment in defining the
future charter contract revenue as highly
probable. Contracts have been written
for vessels still under construction, and
sometimes the delivery date of the vessel
is delayed. Contracts have been agreed
for a specific time period (e.g. four to five
years) and have a renewal option.
55
56
subsea power cables for offshore windfarms. Scientific Core-Drilling is comprised
of the activity of a scientific drillship which
performs coredrilling. The segment Other
is comprised of the ownership of Siem WIS
represent separately managed business
areas with unique products serving different
markets. The reportable segments are the
seven business areas PSV, OSCV, AHTS Vessels, Other Vessels in Brazil, Combat Man-
6,075
-28,052
491,312
Other
Intercompany elimination (1)
Total
38,230
31,865
AHTS Vessels
Vessels in Brazil, Smaller built (2)
4,212
125,883
Other
Total
3,490
Scientific Core-Drilling
1,530
23,121
OSCV
Submarine Power Cable Installation
23,434
PSV
Depreciation and amortisation by business area
25,914
14,799
101,479
19,351
142,480
AHTS Vessels (1)
Vessels in Brazil, Smaller built
104,844
OSCV
2014
75,841
1,904
3,264
440
2,989
38,883
7,072
21,288
363,955
-
3,884
36,898
23,151
7,987
24,103
131,894
41,407
94,630
2013
CONSOLIDATED
The following tables include information
about the Company’s operating segments.
with Other under the caption Other and
eliminations.
104,423
For reporting purposes, the Com
that develops applications for managed
pressure drilling (“MPD”), and certain other
activities.
Siem Offshore Inc uses three measures of
segment results, operating revenue, operating margin and net profit.
Intersegment sales and transfers reflect
arm’s length prices as if sold or transferred
to third parties at the time of inception
of the internal contract, which may cover
several years. Transfers of businesses or
fixed assets within or between the segments
are reported without recognizing gains or
losses. Results of activities not considered
part of Siem Offshore Inc.’s main operations
as well as unallocated revenues, expenses,
liabilities and assets are reported together
PSV (1)
Operating revenue by business area
The PSV segment includes 12 Platform
Supply Vessels. The OSCV segment includes
four Offshore Subsea Construction Vessels
and two Multipurpose field and ROV Support
Vessels. The ATHS segment includes ten
Anchor Handling and Tug Supply Vessels.
The Segment of Other Vessels in Brazil
consists of one Oilspill Recovery Vessel
and eight smaller Platform Supply Vessels.
Combat Management Systems is the activity
of supplying software for a management
system to the Brazilian Navy. Submarine
Power Cable Installation comprises the
activities of installation and maintenance of
The Company identifies its reportable segments and discloses segment information
under IFRS 8 Operating Segments which
requires Siem Offshore Inc to identify its
segments according to the organization and
reporting structure used by management.
Operating segments are components of a
business that are evaluated regularly by
the chief operating decision maker for the
purpose of assessing performance and allocating resources. The Company’s chief operating decision maker is the management
board, comprised of the CEO, CFO, COO
an CCO. Generally, financial information is
required to be disclosed on the same basis
that is used by the chief operating decision
maker. The Company’s operating segments
agement Systems, Submarine Power Cable
Installation, and Scientific Core-Drilling.
Note 4 - Segment Reporting
39,232
-35,343
AHTS Vessels (1)
84,316
Total
69,261
-26,857
17,139
3,425
1,360
3,750
29,023
19,782
21,640
337,157
(1) Includes newbuilding program, in total:
664,385
105,880
AHTS Vessels
26,567
60,765
1,885,173
Scientific Core Drilling
Other
Total
1,579,071
95,915
29,992
21,977
-
112,938
664,385
310,401
343,463
2013
301,520
329,413
7,289
2,814
4,113
-
65,237
3,921
204,786
41,252
2013
72,666
-
569,040
OSCV (1)
385,870
PSV (1)
2014
525,674
Total
Book value by business area
6,740
271
58,808
Other
Scientific Core Drilling
-
11,856
79,944
AHTS Vessels
85,269
282,786
OSCV (1)
2014
PSV (1)
Capital expenditures by business area
Other operating profit/(loss) includes, among others, gain of sale of interest rate derivatives (CIRR), gain/(loss) on currency exchange
forward contracts and general and administration expenses
(1) PSV and AHTS Vessels segments include I/C Revenues from contracting work for Submarine Power Cable Installation segments.
(2) Including impairment of vessels at USD 29 millions.
-28,084
9,429
Other
15,581
-8
48,073
OSCV
35,437
PSV (1)
Operating profit/(loss) by business area
mpany is organised into seven segments, which are representative of its principal activities.
57
58
Photographer: Arild Lillebø
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Vessels and
equipment
Vessels under
construction
PARENT COMPANY
Note 5 - Vessels, Equipment, Project Cost and Intangible Assets
-
-
-
-
-
-
-
-
-
-
-
Drydocking
-
32
The year’s disposal at cost
3,695
-433
90
-
130,515
-14,500
-
-
- 14,500
-
-
145,015
-5,268
-
-263,723
-4,073
-
290,367
127,711
127,711
-
1,717,712
-366,382
7,462
19,666
-14,500
-79,604
-299,405
2,084,094
-56,558
-79,952
263,723
24,918
-
206,281
1,725,682
1,426,277
-299,405
4,043
3,253
-18
-63,406
-243,278
1,725,682
-29,947
-3,331
224,326
-18,068
60,620
1,492,084
Vessels and
equipment
22,285
-32,569
727
4,894
-
-9,359
-28,831
54,855
-981
-4,894
-
-
-
22,284
38,445
9,615
-28,831
639
4,549
-
-6,467
-27,552
38,445
-848
-4,779
-
-
9,951
34,121
Drydocking
10,965
-6,632
-
13,733
-
-6,629
-13,736
17,597
-
-13,733
-
-
-
6,567
24,764
11,027
-13,736
-
3,348
-
-4,804
-12,280
24,764
-
-3,348
-
-
3,679
24,433
Capitalised
project cost
The balance of capitalized project costs relate to specific contracts. The costs are amortized over the term of the specific charter contracts.
Net book value on December 31, 2014
Accumulated depreciation on December 31, 2014
The year’s disposal of acc. depreciation
-
-110
Impairment
-412
The year’s depreciation
4,128
Accumulated depreciation on January 1, 2014
Purchase cost on December 31, 2014
-881
-
Vessels delivered in 2014
-
-
Movements between groups
-
Additons from acquisition of companies
156
4,853
Purchase cost on January 1, 2014
Capital expenditure
4,441
-412
-
-
The year’s disposal of acc. depreciation
-
-
-
-118
127,711
-11,124
-
-224,326
-
254,731
108,430
-326
The year’s depreciation
4,853
-433
-
-
Vessels delivered in 2013
217
5,069
Land and Vessels under
buildings
construction
Capital expenditure
Purchase cost on January 1, 2013
CONSOLIDATED
59
60
19,629
-
-
-
19,629
841
-
-
18,788
Goodwill
The year’s ordinary depreciation
Moved from Vessel and equipment
Investments
Balance on January 1, 2013
Intangible assets (Amounts in USD 1,000)
Equipment
Docking
Combined sewerage system
Engine system
Engine
Crew equipment
Marine equipment
Cargo equipment
Hull
Component
The vessels are divided into the following components and economical lives:
1,505
-1,774
50
-941
-
-883
3,279
-291
216
-
3,354
Research and
development
8,604
-1,177
31
-106
-
-1,103
9,781
-49
-
-34
9,864
29,737
-2,951
82
-1,047
-
-1,986
32,689
501
216
-34
32,006
Total
3 years
2,5 years
30 years
30 years
30 years
15 years
15 years
30 years
30 years
Economic life
Trademarks
and licences
13.00%
6.00%
18.00%
9.00%
10.00%
17.00%
27.00%
Percentage of total
-
17,318
116
2,588
260
-1,074
-
-1,773
8,503
-1,180
87
-90
-
-1,177
9,684
-98
-
-
9,782
Trademarks
and licences
25,937
-3,768
346
-1,163
-
-2,951
29,705
-3,002
19
-
32,688
Total
The Company recognized an impairment
in the fourth quarter of 2014 amounting
to USD 29 million related to two Oil Spill
Recovery vessels (OSRV) and two PSV’s
owned by the Brazilian subsidiary. The
impairment includes one vessel that were
under construction with an estimated
completion and delivery date of third
quarter 2015. During fourth quarter 2014
broker estimates, based on completed
vessels in use but assuming no charter hire contracts in place, indicated
a possible impairment as the broker
fair value was lower than the vessels’
Impairment
For all other vessels owned by the company a value in use calculation has been
made, where the value of the charter hire
is based on the actual charter hire period,
an anticipated utilization rate of 98.5%,
operating expenses calculated per day,
current carrying value. An impairment
test using a value in use calculation and
estimated future net cash flows based on
actual agreed charter hire contracts, was
performed. The internally estimated fair
value, based on the net present value of
the future cash flows, was higher than the
broker estimates, but still lower than the
carrying amount, by USD 29 million.
based on historical data, and a pre-tax
weighted average cost of capital (WACC)
of 6.6%. The recoverable amount of each
vessel, consisting of the fair market value
of the vessels, estimated by different
independent shipbrokers and the value in
use calculation as per 31 December 2014
of the charter hire period commencing
from 1 January 2015, exceeds the carrying amount for all vessels as of 31 December 2014. No impairment is therefore
recognized as of year-end 2014 for other
vessels owned by the Company.
Trademarks and licences refer to Siem WIS AS patented technology for the drilling industry. The figures include assets under development and developed assets, and the depreciation refers to developed assets that are not yet commercialized.
Share issue in Siem WIS completed in 2014 appreciate the Company’s 60% owner share to USD 15,043. This value indicates that there
is no impairment loss for the capitalized trademarks and licences.
The carrying amount of goodwill is related to the Submarine Power Cable Installation Segment.
-
The year’s ordinary depreciation
-
-594
-2,310
17,318
2,704
-
19
-
3,278
Research and
development
Investments
19,628
Goodwill
Balance on January 1, 2014
Intangible assets (Amounts in USD 1,000)
61
62
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Ownership and
voting share
100%
Bergen, Norway
Leer, Germany
Glimmen, The Netherlands
Leer, Germany
Halifax, Canada
Gdynia, Poland
Perth, Australia
Leer, Germany
Siem WIS AS
Siem Offshore Maritime Personnel AS
Siem Offshore Contractors GmbH
Siem Offshore Contractors EPS BV
AHMTEC GmbH
Overseas Drilling Ltd
Siem Offshore Canada Inc
Siem Offshore Poland Sp.z.O.O
Siem Offshore Australia
Siem Real Estate GmbH
100%
Fjell, Norway
Næringsbygg Indrettsveien 13 DA
100%
100%
100%
100%
100%
100%
100%
60%
95%
51%
Stavanger, Norway
Siem Meling Offshore DA
100%
100%
100%
Share and voting rights
322
-
454
13,615
34,486
-
125,370
-
54,953
205,659
21,540
11,176
Revenue
Siem Offshore Crewing AS
Delaware, USA
Consub Delaware LLC
Registered office
Aracaju Serviços Auxiliares Ltda
Company
The above companies are owned by the Parent. In addition, the subsidiaries own the following companies:
The book value in Siem Offshore do Brasil SA was increased with USD 28.6 million, Siem Offshore Management AS with
USD 4.3 million and Siem Offshore Invest AS with USD 0.38 million in 2014.
