Golden Close Maritime Corp. Ltd. - ISIN NO ISIN NO Report Q (unaudited)

Transcription

1 Golden Close Maritime Corp. Ltd. - ISIN NO ISIN NO Report Q (unaudited) Golden Close Maritime Corp. Ltd. (Issuer) Golden Close Maritime Corp. Ltd. Group (Issuer Group) Business activities Following the end of the contract in South-East Asia, Deepsea Metro I was moved back to Labuan, Malaysia, where it is laid-up awaiting new employment. The vessel is being marketed for potential contracts world-wide. Market Outlook and Risk Factors The Issuer provides drilling services for the oil and gas industry, which historically has shown a cyclical development. The level of activity in the offshore oil and gas industry will, among other things, depend on the general climate in the global economy, oil and gas prices, investment patterns for oil and gas exploration, production and drilling, and regulatory issues with respect to operational safety and environmental hazards. Financial performance will also depend on the demand and supply balance for mobile drilling units. The weakening of the drilling and oil service market has further continued in 2017 and the Issuer does not see any signs of material improvement near- to medium term. Oil and gas companies still focus on cost cutting programs and capital discipline which have led to reduced demand for drilling capacity. There is still a substantial pipeline of newbuild UDW drillships coming from yards, and the trend of postponing deliveries has continued. The results are an increasing number of stacked units and continued downward pressure on day rates and asset values. There are contract opportunities for Deepsea Metro I in the current and near term market, but competition is fierce. The Issuer expects the deep- and ultra deepwater market to be oversupplied for a period going forward. The Issuer and the drillship manager seek new drilling contracts for Deepsea Metro I wherever possible, in an effort to keep the drillship employed and avoid long-term stacking. Financial risk factors The Issuer`s objective is to maintain a balance between continuity of funding and flexibility through the use of credit facilities and to have sufficient cash or cash equivalents at any time to be able to finance its investments and future operations in accordance with its strategic plan. The Issuer monitors its liquidity risk by considering the maturity of both its financial investments and financial assets and projected future cash flow from operations. On 29 March 2017 the Issuer completed restructuring with respect to its USD 400 million bond agreement. The restructuring includes extending the drillship management agreement and amending the bond agreement. The restructuring implies inter alia that the Issuer has significantly reduced interest bearing debt, new working capital of USD 10 million through issue of super senior secured bonds and additional USD 40 million in possible issue of super senior secured bonds. The restructuring as well as cost saving measures and other measures to reduce the Issuer's liquidity risk ensures that the Issuer can secure and fulfil new contracts for the drillship. The contracts awarded in 2017 also contribute to secure

2 operational cash flow in The Company is dependent of new drilling contracts in the future to secure operational cash flow or capital contribution to fulfil its operational and financial obligations. The Issuer Group and the drillship manager focus on securing employment for Deepsea Metro I and thereby avoid cold stacking of the drillship. There is a joint understanding between the Issuer Group and its bondholders that keeping the unit warm and occupied on short- to medium term contracts in today s challenging drilling market is the best way of maintaining the value of the drillship, even if prevailing market day rates may not fully cover operational costs, nor allow the Issuer to properly service its debt obligations. Interest risk From and including 30 March 2017, interest will accrue on Senior Secured Bond of USD 100 millions and Super Senior Secured Bond of USD 10 million. The Issuer may elect cash or non-cash payment of the interest with a quarterly coupon of 8% p.a. if paid in cash and 12% p.a. if paid in kind through the issuance of additional bonds for the Senior Secured Bond and 10% p.a or 15% p.a for the Super Senior Secured Bond. The Issuer will consider entering into interest hedging in connection with any other future external long-term debt obligations. Ownership Golden Close Maritime Corporation Ltd. ( the Parent ) was incorporated under the laws of Bermuda as a private limited liability company on 4 September As of 30 September 2017, the authorised share capital of the Parent was USD 400,000,000. Issued share capital of the Parent was 4,572,694 whereof 2,286,347 shares were issued at par value USD 2. Each share carries one vote, and otherwise confers equal rights in the Parent. The Parent is a drillship-owning company and holding Company for five companies with limited activity, which it owns 100 per cent. Financial information The financial figures have been prepared in accordance with simplified IFRS (International Financial Reporting Standards) pursuant to section 3-9 of the Norwegian Accounting Act and with the Directives of simplified IFRS specified by the Norwegian Ministry of Finance on 21 January Golden Close Maritime Corp. Ltd. Group The Issuers Group s operating revenue was USD 9.1 million in Q In Q the Issuers Group s operating revenue was USD 8.2 million. Operating expenses in the Issuer Group amounted to USD 14.5 million in Q3 2017, a decrease from USD 18.7 million in Q2 2017, due to decreased activity in Q3 following the termination of the contract in South-East Asia. The operating loss was USD 5.4 million in Q compared to a loss of USD 10.1 million in Q Net financial loss in the Issuer Group was USD 3.5 million in Q compared to USD 3.3 in Q As of 30 September 2017, the total assets of the Issuer Group amounted to USD 359 million, compared to USD 367 million as of 30 June 2017.

3 Cash and cash equivalents in the Issuer Group were USD 21.2 million as of 30 September 2017 compared to USD 26.0 million as of 30 June Other current assets were USD 19.7 million at 30 September 2017, compared to USD 17.4 million at 30 June The book value of Deepsea Metro I was USD 318 million at 30 September The Issuer has received broker valuations of Deepsea Metro I from two independent brokers. The valuations are dated in August The average of the broker valuations is USD million. The lowest point in the valuation is USD 275 million and the highest is USD 425 million. The valuations are excluding any charter values and otherwise based on market standard assumptions. Due to market conditions, current employment and market outlook the board is of the opinion that the book value reflects a best estimate. Long- term liabilities as of 30 September 2017 amounted USD million and comprise USD 10.8 million in super senior secured bond, USD 106 million in senior secured bond. Total liabilities amounted to USD 127 million as per 30 September 2017, compared to USD 125 million as per 30 June The increase is due to conversion of interest to bonds. On 30 September 2017, the total equity of the