Total value recorded in the statement of financial position of the parent company
Cayman Islands
Siem Offshore US Holding AS
Siem Offshore Crewing (CI) Inc
Texas, USA
London, UK
Siem Offshore Management (US) Inc
Siem Offshore Services AS
DSND Subsea Ltd
Delaware, USA
Siem Offshore US Inc
Siem AHTS Pool AS
Registered office
Siem Offshore do Brasil SA
Siem Offshore Rederi AS
Siem Offshore Invest AS
Siem Offshore AS
Company (Amounts in USD 1,000)
Note 6 - Investment in Subsidiaries
18
17
1
5
50
3,989
1,205
47
-
270
50
808,700
867,158
5
1
5,127
292
18,352
21
-
96,741
583,396
1,027
-196
173
2,806
4,252
-209
6,304
742,994
97,117
7,597
Cost price
741,348
50
Except for certain regulations in Brazil as described below, there are no guarantees or other requirements that may restrict dividends
and other capital distributions being paid, or loan and advances being made or repaid to or from other entities within the group.
The shares in Siem Offshore Brasil SA were written down by USD 29 million due to impairment of four vessels.
The shares in Siem Offshore Invest AS were written down by USD 20 million due to overstatement of the share value in ODL.
Repayment of loans provided to the Brazilian subsidiary of the group may cause a withholding tax on the repaid amount.
5
1
5,127
292
0
21
-
67,741
583,396
77,117
7,597
Book value
There are no significant restrictions within the group (eg statutory, contractual and regulatory restrictions) reducing the ability of the
parent company or subsidiaries to transfer cash or other assets to or from other entities within the Group.
0
-5
5,307
-
17
-20
97,169
-24,458
5,206
2,606
6,175
100,222
7,421
94,673
35
898
-29
Book equity
-17,151
Share capital
Net profit
63
64
612
This year`s share of net profit after tax
3,753
-241
Total liabilities
-241
-
3,994
3,753
1,657
624
Current liabilities
Equity
Total assets
Cash
Current assets
Non.current assets
1,472
-77
Statement of financial position
689
Adjustments consolidated accounts
1,666
PR Tracer
Offshore
ANS
Siem Offshore´s share of net profit
The year’s net profit after tax
Company name
December 31, 2014 (Amounts in USD 1,000)
2,338
-
-
-
2,338
2,338
2,203
135
-
244
-
244
591
KS Big
Orange
XVIII
1,894
1,119
44
1,075
775
1,894
15
406
1,473
4
-17
21
43
Rovde
Industripark AS
16,993
14,731
125
14,606
2,263
16,993
1,155
22
15,816
77
-
77
1,546
Sentosa
Offshore
DIS
Figures for associated companies included in the consolidated accounts based on the equity accounting.
Note 7 - Investment in Associated Companies
76,031
44,143
16,440
27,703
31,887
76,031
1,625
33,605
40,801
871
-304
1,174
2,349
Secunda
Holdings
LP
Total
101,009
59,752
16,368
43,384
41,256
101,009
6,655
34,792
59,562
1,808
-451
2,205
6,195
65
66
Statement of financial position
This year`s share of net profit after tax
Share of net result not included
Siem Offshore´s share of net profit
The year’s net profit after tax
Profit and loss account
-
1,021
-328
1,349
3,264
Vanylven, Norway
Oslo, Norway
Halifax, Canada
KS Big Orange XVIII
Rovde Industripark AS
Sentosa Offshore DIS
Secunda Holdings LP
Total
PR Tracer Offshore ANS
Equity accounting
Equity accounting
Equity accounting
Equity accounting
Equity accounting
Consolidated as
-
Fair value in excess of book value for
vessels and goodwill as of December. 31
Registered office
-
Company name
-
-77
-
book value for vessels and goodwill
Amortisation of fair value in excess of
Adjustment for depreciation IFRS
Excess value
for vessel and goodwill as of January 1
Adjustments IFRS and fair value in excess of book value
77
1,651
Net book value as of December 31
Of which:
-339
-
-77
Dividends
689
This year’s share of net profit
1,378
50.00%
5.00%
50.00%
41.33%
41.33%
Owner
interest
373
-82
-
-
-
455
1,339
-289
-
-
244
-
1,384
Voting
rights
482
-96
-304
993
882
16,426
-1,454
-
-304
1,174
17,009
1,156
-243
-
-398
993
1,797
20,222
-2,255
-278
-398
2,206
-
24,895
15,519
7,514
222
8
1,633
5
-
-
5
-
Paid in Issued, not paid
capital
in capital
144
-36
-
-
-
180
258
-61
-278
-
77
-
519
50.00%
5.00%
50.00%
41.33%
41.33%
157
-29
-
-17
-
203
548
-112
-
17
21
-
656
2,931
-216
Total liabilities
-216
-
3,146
Current liabilities
Equity
2,931
20,946
20,222
1,161
19,061
Total
Total assets
50%
16,246
482
15,944
Secunda
Holdings
LP
2,931
5,00%
257
144
113
Sentosa
Offshore
DIS
Current assets
50%
550
162
388
Rovde
Industripark AS
Non Current assets
41,33%
1,339
373
966
KS Big
Orange
XVIII
PR Tracer
Offshore
ANS
Net book value as of January 1
41,33%
1,651
-
1,651
PR Tracer
Offshore
ANS
Company name
Specification of changes net book value in Siem Offshore’s accounts
Ownership interest
Net book value in Siem Offshore as of December 31
for vessel and goodwill as of December 31
Added/reduced in the period
Siem Offshore’s share of booked equity
Company name
2,249
2
2
-
2,247
2,249
2,249
-
259
-
259
628
KS Big
Orange
XVIII
2,441
1,534
38
1,496
907
2,441
21
2,440
4,120
-13
17
33
Rovde
Ind.park
AS
30,921
24,142
186
23,956
6,779
30,921
421
30,500
8,244
-
8
165
Sentosa
Offshore
DIS
70,082
37,828
9,695
28,133
32,253
70,082
13,231
56,850
750
-111
-2,564
3,425
6,850
Secunda
Holdings
LP
108,623
63,290
9,705
53,585
45,333
108,623
18,853
89,770
2,043
-451
-2,564
5,058
10,939
Total
41,33%
1,378
77
1,300
Adjustment for depreciation IFRS
Equity accounting
Secunda Holdings LP
Total
Equity accounting
Equity accounting
Rovde Industripark AS
Equity accounting
KS Big Orange XVIII
Sentosa Offshore DIS
Consolidated as
Equity accounting
Company name
Voting
rights
Owner
interest
PR Tracer Offshore ANS
203
455
77
50.00%
5.00%
50.00%
41.33%
41.33%
24,895
15,519
7,514
222
8
1,633
Paid in
capital
180
-18
-
-
0
198
0
1,797
-94
-
-451
993
1,350
5
-
-
5
-
Issued, not
paid in capital
882
0
-111
993
50.00%
5.00%
50.00%
41.33%
41.33%
-20
Fair value in excess of book value for vessels and
goodwill as of December 31
-42
-
-15
-
-12
book value for vessels and goodwill
-
-
-328
0
234
Amortisation of fair value in excess of
0
0
498
20,946
67
68
Aquisition (disposal)
Interest expence
Current service cost
Beginning of year
The development in the defined benefit obligation is as follows:
Net periodic pension cost (see Note 19)
Impact of curtailment/settlement
42
-
End of year
Exchange differences
Remeasurements loss/(gain)
Benefits paid
Payroll tax of employer contribution, assets
8,735
-1,938
-1,803
-303
-315
2,548
Administration cost
Employer contribution
-
413
10,133
12,546
-2,783
Acquisition (disposal)
Interest income
Beginning of year
The development in the fair value of plan assets is as follows:
End of year
Exchange differences
-350
-315
-
506
2,535
12,911
2,151
-768
266
25
Administration cost
Social contribution
93
2,535
2014
Interest expence
Service cost
The amount recognized in the income statement is as follows:
Note 8 - Pension Costs and Obligations
Remeasurements loss/(gain)
Excess value
420
17,009
-635
-90
-
542
2,501
14,406
4,222
20,946
1,797
19,148
for vessel and goodwill as of January 1
519
-253
-
-
882
861
15,519
0
50%
17,009
882
16,127
Benefits paid
656
-54
-90
-
-
8
-
655
5,00%
519
180
339
Payroll tax of employer contribution, assets
1,384
-68
-
-
-12
23
-
713
50%
656
203
453
1,378
Net book value as of December 31
-114
-
-
-
259
-
1,239
41,33%
1,384
455
929
Of which:
-145
-
Dividends
-328
-
1,349
This year’s share of net profit
Change of ownership or sale
1,615
-1,113
Net book value as of January 1
Specification of changes net book value in Siem Offshore’s accounts
Ownership interest
Net book value in Siem Offshore as of December 31
for vessel and goodwill as of December 31
Change of ownership or sale
Added/reduced in the period
Siem Offshore’s share of booked equity
10,133
-942
-423
-297
-437
3,536
-
-3,933
378
12,251
12,911
-763
840
-386
-437
-2,350
466
2,688
12,853
1,887
-1,232
314
29
88
2,688
2013
CONSOLIDATED
Present value of funded obligations
2.75%
2.50%
0.00%
2014
Expected wage adjustment
Adjustm. of the basic National Insur. amount
Expected pension increase
Development last two years
-
Experience adjustments on plan assets, gain/(loss)
-
-
2,778
10,133
12,911
2013
0.60%
3.50%
3.75%
4.00%
4.00%
2,778
-
2,778
-
-
-10,133
12,911
2013
CONSOLIDATED
-
3,812
Deficit in the plan
Experience adjustments on plan liabilities, gain/(loss)
8,735
Fair value of plan assets
Present value of defined benefit obligation
12,546
2.30%
December 31
2.30%
Expected return on funds
3,812
Discount rate
Financial assumptions:
Liability in the statement of financial position
-
3,812
Unrecognized net actuarial loss/(gain)
Present value of unfunded obligations
-
-8,735
Social contribution
12,546
Fair value of plan assets
2014
Present value of funded obligations
69
70
5,354
41,740
47,094
3,807
26,246
30,053
Total long-term receivables
Other long term receivables (1)
Project related prepayment
Intercompany receivables
Employee loans, see Note 19
Deposits
107
-
7,340
2,133
Total other short-term receivables
Other short-term receivables (2)
Intercompany receivables
VAT
Prepaid income taxes and other taxes
Outstanding insurance claims (1)
Unbilled revenue
Prepaid expenses
63,877
13,039
-
242
3,755
9,476
8,214
29,150
12/31/2014
23,432
19,354
-
-
4,076
-
12/31/2014
32,737
2,519
USD 29,426 of the Company’s cash balance at years end was restricted funds of which USD 1,749 was for tax withholdings and USD
27,677 represented security for bank guarantees and loans.
Note 10 - Restricted Cash
-
84
4,264
4,898
11,719
9,253
12/31/2013
6,639
956
-
-
5,683
-
12/31/2013
CONSOLIDATED
(1) Outstanding insurance claims refer to breakdown expenses qualifying for insurance cover. The amount is less own deduction.
(2) Other short term receivables includes loan to Secunda Holdings LP at USD 2.8 million, refunds from NIS/NOR at USD 1.0 million,
reimbursables in Brazil at USD 1.9 million, AHTS Pool accruals at USD 5.4 million and other accruals at USD 1.9 million
17,343
-
5,098
-
17,340
-
-
-
2
12/31/2013
-
-
3
12/31/2014
(1) Including long term loan USD 18.6 million to Siem Industries Inc.
-
12/31/2013
-
12/31/2014
PARENT COMPANY
Note 9 - Receivables
Long
Other long-term differences
2,352
-6,203
Deferred tax (tax asset) Germany
-12,591
The Company is subject to taxes in several jurisdictions, where significant judgment is required in calculating the tax provision for the Company. There are several transactions for which the ultimate tax cost is uncertain and for which the Company makes provisions based on an assessment of internal estimates, tax treaties and tax regulations in countries of operation, and appropriate external advice. Where the final tax
outcome of these matters is different from the amounts that were initially recorded, such difference will impact the tax charge in the period in
which the outcome is determined.
-11,770
-11,770
-6,019
-3,994
-1,758
-68,298
-21,851
-46,447
-3,745
-
-2,778
-
-39,922
-
2013
CONSOLIDATED
Deferred tax assets are recognized as intangible assets as it is probable through prospective earnings that it can be utilized.
There are no tax assets in the parent company.
Deferred tax asset recognized in statement of
--financial position as of December 31
-12,591
-3,785
Deferred tax (tax asset) Holland
Deferred tax (tax asset)
-2,604
Deferred tax (tax asset) Norway
-69,646
Short
Other short-term differences
-3,812
Basis for deferred tax (tax asset)
Long
Pension funds/obligations
-30,265
Long
Special tax account
-37,921
Tax loss carried forward
Long
Operating assets
-
-39,381
Long
Participation in limited liability companies
2014
Net temporary differences as of December 31
Time frame
Deferred tax
Temporary differences
Note 11 - Taxes
71
72
2
Change in deferred tax/deferred tax asset
Over/under provisions in previous year
Total
-
39
Over/under provisions in previous year
Total
-
39
Change in deferred tax/deferred tax asset
Taxes payable
Tonnage tax
regime
39
Tax liabilities
Tax expense
39
-
Tonnage tax
regime
Payable taxes falling due within 1 year
Long term tax liabilities falling due after 1 year
Total tax consolidated
22
-4
-15
2
39
2014
-3,624
-1,337
-5,650
3,364
Other tax regime
10,400
3,721
6,679
Other tax regime
2,726
-33
-1,179
3,939
Other tax regime
11,351
4,983
6,368
Other tax regime
Overprovision in previous year relates to activity on Greenland for the subsidiary Overseas Drilling Limited.
Actual tax liability was decreased compared to budget taking into consideration local tax legislation.
2
Taxes payable
Tonnage tax
regime
22
Tax liabilities
Tax expense
22
-
Tonnage tax
regime
Total tax consolidated
Total tonnage tax in subsidiaries, as of December 31
Paid
Tax charge
Tonnage tax regime in subsidiaries, as of January 1
-3,585
-1,337
-5,650
3,403
Total tax expense
2013
10,439
3,759
6,679
Total tax liabilities
12/31/2014
2,729
-33
-1,179
3,941
Total tax
expense
2014
11,373
5,005
6,368
Total tax
liabilities
12/31/2014
39
-15
-949
39
964
2013
261
261
-
Total
Photographer: Antonio Mladinov,
Siem N-Sea
-
2013
2014
Taxes payable
4,212
-673
4,885
12/31/2013
4,738
-146
Tax liabilities
4,885
12/31/2014
Total tax parent company
73
74
NOK
NOK
NOK
NOK
NOK (3)
NOK
NOK
EUR
NOK
80,719
94,172
203,334
28,453
174,881
- 10
211,500
700,000
49,770
360,000
435,000
222,167
240,000
2,351,700
600,000
12,364
3,060
4,655
365,137
54,598
114,085
16,482
19,600
320,762
1,740,247
62,791
79,132
Committed
Facility
amount currency
Total long-term debt including fees and expenses
(CIRR loan) NOK
Total
Fees and expenses
Total secured debt
NOK
-
174,891
NOK
USD
-
-
USD
-
NOK (2)
USD
-
USD
NOK
-
-
NOK (4)
-
-
USD (1)
USD
-
-
Loan
Currency
211,500
700,000
21,330
-
-
207,833
240,000
2,197,333
600,000
12,364
3,060
4,655
365,137
49,740
114,085
16,482
19,600
-
-
62,791
79,132
Drawn
amount
currency
CONSOLIDATED
1,242,813
28,453
1,214,360
-13,245
1,227,605
94,172
25,931
-
-
27,960
32,288
295,611
80,719
1,663
412
626
49,123
49,740
114,085
16,482
19,600
43,153
234,118
62,791
79,132
Drawn
amount
USD
(1) Under the USD 62.8 million facility, part of the loan (USD 30.2 million) is fixed for a 7-year term to average interest rate of 7.58%.
(2) Under the NOK 365.1millon facility, part of the loan (equivalent to USD 25.0 million) is fixed for an approximately 9-year term
to average interest rate of 5.36%.
(3) Under the NOK 222 million facility a majority of the loan is fixed for a 5-year term to an average interest of 4.18%.
(4) The USD 234.1 million facility has a balloon repayment in 2015. The term for this debt shall either be automatically extended or
renegotiated subject to certain requirements regarding vessel employment.
(USD)
PARENT COMPANY
2014
Note 12 - Borrowings
Fixed
2019
2019
2016
2027
2027
2019
2019
2018
2018
2019
2019
2019
2023
2031
2028
2027
2019
2022
2015
2021
2017
Duration
Semi annually
Bullet
Bullet
Semi annually
Semi annually
Semi annually
Semi annually
Semi annually
Bullet
Monthly
Monthly
Quarterly
Semi annually
Monthly
Monthly
Monthly
Semi annually
Quarterly
Semi annually
Semi annually
Quarterly
Instalments
The Company has a portfolio of bank loans secured with mortgage in vessels. The creditor and guarantors are in general first class
commercial banks and state owned financial institutions with ratings on or above BBB- and AAA.
As of year end, the Company had issued two high yield unsecured bonds of NOK 600 million and NOK 700 million respectively.
The high yield unsecured bonds are listed on Oslo Stock Exchange, have no amortization and matures in 2018 and 2019.
As of December 31 2014 all covenants requirements have been met.
The Company has recieved waiver of financial covenant for the period of Q1 2015, from lenders and guarantors, for certain mortgage
backed vessel financings.
1,267,716
30,114
1,237,602
-13,245
1,250,847
Floating
Fixed or floating
-
94,172
Fixed or floating
-
Floating
Fixed or floating
29,653
25,931
Floating
32,288
Fixed
Floating
305,205
Floating
Fixed and floating
51,811
1,663
Fixed
52,980
80,719
Fixed
115,824
Floating
Fixed
16,310
412
Floating
19,600
Floating
Floating
626
Floating
43,153
Fixed and floating
234,118
Floating
67,251
Interest rate
79,132
Fair value
December 31, 2014
75
76
Total long-term debt including fees
and expenses
(CIRR loan) NOK
Total
Fees and expenses
Total secured debt
NOK
NOK
NOK
NOK
NOK (2)
USD
USD
USD
USD
NOK
253,800
240,000
1,657,771
600,000
5,250
625,746
58,879
116,107
23,162
21,000
296,402
1,609,207
72,124
90,437
Committed Facility
amount currency
253,800
-
889,050
600,000
5,250
625,746
47,990
57,432
18,173
21,000
-
-
72,124
90,437
1,003,218
41,718
961,500
-7,368
968,868
-
146,136
98,624
863
102,856
47,990
57,432
18,173
21,000
48,721
264,511
72,124
90,437
Drawn amount Drawn amount
currency
USD
CONSOLIDATED
The fair value of the current borrowings with floating interest equals their carrying amount, as the impact of discounting is not
significant. The fair values are based on cash flows discounted using a rate based on the actual borrowing rates, and are within level 2
of the fair value hierarchy.
The fair value of the current borrowings with fixed interest have been calculated by using the current market rate for similar loans, and
are within level 2 of the fair value hierarchy.
(1) Under the USD 72.1 million facility, part of the loan (USD 34.9 million) is fixed for a 8-year term to average interest rate of 7.58%.
(2) Under the NOK 625.7millon facility, part of the loan (equivalent to USD 34.2 million) is fixed for an approximately 10-year term to
average interest rate of 5.36%.
140,342
41,718
98,624
-
98,624
-
-
98,624
-
-
-
-
-
-
-
NOK
USD (1)
-
USD
-
Loan
Currency
-
(USD)
PARENT COMPANY
2013
Fixed
47,543
928
1,005,797
42,580
963,217
-7,368
970,585
-
144,868
98,624
Fixed
Fixed or floating
Fixed
Floating
Fixed
Fixed and floating
Fixed
54,890
104,340
Floating
Fixed
16,925
Floating
21,000
Floating
48,721
Fixed and floating
77,797
264,511
Floating
Interest rate
90,437
Fair value
December 31, 2013
2019
2019
2018
2018
2017
2022
2030
2027
2027
2019
2022
2015
2021
2017
Duration
Semi annually
Semi annually
Semi annually
Bullet
Quarterly
Semi annually
Monthly
Monthly
Monthly
Semi annually
Quarterly
Semi annually
Semi annually
Quarterly
Instalments
77
78
Total
Thereafter
1,052,714
166,380
75,975
282,909
118,926
99,623
308,902
Mortgage debt
174,891
-
94,172
80,719
-
-
-
Other interest
bearing debt
1,227,605
166,380
170,147
363,628
118,926
99,623
308,902
Total
CONSOLIDATED
-368
Recognized in the profit and loss account
Siem Consub SA (subsidiary company in
Brazil with Brazilian real as their functional currency) initiated hedge accounting
1 January 2014. The hedging instrument
is 100% of the USD denominated longterm debt held by the Brazilian entity in
Cash-flow hedges
Net unearned CIRR as of December 31
the amount of USD 187.7 million (included
in the borrowings table above) and the
hedged item is the USD foreign currency
exposure related to future cash flows of
highly probable contracted charter vessel
revenue. The hedged item is the value of
the first sales of the month from a portfolio of seven vessels sufficient to cover the
2,155
-
2013
2,155
-
-368
2,523
monthly debt payment.
The prospective and retrospective effectiveness testing for the hedge falls within
the accepted 80-120% range, as there is
sufficient head-room in the effectiveness
test even though two of the seven vessels
were not yet operational in 2014 (due to
delayed delivery dates). The effective por-
1,786
-
2014
Paid-back CIRR
41,718
41,718
the Bank as financial security for the loans
drawn. Recognition of the gain, related to
each option, is recorded over the term of
any drawn loans.
-
Beginning of the year
gian Export Credit Agency. The Company
made certain sale of the right to exercise
such options to a first class international
bank (the “Bank”). Long-term loans drawn
from the Norwegian Export Credit Agency
are placed as corresponding deposits in
28,453
28,453
Unearned CIRR
Prior to ordering vessels from Norwegian
yards, the Company applied for fixed 12year interest rate options related to the
long-term financing of such vessels. The
Company was granted such options for
each of the relevant vessel by the Norwe-
Commitment as of December 31
CIRR loan drawn on 31.12
Total CIRR loan commitment
CIRR loan (Both consolidated and parent company)
The Company and parent company are in compliance with the financial covenants as per December 31, 2014.
The book value of mortgaged assets consist of non-current tangible assets and portion of the accounts receivables and amounts to
USD 1,764 million at year end.
There are various financial covenants related to the Company’s debt agreements. The main prevailing covenants are:
- equity ratio to total assets in excess of 30%
- positive working capital
- certain amount of freely available cash and bank deposit balance
- debt service ratios and interest rate coverage
174,891
-
2019
2018
80,719
94,172
2017
2016
-
2015
Instalments per December 31, 2014
falling due over the next 5 years
-
(USD)
PARENT COMPANY
Currency translation differences of USD
11 million recognized as OCI include
approximately USD 763 thousand of
currency differences related to loans in
USD from other Company entities to the
Brazilian entity. These internal loans are
Net investment hedge with
internal loans
-
-
-
-
1,111
201
6,858
8,170
-
-
60,000
-
926
80
6,249
67,255
Total other current liabilities
Other accrued cost, mainly regarding operating expenses vessels
Accrued interest
Unearned income
Loan from shareholder
Social security etc.
Non-interest-bearing short-term liabilities
18,203
44,061
123,072
2,796
2,796
2013
Above service is provided to companies in which a Board member has an interest. Kristian Siem is the Chairman of Siem Industries
Inc., which is controlled by a trust whose potential beneficiaries include members of Kristian Siem’s immediate family.
Siem Industries holds an interest in Subsea 7. Siem Offshore LLC, 100% owned by the Company, has chartered one vessel to
Subsea 7 during 2014.
8,556
8,556
Total
2014
CONSOLIDATED
Service to entity where director has ownership
Sales of services
For other related parties, the following transactions were carried out:
Siem Industries Inc. is the parent company of Siem Europe S.a.r.l. the Company’s largest shareholder with a holding of 34.39%, and
is defined as a related party. The Company is obligated to Siem Industries Inc., for a fee of USD 250K (2013: USD 300K). This fee is
the remuneration for the services of two of the Board members. This fee also covers office in the Cayman Islands and administrative
expences.
Details related to transactions, loans and remuneration to the executive Management and the board of directors are set out in Note
19. For Parent, all subsidiaries in Note 6 are also defined as related parties.
Note 14 - Related Party Transactions
5,133
11,780
3,517
-
5,428
-
12/31/2013
31,876
6,103
13,869
7,264
60,000
3,960
-
12/31/2014
CONSOLIDATED
designated as a net investment hedge in
accordance with IAS 21 and the currency
gains and losses recognized in the
Brazilian entity are appropriately shown
as part of OCI, and will be recycled over
profit or loss in the event that the Brazilian
entity ceases to be a consolidated
Company entity.
Other accrued cost include accrued commission, purchase orders and other accrued cost. Other current liabilities
include accrued salaries and incentive program, provision for operating expenses and other short term liabilities.
12/31/2013
12/31/2014
PARENT COMPANY
Note 13 - Other Current Liabilities
tion of the cash flow hedge, USD 14.6 million shown in OCI, is the effective portion
of the loss on the hedging instrument. The
hedge was not 100% effective, and a USD
6 million loss related to the ineffectiveness of the cash flow hedge is recognized
over the profit or loss. USD 5.6 million was
recycled from OCI to the profit or loss during 2014 in connection with this hedge.
79
80
14,098
14,098
2013
CONSOLIDATED
84,200
84,200
2013
CONSOLIDATED
-53
233
308
-34
-11
11
-94
-
436
2013
CONSOLIDATED
2
49
2013
CONSOLIDATED
The Company holds a long-term loan to Rovde Industripark AS. Siem Offshore Invest AS owns 50% of Rovde Industripark AS.
At December 31
Exchange rate variations
8
-8
Interest received
-22
-
308
2014
Interest charged
Instalments
Drawings
At January 1
Loan to associates
Loans to related parties:
250
2,102
Accounts receivables
Accounts payable
2014
Balance items following purchase and sale of service:
In Q3 2014, the vessel “Siem Sailor” was sold to a company controlled by O.H. Meling & Co AS at a price of NOK 295 million. The
purchaser of the vessel is the 49% owner of Siem Meling Offshore DA, and is controlled by O.H Meling & Co AS.
47,447
47,447
Total
2014
Sale of vessel
Sale of Vessel
Service delivered from related parties is mainly cost for technical management, corporate management and delivered crew.
The service is supported to Siem Meling Offshore DA, 51% owned by the Company, and is delivered by its partner in Siem Meling
Offshore DA.
11,351
11,351
Total
2014
Service from related parties
Purchase of service
-75
7,057
-645
-119
315
-
-
7,506
2013
CONSOLIDATED
10,086
Total
Associates
Subsidiaries
Payables from related parties
8,948
-
8,948
2,422
708
1,714
2013
PARENT COMPANY
5,737
-
5,737
20,573
1,975
Total
18,598
Subsidiaries
2014
Associates
Receivables from related parties
Year-end balances arising from sales and purchases:
11,725
1,650
10,075
2013
PARENT COMPANY
Service from subsidiaries consists of administrative and corporate services provided by Siem Offshore Management AS.
All terms used for above transactions are at arms’ length.
Total
-
10,086
Service from subsidiaries
Service from associates
2014
Following transactions with related parties were carried out for the parent company:
Short-term loan
At the end of 2014 a short-term loan of USD 60 million was drawn by Siem Offshore Inc. under a credit facility provided by Siem Industries Inc. The short-term loan is on market terms of interest, and an interest of USD 158K has been booked as cost for 2014.
The borrowing facility was on market terms of interest.
Siem Meling Offshore DA had a long term-liability from its partner in Siem Meling Offshore DA.
The whole loan has been repaid during the year.
0
-53
Interest paid
At December 31
53
-6,982
-
7,057
2014
Interest expenses
Instalments
Drawings
At January 1
Liability to related parties
Liability to related parties:
81
82
-4,412
Converted to shares
-
-
26,246
41,740
517
-
2,348
-
-45,353
-
84,229
18,104
780
-
272
-
-
-
17,052
23,637
-263
-
2,076
-
-45,353
-
67,177
2013
PARENT COMPANY
All loans are on market terms of interest.
Loan provided to associates is held against Siem Offshore Contractors GmbH, a company owned 100% by the subsidiary Siem Offshore
Invest AS.
The loan to subsidiaries is held against Siem Offshore do Brasil SA on 31 December 2014.
At December 31
-879
Interest received
854
-18,176
-4,412
7,119
41,740
4,498
Interest charged
Instalments
Converted to shares
Drawings
At January 1
Total loans to related parties
At December 31
-347
-
299
Interest received
-18,176
-
4,619
18,104
21,748
Interest charged
Instalments
Converted to shares
Drawings
At January 1
Loan to sub-subsidiaries
At December 31
-532
Interest received
555
Interest charged
-
2,500
Instalments
23,637
Drawings
2014
At January 1
Loan to subsidiaries
Loans to related parties:
Cross Currency Swap
1,041
-
-
For further information regarding profit
and loss effect on forward currency contracts and currency options, please see
Note 28.
11,085
Cross currency swaps have been entered
into in order to hedge both interest and
principal payments on long term debt
financings denominated in other currencies than USD.
Cross currency swaps:
At 31 December 2014, the fixed rates vary
from 1.13% to 2.29%. The floating rate
leg of the interest rate swaps are LIBOR.
Gains and losses are recognised in the
profit and loss under financial expenses.
The nominal amounts of the outstanding interest rate swaps contracts on 31
December 2014 were USD 270.0 million
(2013: USD 288.4 million).
-
4,275
6,810
-
Liabilities
Currency options have been entered into
in order to hedge operational currency
exposure.
These options are typically path-dependent options which include features related
to situations where the underlying reaches
or fluctuates within specific barrier levels.
This enables the Company to hedge a
range in the underlying currency rather
than simply a level. Gains and losses are
recognised in the profit and loss.
16,732
-
-
-
Assets
The nominal principal amount of the
outstanding forward currency contracts
on 31 December 2014 were USD 122.5
million (2013: 153.5 million) of which USD
58.4 million refers to EUR/USD contracts,
USD 54.0 million refers to USD/NOK contracts, USD 7.0 million refers to GBP/USD
contracts, USD 2.2 million refers to EUR/
NOK contracts and USD 0.9 million refers
to GBP/NOK contracts. Of the USD 54.0
million under the USD/NOK contracts, two
USD 20.0 million positions are offsetting,
such that the net position is USD 14.0
million. The forward currency contracts
have been entered into in order to hedge
primarily operating expenses in foreign
currencies and committments related to
vessels under construction.
1,041
4,683
10,292
2,325
Liabilities
12/31/2013
Interest rate swaps:
Total derivative financial instruments
-
-
-
Assets
12/31/2014
Currency options:
-
-
-
-
Interest rate swaps
Currency options
Forward currency contracts
CONSOLIDATED
Forward currency contracts:
-
-
-
12/31/2013
-
12/31/2014
PARENT COMPANY
Note 15 - Derivative Financial Instruments – Assets (Liabilities)
83
84
120,291
106,131
Total guarantees
Contractual guarantees other
Contractual guarantees to Brazilian Navy
(1)
(2)
593
141,908
141,315
154,317
150,014
4,304
12/31/2013
CONSOLIDATED
12/31/2014
-
-
-
-
-
-
550,470
308,408
2016
Total
242,062
-
12/31/2014
550,470
127,606
678,076
12/31/2014
2015
2014
Instalments falling due over the next 3 years
Unpaid instalments
Instalments paid
Shipbuilding contracts with variation orders
12/31/2013
12/31/2014
Parent company
-
-
-
-
12/31/2013
12/31/2014
PARENT COMPANY
Capital expenditures contracted for at the reporting date but not yet paid is as follows:
Note 17 - Commitments
700,969
86,356
220,117
394,496
12/31/2013
CONSOLIDATED
700,969
146,992
847,961
12/31/2013
CONSOLIDATED
(1) Contractual guarantees to the Brazilian Navy are issued by Siem Offshore do Brasil SA.
(2) Contractual guarantees provided by Parent are security for one of the contracting parties of Siem Offshore Contractors GmbH.
Such guarantees are for advance payments recieved at USD 27.3 million and performance guatantees at USD 109.3 million and
guarantees related to tax cases in Brazil USD 4.7 million.
120,291
-
12/31/2013
106,131
-
12/31/2014
PARENT COMPANY
Note 16 - Guarantees
7,007
-
10,091
18,774
-
769
-
11,752
12,521
Total operating expenses
General and administration
Power Cable project cost
Other vessel operating expenses
Vessel crew expenses
2014
35,523
241,291
50,701
31,078
45,568
The average number of employees in the Company was 1,073 for 2014, including onshore and offshore employees.
No employees are employed in the parent company.
Government grants is a special Norwegian seaman payroll and tax refund given to Norwegian Government grants is a special Norwegian seaman payroll and tax refund given to Norwegian
104,030
2,929
1,887
13,614
-5,762
91,362
2013
CONSOLIDATED
297,187
47,033
90,179
113,945
2013
CONSOLIDATED
124,451
(1) Personnel expenses includes vessel crew expenses and part of general and administrative expenses, see Note 18.
110,571
4,147
Other benefit
Total personnel expenses
2,151
-5,457
14,309
Government grants - net wages arrangement in Norway
Payroll tax
Pension costs, see Note 8
95,421
2014
Salaries and wages
Personnel expenses (1)
Note 19 - Salaries and Wages, Number of Employees
2013
1,675
2014
PARENT COMPANY
Note 18 - Operating Expenses
85
86
391.3
388.6
HR Tore B. Johannessen
307.6
411.1
367.8
298.0
CFO Dagfinn B. Lie
COO Svein Erik Mykland
CCO Bernt Omdal
HR Tore B. Johannessen
3.5
33.1
36.9
27.0
30.2
41.0
37.2
40.6
31.1
33.8
Pension premium
3.5
3.5
8.5
12.3
54.5
3.7
3.1
9.0
12.5
2013
2.000,000
2.000,000
2.000,000
2.000,000
3.000,000
400,000
400,000
400,000
400,000
600,000
Share options
2,193
2,193
3,331
Total
3,331
Amount
Loan to executive management
Loan on December 31, 2014: (Amounts in USD 1,000)
3,331
-755
Balance December 31
-310
Effect of currency differences
40
Instalments
New loan raised
-
Balance January 1
Changes in executive management
2014
4,356
Loan to executive management: (Amounts in USD 1,000)
-
Interest
Share loan (1).
Terms
4,356
-402
-
35
-
4,723
2013
Shares in the Company held by members of corporate management in 2014 were 2,618,161 (2013: 2,608,161).
The Board of Directors of Siem Offshore Inc. has authorized the award of Stock Options to eight key employees of the Company. See
Note 31 for more information.
559.3
CEO Terje Sørensen
2013
452.4
CCO Bernt Omdal
310.5
COO Svein Erik Mykland
610.6
CFO Dagfinn B. Lie
Salary paid
CEO Terje Sørensen
2014
Name
Corporate management salaries and other benefits are presented in the table below:
55.9
Total
Other benefits
2,421
Salary and other short term compensation
Employees included in the above payroll in 2014 were five (2013: five).
2014
2,421
Payroll registered to the executive management: (Amounts in USD 1,000)
-
Interest
Terms
Share loan (1).
103
51
-
-
155
99
60
21
-
180
Total auditor’s remuneration
Other consultants, Fees
Tax/Legal Assistance
Audit Fee Other
Audit Fee
902
56
116
202
528
2014
873
28
127
139
579
2013
CONSOLIDATED
0
5,883
2013
Annual lease payment on operational leases
4,020
2017 and thereafter
Total
-
-
-
4,839
1,859
1,193
1,787
CONSOLIDATED
Net present value of future commitments relating to lease agreements are calculated to be USD 4,839 for the Company.
There are no lease agreement for the Parent. The interest rate in the calculation of net present value is 5%.
2015
2016
-
Fall due
PARENT COMPANY
8,763
2013
CONSOLIDATED
2014
As of 31 December 2014, the Company had some commitments relating to lease agreements which fall due as follows.
2014
PARENT COMPANY
The operating leases in the Parent for 2013 are related to charter of vessels and satellite equipment. One of the chartered vessels,
“Siem Sasha” has been chartered on bareboat agreements from the subsidiary Siem Offshore Rederi AS. The contract was finished
September 2013. The lease costs were as follows:
The Company has entered into different operating leases for office premises, office machines, and communication satellite equipment
for the vessels. The leases also include a substitute vessel on a time charter party. The lease period for the lease agreements varies
and most of the leases contain an option for extension.
Note 20 - Operating Leases as Lessee
2013
2014
PARENT COMPANY
Auditor’s remuneration
(1) Share loan: The loans are repayable by the employee when the employee’s shares in the company are realized or if the employee
leaves the Company. Loans equivalent to USD 4 million are secured by pledges in relevant shares.
The Remuneration paid to the Board of Directors in 2014 was USD 440K (2013: USD 437K).
4,356
Total
Amount
4,356
Loan on December 31, 2013 (Amounts in USD 1,000)
Loan to executive management
87
88
1,219
4,842
Net currency gain/(loss)
Loss on FX contracts
Other financial items
Total financial expenses
Other financial expenses
Interest rate SWAP
Interest expenses
Financial expenses
Total financial income
Other financial income
Gain intercompany closure
Interest income
Financial income
0.15
Earnings per share diluted attributable to equity shareholders
Option program to executive management, see note 19 and 31.
0.15
Earnings per share attributable to equity shareholders
58,147
389,144
Weighted average number of shares diluted
Result attributable to shareholders
387,591
2014
37,114
-3,022
-55,868
-2,354
-5,063
-48,451
9,091
4,903
-
4,188
0.06
0.06
22,000
389,144
389,078
2013
-14,895
-7,756
-36,132
-3,309
3,784
-36,607
5,434
74
-
5,360
2013
CONSOLIDATED
2014
Weighted average number of shares outstanding
Earnings per share
Note 22 - Earnings per Share
-
-7,804
-12,704
-
-828
-
-6,976
9,586
39
-903
-
-11,801
4,162
-
-
9,547
4,162
-
2013
2014
PARENT COMPANY
Note 21 - Financial Items
Unearned revenue
43,417
2,473
At year-end 2014, the activity within CMS had five projects in progress. The degree of completion varies from 0.1% to 100%. Margin is
calculated and included for all five projects.
The activity within the Cable Installation Segment included six projects in progress at year-end 2014. These projects are in an various
phases, and margin for 2014 is recognized only on projects with progress exceeding 45 %.
All projects in progress at year-end 2014 are estimated to generate a positive contribution over the total project period.
There are no contracts in progress in the Parent.
See note 2.9 for analysis of sensitivity.
-
2,473
Unbilled revenue
December 31, 2013
3,966
39,452
Contracts in progress refer to activity within the Combat Management Systems (CMS) and Cable Installation Segment, see Note 4.
293
293
8,608
-
Total
8,608
Cost
Revenue
Accrued project cost
1,360
Total
Unearned
revenue
32,564
Cost
Assets / liabilities
33,923
Revenue
12/31/2013
Accumulated per
2013
Recognized
14,918
22,521
21,549
14,918
Total
-
Unbilled revenue
December 31, 2014
16,143
132,612
148,755
12/31/2014
22,521
21,549
CONSOLIDATED
Accumulated per
Cost
Revenue
Accrued project cost
11,528
Total
Assets / liabilities
94,261
105,789
2014
Recognized
Cost
Revenue
Note 23 - Contracts in Progress
89
90
-
-
- 18,121
-
-
18,121
18,121
-
-
-
18,121
-
2013
CONSOLIDATED
2014
-
-
-
2013
Total
Gain/(loss) on sale of assets intercompany
Gain/(loss) on sale of assets, net
18,728
-
18,728
29,827
-
29,827
2013
CONSOLIDATED
2014
2013:
The net gain for the Company on sale of assets consisted of gain from sale of the MRSV “Seven Sisters“ of USD 28.2 million and gain of
sale of one smaller vessel in Brazil of USD 1.6 million.
2014:
The net gain for the Company on sale of assets of 18.7million consist of gain from sale of the PSV “Siddis Skipper”, “Siem Sailor” by
USD 17.9 million and other USD 0.7 million.
-
-
-
2014
PARENT COMPANY
Note 25 - Other Gain/(Loss) on Sale of Assets
There is no asset held for sale in the parent company or group as of December 31, 2014.
Booked value for the vessel “Siddis Skipper” was transferred from fixed assets to asset held for sale in December 2013. The vessel was
sold on January 8, 2014.
Purchase cost per December 31
Capital expenditure
Moved from Fixed asset
Purchase cost per January 1
Note 24 - Asset Held for Sale
BERGEN KOMMUNALE PENSJONSKASSE
79,716,781
387,591,380
100,00%
Terje Sørensen is the CEO of the Company and held 1,950,000 shares on December 31, 2014.
Siem Europe S.a.r.l. is the main shareholder of Siem Offshore Inc. and is controlled by a trust whose potential
beneficiaries include members of Kristian Siem’s immediate family. Kristian Siem, who is a Director of the Company,
is also the Chairman of Siem Industries Inc.
20,57%
79,43%
0,74%
0,76%
0,77%
0,78%
0,81%
0,84%
0,86%
0,87%
0,96%
0,96%
1,28%
1,37%
1,42%
2,07%
2,20%
2,54%
2,83%
3,19%
19,81%
34,39%
OWNER INTEREST
Siem Industries Inc. sold it’s holdings in the Company to Siem Europe S.a.r.l. on 30 December 2014, a wholly owned subsidiary.
Total number of outstanding shares
Other shareholders
307,874,599
2,939,932
2,850,000
FONDSFINANS AS
Total 20 largest shareholders
3,017,574
2,970,000
3,123,151
ALTA INVEST SA
VERDIPAPIRFONDET DNB SMB
3,257,300
DANSKE INVEST NORSKE AKSJER INST
PUMPØS AS
3,324,600
NORDEA BANK FINLAND PLC, MARKETS
3,733,085
JP MORGAN CLEARING CORP.
3,717,644
4,973,285
VARMA MUTUAL PENSION INSURANCE
3,366,602
5,313,000
OJADA AS
FONDSAVANSE AS
5,512,171
DANSKE INVEST NORSKE INSTIT. II.
MERRILL LYNCH,PIERCE,FENNER&S. INC
8,510,767
MP PENSJON PK
8,036,317
9,841,313
SKAGEN KON-TIKI
SKAGEN VEKST
10,977,629
FONDSFINANS SPAR
WATERMAN HOLDING LTD
76,780,808
12,350,000
ACE CROWN INTERNATIONAL LIMITED
133,279,421
NUMBER OF SHARES
SIEM EUROPE S.a.r.l.
SHAREHOLDER
Note 26 - Listing of the 20 Largest Shareholders as of December 31, 2014
91
92
Debt financing obtained for the three dualfuelled PSVs under construction in Poland.
Debt financing for three PSVs under
construction in Poland
Daya Materials Bhd. (“Daya”) has been
given until mid-April to arrange for financing and to pay the full 10% deposit on the
two 2013-built OSCVs “Siem Daya 1” and
“Siem Daya 2”, which are negotiated to be
sold to Daya. The subsequent delivery of
the vessels shall thereafter take place latest by mid July. The recent volatility in the
market for offshore vessels has increased
the uncertainty of this transaction to be
concluded. Both vessels are on long-term
charters to Daya.
A one year contract with Petrobras has
been agreed for the PSV “Siem Giant”.
The contract will commence no later than
September 2015.
Sale of two Offshore Subsea Construction Vessels
Charter contract for “Siem Giant” in
Brazil
-
-
Total
Realized gain/(loss)
Unrealized gain/(loss)
Further details related to the currency derivative contracts are set out in Note 15.
-
-
-
-
2013
2014
PARENT COMPANY
-3,023
2,590
-5,612
2014
-7,756
4,444
-12,200
2013
CONSOLIDATED
Siem Offshore Contractors GmbH awarded the contract for the turnkey supply and
installation package of the inner array
grid cable system for the 400 MW Veja
Mate Offshore Wind Farm. The contract,
estimated at a value in excess of Euro 100
Million, highlights the continued growth
in the Offshore Renewable Energy Market
for the Siem Offshore group.
Award of contract for the Veja Mate
offshore wind farm
The financial close for the Nordsee one
offshore wind farm was reached. The
project includes contracting work for the
wholly owned subsidiary of Siem Offshore
Inc, Siem Offshore Contractors GmbH
related to turnkey supply and installation
package of the inner grid cable system.
Recieved waiver of financial covenant
for the period 1Q 2015, from lenders and
guarantors, for certain mortgage backed
vessel financings.
Nordsee one offshore wind farm
reached financial close
Waiver of financial covenant
Note 28 - Gain/(Loss) on Currency Derivative Contracts
A USD 350 million loan and guarantee
facility has been signed for two new
well-intervention vessels (“WIVs”) under
construction in Germany. The WIVs are
scheduled for delivery during first half
of 2016, and both WIVs shall commence
7-year charters upon delivery from the
yard.
Signed USD 350 million loan and guarantee facility agreement
Petrobras informed in January 2015
that the current contracts for four AHTS
vessels employed in Brazil will not be
extended following contract expiry during
February 2015. Petrobras took similar
actions against all owners whose vessel
contracts were expiring. Alternative
employment shall be pursued globally for
these four vessels.
Expiring charter contracts with Petrobras in Brazil
Note 27 – Subsequent Events
151,810
Total
172,662
172,662
Other financial
liabilities
-
-
-
-
-
Available
for sale
189,394
16,732
172,662
Total
151,810
117,623
33,146
1,041
-
Total
101,206
221,981
Trade and other receivables (1)
Total
-
-
-
-
-
Assets at fair value through
the profit and loss
-
-
-
-
-
Available for
sale
-
-
Total
221,981
101,206
120,775
(1) Prepayments do not qualify as a financial instrument and are not included in above amount. Excluded prepayments amount to
USD 13,517, see Note 9.
-
120,775
-
Loans and
receivables
Financial assets held for sale
Assets as per statement of financial position
December 31, 2013
CONSOLIDATED
(1) Non-financial liabilities do not qualify as a financial instrument and are not included in above amount. Excluded liabilities amount to
USD 22,161 consisting of USD 10,438 in Taxes Payable, USD 2,778 in Pension Liability, USD 5,428 in Social Security Payable and
USD 3,517 in Unearned Income. See Note 13 for information about Social Security Payable and Unearned Income.
16,732
16,732
Total
-
Liabilities at fair value through
Bank debts, bonds, loans and other payables (1)
Liabilities as per statement of financial position
December 31, 2014
CONSOLIDATED
1,041
-
-
1,041
-
(1) Prepayments do not qualify as a financial instrument and are not included in above amount.
Excluded prepayments amount to USD 32,905, see Note 9.
33,146
117,623
1,041
-
Loans and
receivables
Financial assets held for sale
December 31, 2014
CONSOLIDATED
Below is a comparison by category for carrying amounts and fair values of all of the Company’s financial instruments.
Note 29 - Financial Instrument by Category
93
94
11,085
11,085
-
Liabilities at fair value
through the profit and loss
1,076,930
-
1,076,930
Other financial
liabilities
1,088,015
11,085
1,076,930
Total
299,215
222, 579
76,636
Loans and
receivables
-
-
-
-
Available for
sale
299,215
222,579
76,636
-
Total
Total
Bank debts, bonds, loans and other payables
December 31, 2014
PARENT COMPANY
-
-
-
203,387
-
203,387
Other financial
liabilities
203,387
-
203,387
Total
(1) Prepayments do not qualify as a financial instrument and are not included in above amount. Excluded prepayments amount to USD
3,480, see Note 9.
Total
Trade and other instruments (1)
December 31, 2014
PARENT COMPANY
(1) Non-financial liabilities do not qualify as a financial instrument and are not included in above amount. Excluded liabilities amount to
USD 22,161 consisting of USD 10,438 in Taxes Payable, USD 2,778 in Pension Liability, USD 5,428 in Social Security Payable and USD
3,517 in Unearned Income. See Note 13 for information about Social Security Payable and Unearned Income.
Total
Bank debts, bonds, loans and other payables (1)
December 31, 2013
CONSOLIDATED
-
-
-
-
-
Available for
sale
229,531
132,068
97,464
Interest income
Tax expense
6,976
-2,640
-3,119
261
-3,367
11,801
-921
-3,241
-
-56,809
Profit before taxes, excluding interest
Intercompany interest
Interest expenses
Net profit/(loss)
-4,845
-64,448
2013
2014
PARENT COMPANY
Reconciliation of net profit for the financial year to profit/(loss) before taxes, excluding interest.
140,739
-
140,739
Total
117,702
2,729
-4,188
-
48,451
70,710
2014
49,205
-3,585
-5,360
-
36,607
21,544
2013
CONSOLIDATED
140,739
-
140,739
Other financial
liabilities
-
Total
Note 30 – Profit Before Taxes, Excluding Interests
-
Bank debts, bonds, loans and other payables
December 31, 2013
Parent company
-
Total
(1) Prepayments do not qualify as a financial instrument and are not included in above amount. Excluded prepayments amount to
USD 1,872, see Note 9.
229,531
Total
-
-
132,068
-
97,464
Loans and
receivables
December 31, 2013
PARENT COMPANY
95
96
2017:
60% of the total number beginning on
April 2nd 2017, less any options previously
issued.
On the 02. April 2014, the Company
entered into a Share option agreement
with selected employees. The Board of
Directors of Siem Offshore Inc. has
authorized the award of 3,000,000 share
options to ten key employees of the
Company. The exercise price is NOK 9.07
per share. The exercise price of the
granted options is equal to the market
price of the shares on the date of the
grant.
2014 Share option program:
2015:
January 18th 2015, less any options
previously issued.
2014:
January 18th 2014
On the 13 january 2013, the Company entered into a Share option agreement with
selected employees. The Board of Directors of Siem Offshore Inc. has authorized
the award of 14,000,000 share options to
eight key employees of the Company. The
exercise price is NOK8.45 per share.
The exercise price of the granted options
is equal to the market price of the shares
on the date of the grant.
2013 Share option program:
The group has no legal or constructive
obligation to repurchase or settle the options in cash.
The weighted average fair value of options
granted during the period determined
using the Black-Scholes valuation model
was NOK 3.65 per option.
The significant inputs into the model were
weighted average share price of NOK 9.07
The exercise period shall in no event be
later than the date falling 10 years after
the award date.
2018:
April 2nd 2018, less any options
previously issued.
2019:
April 2nd 2019, less any options previously issued.
The group has no legal or constructive
obligation to repurchase or settle the
options in cash.
No options were exercised during 2013.
The weighted average fair value of options
The exercise period shall in no event be
later than the date falling 10 years after
the award date.
2018:
January 18th 2018, less any options previously issued.
2017
2016:
Note 31 – Share-based payments
Value of employee services as per
December 31, 2014 are recognized under
Retained earnings at USD 0,391 and yield
of 0%, an expected option life of 10 years
and an annual risk-free interest rate of
2.90% first three years
Total expense recognised in the income
statement for share options granted to
certain employees is USD 0.1 million.
The volatility measured at the standard
deviation of continuously compounded
share returns is based on statistical
analysis of daily share prices over the last
three years.
at the grant date, exercise price of NOK
9.07, volatility of 23%, dividend yield of
0%, an expected option life of 10 years and
an annual risk-free interest rate of 2.90%.
Total expense recognised in the income
statement for share options granted to
certain employees is USD 0.2 million.
Value of employee services as per
December 31, 2013 are recognized under
Retained earnings at USD 3,125.
The volatility measured at the standard
deviation of continuously compounded
share returns is based on statistical
analysis of daily share prices over the
last three years.
The significant inputs into the model
were weighted average share price of
NOK 8.45 at the grant date, exercise
price of NOK 8.45, volatility of 23%,
dividend yield of 0%, an expected option
life of 10 years and an annual risk-free
interest rate of 4.13%.
granted during the period determined
using the Black-Scholes valuation model
was NOK 3.72 per option.
-
Forfeited
Exercised
Expired
2,000,000
1,000,000
1,000,000
1,000,000
Tore B. Johannessen, Global HR Director
Celso Costa, General manager
Lars Muck, General manager
Tor Helge Egeland, General manager
-
17,000,000
200,000
1,200,000
1,200,000
1,200,000
2,400,000
2,400,000
2,400,000
2,400,000
3,600,000
Options outstanding as of 31
December 2014
17,000,000
-
-
-
3,000,000
14,000,000
14,000,000
-
-
-
14,000,000
Options
Outstanding
14,000,000
2,000,000
Bernt Omdal, CCO
Total outstanding
2,000,000
Svein Erik Mykland, COO
-
2,000,000
Dagfinn Lie, CFO
General managers
3,000,000
Options outstanding as of 31
December 2013
Terje Sørensen, CEO
Options outstanding for key managment
*Weighted average price at 31 December 2014.
Options outstanding at year-end and exercisable total 2 800 000 options and nil options for
2014 and 2013, respectively. Options expire 10 years after the date of grant.
8.56*
9.07
Granted
At 31 December 2014*
8.45
At 1 January 2014
-
Expired
8.45
-
Exercised
At 31 December 2013
-
Forfeited
8.45
Granted
At 1 January 2013
Exercise price per
share option, NOK
(*weighted average)
Movements in the number of share options outstanding and their exercise prices are as follows:
97
98
The Board of Directors has reviewed this
Statement on Social Responsibility
As a company incorporated in the Cayman
Islands, Siem Offshore Inc. (“The Company”) is an exempted company duly incorporated under the laws of the Cayman
Islands and subject to Cayman Island laws
and regulations with respect to corporate
governance. Cayman Islands corporate
law is to a great extent based on English
Law. In addition, due to The Company
being a Norwegian Tax Resident, the
Norwegian Accounting law applies to The
Company. According to the Norwegian Accounting Act $3-3c The Company should
provide a statement on social responsibility. The statement should include which
actions are taken by The Company to
integrate human rights, employee’s rights
and social conditions, external environment and the fight against corruption in its
business strategies, daily operations and
in relation to its interested parties.
Happy JayNii football team,
Accra, Ghana
Photo: Ellen Berchelmann
Protection of health, safety and the
prevention of pollution to the environment
are primary goals of The Company. All of
our employees and representatives must
Code of Conduct
The Company has established a Code of
Conduct policy expressing its non-tolerance on corruption as well as dealing with
ethical principles of the Company. The
Company is fully committed to perform
its business with integrity and transparency throughout its global operations. As
stated in the Code of Conduct Policy it is
the policy of the Company to conduct its
business in accordance with all applicable
laws and regulations and in an ethically
responsible manner.
statement. It is the opinion of the Board
of Directors that The Company complies with regulations in the Norwegian
Accounting law with respect to Social
Responsibility reporting.
The Company conducts its business with
honesty and integrity and competes fairly
The Company observes fair employment
practices in every aspect of its business.
The Company has implemented policies
and control procedures to ensure that only
proper transactions are entered into by
The Company, that such transactions have
proper management approval, that such
transactions are properly accounted for in
the books and records of The Company,
and the reports and financial statements
of The Company are prepared in a timely
manner, understandable and fully, fairly
and accurately reflect such transactions.
conduct their duties and responsibilities in
compliance with The Company’s policy on
Health, Safety and Environment, applicable law and industry standards relating
to health and safety in the workplace and
prevention of pollution to the environment.
MANGLER BILDE!
CORPORATE SOCIAL RESPONSIBILITY
The Company and any of its people shall
not pay money or provide gifts, entertainment, hospitality or any other thing or service of value to any Government Official.
This prohibition extends to payments to
consultants, agents or other intermediar-
Likewise, the Company does not itself
offer inducements to anyone associated
with business partners to promote a certain conduct or position by such business
partner.
The Company and its directors, officers
and employees will not accept any gift,
hospitality or travel benefit either directly
or indirectly from business partners,
against making commitment, recommending or promoting a certain conduct
or position by The Company or otherwise
seek to gain personal benefit in relation to
The Company’s business dealings.
No gift, hospitality or travel benefit may
be offered to or requested or accepted
from any third party if that benefit could
be seen to be disproportionately generous
or otherwise be seen as something which
may induce or make the recipient feel
obliged to reciprocate by way of improperly performing his or her function.
Improper payments
The Code of Conduct does also include
policies on improper payments. The Company does not tolerate any actions / payments which could be viewed as improper
payments.
and ethically within the framework of the
law. The Company has entered into agreements with well-known subcontractors for
the delivery of technical management and
crew management services to some of
the Company’s vessels. The Company has
also entered into shipbuilding contracts
with high standard shipbuilding yards in
Poland and Germany. These subcontractors are subject to review on an ongoing
basis. The Company expects that all of
its business partners have the same approach to business dealing.
At Christmas 2012 The Company donated
funds to Jaynii Streetwise in Ghana. No
funds have been donated in 2014. Jaynii
Streetwise is a charity and non-governmental organization founded in Ghana by
Jay Borquaye and Emmanuel (Nii) Quartey
in the deprived area of Jamestown (Accra) with the aim of improving the lives of
children and youth. Jaynii Streetwise was
born out of their Jaynii Cultural Troupe, a
traditional music and dance group which
The Company is dedicated in creating a
high-quality working environment under
which its people respect and trust each
other such that everyone acts in an
honest, friendly and proactive way with
a responsible attitude and high moral
standards. The Company prohibits bullying and harassment in any form including
sexual, racial, ethnic, and other forms of
harassment.
The Company is committed to employ
local staff where applicable and possible
in all countries where it is operating and
conducting business. The Company is
committed to providing equal opportunity
and fair treatment to all individuals on
the basis of merit, without discrimination
on the grounds of race, colour, religion,
national origin, sex, pregnancy, age, disability, marital status or other characteristics protected by applicable law.
The Company is fully committed to
comply with local laws and regulations
throughout its global operations.
Corporate Social Responsibility
The Company respects and promotes
harmonious working relationship with the
local communities where it operates, but
refrains from participating in local politics.
The Company seeks to foster a sustainable business for its many stakeholders.
ies when the payer knows or has reason to
believe that some part of the payment will
be used to bribe or otherwise influence a
public official.
Political contributions are not authorized.
The Company has furthermore previously
donated funds to Pro Criança Cardíaca
in Rio de Janeiro, Brasil, a non-profit
organization helping children with heart
diseases. Pro Criança Cardíaca is a hospital founded in 1996 by Cardiologist Doctor
Celia Rose. The mission of the organization is to provide medical care to cardiac
children focusing in cardiac surgery and
any other procedure that requires high
technology treatment to children. No
funds have been donated in 2014.
The Company has also made donations to
the Norwegian Salvation Army, Redningsselskapet and the street magazine “Klar”.
These 24 girls and 26 boys, who were
spending their childhood walking aimlessly on the Jamestown Beach, are now
enrolled at schools in the communitiesAccra Sempe Primary School in Classes
1 to 6 and St. Thomas Day Care Centre.
Jaynii, without assistance from parents,
buys them school uniforms, shoes, bags
and exercise books and registers them in
school. After school hours, the children
go to Jaynii Beach where they get fed as
well as get extra classes, homework help
and afternoon activities and entertainment.
During 2013 the Company has also
donated funds for the funeral and family
support of passed away gardener of the
Company’s office in Ghana.
Over time, Jaynii has identified the need
to support ongoing efforts by government
and civil society to keep children off the
streets and in school. As a poor, marginalized and deprived area, many children
are found walking on the beach and in the
streets during school hours. Most of these
children come from very deprived homes.
So far Jaynii has identified fifty children
aged between 4 to 16 years who have
been enrolled into the Streetwise Project,
based at Jaynii Beach, a small stretch of
beach just below the Jamestown lighthouse which is now their centre.
has performed at countless functions locally and internationally.
99
100
101
102
Director
(Sign.)
David Mullen
Director
(Sign.)
Chairman
(Sign.)
Michael Delouche
Director
(Sign.)
Kristian Siem
Eystein Eriksrud
13 April 2015
(Sign.)
Chief Executive Officer
Terje Sørensen
(Sign.)
Director
John C. Wallace
risks and uncertainties facing the entity and the group.
entity and the group, together with a description of the principal
ment and performance of the business and the position of the
Directors’ Report includes a true and fair review of the develop-
the group taken as a whole. We also confirm that the Board of
liabilities, financial position and profit or loss of the entity and
counting standards, and give a true and fair view of the assets,
have been prepared in accordance with current applicable ac-
statements for the period 1 January to 31 December 2014
We confirm, to the best of our knowledge that the financial
RESPONSIBILITY STATEMENT
Kristian Siem (born 1949),
Board member
Mr. Siem is chairman of Siem Industries
Inc., Subsea 7 S.A. and Siem Industrikapital AB and a director of Siem Shipping Inc.,
Flensburger Schiffbau-Gesellschaft mbH
& Co. KG, North Atlantic Smaller Companies Investment Trust plc. and NKT Holding A/S. Mr. Siem is a Norwegian citizen.
Eystein Eriksrud (born 1970), Chair
Mr. Eriksrud is the Deputy CEO of Siem
Industries Inc., the Company’s main
shareholder. He is further the chairman
of Electromagnetic Geoservices ASA and
a director of Subsea7 Inc. Prior to joining
Siem Industries in October 2011, he was
partner of the Norwegian law firm Wiersholm Mellbye & Bech since 2005 working as a business lawyer with an internationally oriented practice in mergers and
acquisitions, company law and securities
law, particularly in the shipping, offshore
and oil service sectors. He was Group
Company Secretary of the Kvaerner Group
from 2000-2002 and served as Group
General Counsel of the Siem Industries
Group from 2002-2005. He has served
on the boards of Privatbanken ASA and
Tinfos AS as well as a number of other
boards. Eriksrud is a Norwegian citizen.
David Mullen (born 1958),
Board member
David Mullen is the founder and CEO of
Shelf Drilling, an international shallow
water drilling contractor. Since the company’s inception in November 2012, David
has lead Shelf Drilling through a series of
complex transactions in establishing Shelf
Drilling with a fleet of 37 Jack-ups and 1
swamp barge and 2 new build rigs under
construction. Prior to Shelf Drilling, David
was CEO of Wellsteam Holdings PLC, a
UK-listed company that designs, manufactures and services subsea pipeline
products. From 2008 - 2010, David served
as CEO of Ocean Rig ASA, a Norway-listed
ultra-deep water drilling contractor. Prior
to 2008 David held executive management positions with Transocean and
Schlumberger Limited, including a 23 year
career with Schlumberger Limited.
Michael Delouche (born 1957),
Board member
Mr. Delouche is the president and the
secretary of Siem Industries Inc. and is
in charge of the Company’s operations at
the head office in George Town, Cayman
Islands. He is a director of Siem Shipping
Inc. and a former director of Subsea 7
Inc. Mr. Delouche received degrees in civil
engineering (structural) and business and
was previously an audit manager with
KPMG Peat Marwick LLP. Mr. Delouche is
a US citizen.
John C. Wallace (born 1938),
Board member
John C. Wallace is a Chartered Accountant having qualified with PricewaterhouseCoopers in Canada in 1963, after which he
joined Baring Brothers & Co., Limited in
London, England. Prior to his retirement
in 2010, he served for over twenty-five
years as Chairman of Fred. Olsen Ltd., a
London-based corporation that he joined
in 1968 and which specializes in the business of shipping, renewable energy and
property development. He received his B.
Comm degree majoring in Accounting and
Economics from McGill University in 1959.
In November 2004, he successfully completed the International Uniform Certified
Public Accountant Qualification Examination and has received a CPA Certificate
from the State of Illinois. Mr. Wallace
also retired from the board of directors of
Ganger Rolf ASA and Bonheur ASA, Oslo,
both publicly-traded shipping companies
with interests in offshore energy services
and renewable energy. He is a Director of
Callon Petroleum Co , USA where he is
Chairman of the Audit Committee. He was
inducted as a 2011 Industry Pioneer by the
Offshore Energy Centre in Houston. Mr.
Wallace is a Canadian citizen.
the company’s management does attend Board meetings.
Company’s management are not members of the Board, but
The Company has a Board of five Directors. Members of the
BOARD OF DIRECTORS
103
104
Thursday 29 October
Q2 2015
Q3 2015
The Annual General Meeting of the company will be held on Friday 1 May 2015.
Wednesday 20 May
Thursday 20 August
Q1 2015
Siem Offshore Inc. will release financial figures on the following dates in 2015:
FINANCIAL CALENDAR 2015
www.siemoffshore.com
[email protected]
E-mail:
+47 37 40 62 86
Telefax:
+47 38 60 04 00
Telephone:
P.O. Box 425
N-4664 Kristiansand S, Norway
Postal address:
JV:PLT6MMZOVYL(:
Nodeviga 14
4610 Kristiansand
Norway
Siem Offshore Inc
105
INNOVENTI
Appendix C: Subscription Form
SIEM OFFSHORE INC.
RIGHTS ISSUE
SUBSCRIPTION FORM
Securities no. ISIN KYG813131011
General information: The terms and conditions of the Rights Issue by Siem Offshore Inc. (the “Company”)
are set out in the prospectus dated 17 August 2015 (the “Prospectus”). Terms defined in the Prospectus shall
have the same meaning in this Subscription Form. All announcements referred to in this Subscription Form
will be made through Oslo Børs’ information system under the Company’s ticker “SIOFF”.
Subscription procedures: The subscription period is from 19 August 2015 to 16:30 hours (CET) on 2
September 2015 (the “Subscription Period”). Correctly completed Subscription Forms must be received by the
Manager or the Receiving Agent before the end of the Subscription Period at one of the following addresses:
Swedbank, P.O Box 1441 Vika, N-0115 Oslo, Norway, telefax +47 23 23 80 11 or DNB Markets,
Registrar Department, P.O. Box 1600 Sentrum, N-0021 Oslo, Norway, [email protected] (the
“Subscription Offices”). The subscriber is responsible for the correctness of the information filled in on the
Subscription Form. Subscription Forms that are incomplete or incorrectly completed, or that are received after
the end of the Subscription Period, and any subscription that may be unlawful, may be disregarded, at the
discretion of the Manager or the Receiving Agent on behalf of the Company. Subscribers who are residents
of Norway with a Norwegian personal identification number may also subscribe for Offer Shares
through the VPS online subscription system by following the link on any of the following websites:
www.swedbank.no or www.dnb.no/emisjoner. Subscriptions made through the VPS online subscription
system must be duly registered before the expiry of the Subscription Period. Neither the Company, the
Manager nor the Receiving Agent may be held responsible for postal delays, unavailable fax lines, internet
lines or servers or other logistical or technical problems that may result in subscriptions not being received in
time or at all by the Subscription Offices. Subscriptions are irrevocable and binding upon receipt and cannot
be withdrawn, cancelled or modified by the subscriber after having been received by an Subscription Office, or
in the case of subscriptions through the VPS online subscription system, upon registration of the subscription.
Subscription Price: The Subscription Price in the Rights Issue is NOK 1.80 per Offer Share.
Subscription Rights: Registered holders of the Company’s shares (the “Existing Shareholders”) as appearing
in the VPS as of 18 August 2015 (the “Record Date”) will be granted Subscription Rights giving a preferential
right to subscribe for, and be allocated, the Offer Shares. Each Existing Shareholder will be granted 1.1724
Subscription Rights per existing share registered with the respective Existing Shareholder on the Record Date.
The number of Subscription Rights issued to each Existing Shareholder will be rounded down to the nearest
whole Subscription Right. Each Subscription Right will, subject to applicable securities laws, give the right to
subscribe for and be allocated one Offer Share in the Rights Issue. Over-subscription and subscription without
Subscription Rights is permitted. Subscription Rights not used to subscribe for Offer Shares before 31
August 2015 will lapse without compensation to the holder, and, consequently, will be of no value
from that point in time.
Allocation of Offer Shares: The Offer Shares will be allocated to the subscribers based on the allocation
criteria set out in the Prospectus. The Company reserves the right to reject or reduce any subscription for
Offer Shares not covered by Subscription Rights. The Company will not allocate fractional Offer Shares.
Allocation of fewer Offer Shares than subscribed for does not impact on the subscriber’s obligation to pay for
the Offer Shares allocated. Notification of allocated Offer Shares and the corresponding subscription amount to
be paid by each subscriber is expected to be distributed in a letter from the VPS on or about 4 September
2015. Subscribers who have access to investor services through an institution that operates the subscriber’s
VPS account should be able to see how many Offer Shares they have been allocated from 12:00 hours (CET)
on or about 4 September 2015.
Payment: In completing this Subscription Form, or registering a subscription through the VPS online subscription system, subscribers authorise each of Swedbank and DNB Markets
to debit the subscriber’s Norwegian bank account for the total subscription amount payable for the Offer Shares allocated to the subscriber. Accounts will be debited on or about 14
September 2015 (the “Payment Date”), and there must be sufficient funds in the stated bank account from and including the date falling 2 banking day prior to the Payment Date.
Subscribers who do not have a Norwegian bank account must ensure that payment for the allocated Offer Shares is made on or before the Payment Date. Details and instructions can
be obtained by contacting Swedbank, telephone: +47 23 23 80 00 or DNB Markets, telephone: + 47 22 94 88 80. Swedbank and DNB Markets together are only authorized to debit
each account once, but reserves the right (but has no obligation) to make up to three debit attempts through 21 September 2015 if there are insufficient funds on the account on the
Payment Date. Should any subscriber have insufficient funds in his or her account, should payment be delayed for any reason, if it is not possible to debit the account or if payments
for any other reasons are not made when due, overdue interest will accrue and other terms will apply as set out under the heading “Overdue and missing payments” below.
PLEASE SEE PAGE 2 OF THIS SUBSCRIPTION FORM FOR OTHER PROVISIONS THAT ALSO APPLY TO THE SUBSCRIPTION
DETAILS OF THE SUBSCRIPTION
Subscriber’s VPS account:
Number of Subscription Rights:
SUBSCRIPTION RIGHT’S SECURITIES NUMBER: ISIN KYG812291097
Number of Offer Shares subscribed
(incl. over-subscription):
(For broker: consecutive no.):
Subscription Price per Offer Share:
Subscription amount to be paid:
NOK 1.80
NOK
IRREVOCABLE AUTHORIZATION TO DEBIT ACCOUNT (MUST BE COMPLETED BY SUBSCRIBERS WITH A NORWEGIAN BANK ACCOUNT)
Norwegian bank account to be debited for the payment for Offer Shares allocated (number
of Offer Shares allocated x NOK 1.80).
(Norwegian bank account no.)
I/we hereby irrevocably (i) subscribe for the number of Offer Shares specified above subject to the terms and conditions set out in this Subscription Form and in the Prospectus, (ii)
authorize and instruct each of the Manager and the Receiving Agent (or someone appointed by any of them) acting jointly or severally to take all actions required to transfer such
Offer Shares allocate to me/us to the VPS Registrar and ensure delivery of the beneficial interests to such Offer Shares to me/us in the VPS, on my/our behalf, (iii) authorize
Swedbank and DNB Markets to debit my/our bank account as set out in this Subscription Form for the amount payable for the Offer Shares allotted to me/us, and (iv) confirm and
warrant to have read the Prospectus and that I/we are eligible to subscribe for Offer Shares under the terms set forth therein.
Place and date
Binding signature
must be dated in the Subscription Period.
The subscriber must have legal capacity. When signed on behalf of a company or
pursuant to an authorization, documentation in the form of a company certificate
or power of attorney must be enclosed.
INFORMATION ON THE SUBSCRIBER – ALL FIELDS MUST BE COMPLETED
First name
Surname/company
Street address
Post code/district/
country
Personal ID number/
organization number
Nationality
E-mail address
Daytime telephone
number
ADDITIONAL GUIDELINES FOR THE SUBSCRIBER
Regulatory issues: In accordance with the Markets in Financial Instruments Directive (“MiFID”) of the European Union, Norwegian law imposes requirements in relation to
business investments. In this respect, the Manager and the Receiving Agent must categorize all new clients in one of three categories: eligible counterparties, professional
clients and non-professional clients. All subscribers in the Rights Issue who are not existing clients of either the Manager or the Receiving Agent will be categorized as nonprofessional clients. Subscribers can, by written request to either the Manager or the Receiving Agent, ask to be categorized as a professional client if the subscriber fulfils the
applicable requirements of the Norwegian Securities Trading Act. For further information about the categorization, the subscriber may contact Swedbank (Sedbank, Filipstad
Brygge 1, P.O Box 1441 Vika, N-0115 Oslo, Norway) or DNB Markets (DNB Markets, KSC - Customer Administration, P.O. Box 7100, NO5020 Bergen, Norway or
www.dnb.no/en/mifid). The subscriber represents that he/she/it is capable of evaluating the merits and risks of a decision to invest in the Company by
subscribing for Offer Shares, and is able to bear the economic risk, and to withstand a complete loss, of an investment in the Offer Shares.
Selling Restrictions: The attention of persons who wish to subscribe for Offer Shares is drawn to Section 14 “Selling and transfer restrictions” of the Prospectus. The Company
is not taking any action to permit a public offering of the Subscription Rights or the Offer Shares (pursuant to the exercise of the Subscription Rights or otherwise) in any
jurisdiction other than Norway. Receipt of the Prospectus will not constitute an offer in those jurisdictions in which it would be illegal to make an offer and, in those
circumstances, the Prospectus is for information only and should not be copied or redistributed. Persons outside Norway should consult their professional advisors as to whether
they require any governmental or other consent or need to observe any other formalities to enable them to subscribe for Offer Shares. It is the responsibility of any person
wishing to subscribe for Offer Shares under the Rights Issue to satisfy himself as to the full observance of the laws of any relevant jurisdiction in connection therewith, including
obtaining any governmental or other consent which may be required, the compliance with other necessary formalities and the payment of any issue, transfer or other taxes due
in such territories. The Subscription Rights and Offer Shares have not been registered, and will not be registered, under the United States Securities Act of 1933, as amended
(the “U.S. Securities Act”) and may not be offered, sold, taken up, exercised, resold, delivered or transferred, directly or indirectly, within the United States, except pursuant to
an applicable exemption from the registration requirements of the U.S. Securities Act and in compliance with the securities laws of any state or other jurisdiction of the United
States. The Subscription Rights and Offer Shares have not been and will not be registered under the applicable securities laws of Australia, Canada or Japan and may not be
offered, sold, taken up, exercised, resold, delivered or transferred, directly or indirectly, in or into Australia, Canada or Japan. This Subscription Form does not constitute an
offer to sell or a solicitation of an offer to buy Offer Shares in any jurisdiction in which such offer or solicitation is unlawful. A notification of exercise of Subscription Rights and
subscription of Offer Shares in contravention of the above restrictions may be deemed to be invalid. By subscribing for the Offer Shares, persons effecting subscriptions will be
deemed to have represented to the Company that they, and the persons on whose behalf they are subscribing for the Offer Shares, have complied with the above selling
restrictions.
Execution Only: The Manager or the Receiving Agent will treat the Subscription Form as an execution-only instruction. The Managerand the Receiving Agent are not required
to determine whether an investment in the Offer Shares is appropriate or not for the subscriber. Hence, the subscriber will not benefit from the protection of the relevant
conduct of business rules in accordance with the Norwegian Securities Trading Act.
Information exchange: The subscriber acknowledges that, under the Norwegian Securities Trading Act and the Norwegian Commercial Banks Act and foreign legislation
applicable to the Manager and the Receiving Agent there is a duty of secrecy between the different units of each of the Manager and the Receiving Agent as well as between the
Manager and the Receiving Agent and the other entities in their respective groups. This may entail that other employees of the Manager and the Receiving Agent or the their
respective groups may have information that may be relevant to the subscriber and to the assessment of the Offer Shares, but which the Manager or the Receiving Agent will
not have access to in their capacity as Manager and Receiving Agent for the Offering.
Information barriers: The Manager and the Receiving Agent are securities firms that offer a broad range of investment services. In order to ensure that assignments
undertaken in the Manager and the Receiving Agent's corporate finance departments are kept confidential, the Manager and the Receiving Agent's other activities, including
analysis and stock broking, are separated from the their respective corporate finance departments by information walls. Consequently the subscriber acknowledges that the
Manager and the Receiving Agent's analysis and stock broking activity may conflict with the subscriber’s interests with regard to transactions in the Shares, including the Offer
Shares.
VPS account and mandatory anti-money laundering procedures: The Offering is subject to the Norwegian Money Laundering Act of 6 March 2009 No. 11 and the
Norwegian Money Laundering Regulations of 13 March 2009 No. 302 (collectively, the “Anti-Money Laundering Legislation”). Subscribers who are not registered as existing
customers of either the Manager or the Receiving Agent must verify their identity to one of the Manager and the Receving Agent in accordance with requirements of the AntiMoney Laundering Legislation, unless an exemption is available. Subscribers who have designated an existing Norwegian bank account and an existing VPS account on the
Subscription Form are exempted, unless verification of identity is requested by the Manager or Receiving Agent. Subscribers who have not completed the required verification of
identity prior to the expiry of the Subscription Period will not be allocated Offer Shares. Participation in the Offering is conditional upon the subscriber holding a VPS account.
The VPS account number must be stated in the subscription form. VPS accounts can be established with authorized VPS registrars, who can be Norwegian banks, authorized
securities brokers in Norway and Norwegian branches of credit institutions established within the EEA. Establishment of a VPS account requires verification of identity to the VPS
registrar in accordance with the Anti-Money Laundering Legislation. However, non-Norwegian investors may use nominee VPS accounts registered in the name of a nominee.
The nominee must be authorized by the Financial Supervisory Authority of Norway.
Terms and conditions for payment by direct debiting - securities trading: Payment by direct debiting is a service the banks in Norway provide in cooperation. In the
relationship between the payer and the payer’s bank the following standard terms and conditions apply:
a)
The service “Payment by direct debiting – securities trading” is supplemented by the account agreement between the payer and the payer’s bank, in particular
Section C of the account agreement, General terms and conditions for deposit and payment instructions.
b)
Costs related to the use of “Payment by direct debiting – securities trading” appear from the bank’s prevailing price list, account information and/or information
given in another appropriate manner. The bank will charge the indicated account for costs incurred.
c)
The authorization for direct debiting is signed by the payer and delivered to the beneficiary. The beneficiary will deliver the instructions to its bank that in turn will
charge the payer’s bank account.
d)
In case of withdrawal of the authorization for direct debiting the payer shall address this issue with the beneficiary. Pursuant to the Norwegian Financial Contracts Act
the payer’s bank shall assist if the payer withdraws a payment instruction that has not been completed. Such withdrawal may be regarded as a breach of the
agreement between the payer and the beneficiary.
e)
The payer cannot authorize payment of a higher amount than the funds available on the payer’s account at the time of payment. The payer’s bank will normally
perform a verification of available funds prior to the account being charged. If the account has been charged with an amount higher than the funds available, the
difference shall immediately be covered by the payer.
f)
The payer’s account will be charged on the indicated date of payment. If the date of payment has not been indicated in the authorization for direct debiting, the
account will be charged as soon as possible after the beneficiary has delivered the instructions to its bank. The charge will not, however, take place after the
authorization has expired as indicated above. Payment will normally be credited the beneficiary’s account between one and three working days after the indicated
date of payment/delivery.
g)
If the payer’s account is wrongfully charged after direct debiting, the payer’s right to repayment of the charged amount will be governed by the account agreement
and the Norwegian Financial Contracts Act.
Overdue and missing payments: Overdue payments will be charged with interest at the applicable rate under the Norwegian Act on Interest on Overdue Payment of 17
December 1976 No. 100; 9.00% per annum as of the date of the Prospectus. If the subscriber fails to comply with the terms of payment or should payments not be made when
due, the subscriber will remain liable for payment of the Offer Shares allocated to it and the Offer Shares allocated to such subscriber will not be delivered to the subscriber. In
such case the Company, Swedbank and DNB Markets reserve the right to, at any time and at the risk and cost of the subscriber, re-allot, cancel or reduce the subscription and
the allocation of the allocated Offer Shares, or, if payment has not been received by the third day after the Payment Date, without further notice sell, assume ownership to or
otherwise dispose of the allocated Offer Shares in accordance with applicable law. If Offer Shares are sold on behalf of the subscriber, such sale will be for the subscriber’s
account and risk and the subscriber will be liable for any loss, costs, charges and expenses suffered or incurred by the Company, Swedbank and/or DNB Markets as a result of,
or in connection with, such sales. The Company, Swedbank and/or DNB Markets may enforce payment for any amounts outstanding in accordance with applicable law.
Siem Offshore Inc.
Harbour Place 5th Floor
P.O.Box 10718
George Town
Cayman Islands
Nodeviga 14
4610 Kristiansand
Norway
Lead Manager
Swedbank
Filipstad Brygge 1
P.O Box 1441 Vika
N-0115 Oslo
Norway
Tel: +47 23 23 80 00
Fax: +47 23 23 80 11
www.swedbank.no
Receiving Agent
DNB Markets Registrars Department
Dronning Eufemias gate 30
P.O. Box 1600 Sentrum
N-0021 Oslo
Norway
Tel.: +47 23 26 81 01
Email: [email protected]
www.dnb.no/emisjoner
Legal counsel
Advokatfirmaet Wiersholm AS
Dokkveien 1
Postboks 1400 Vika, 0115 Oslo
Norway
Tel: +47 21 02 10 00
117

Siem Offshore Inc.

Transcription

Similar documents

Celigo - Calcey Technologies

texaco petronius

Jeroen Witteveen (CWI)

How to Subscribe Daily Thanthi E-paper? Step 1: Log on to http

What`s making headlines today and the changing

angkor wat - Coral Expeditions

Untitled - Coremar

Tarot copy - Aim4Media

Part 3a

Grandweld | Waves - Stanford Marine Group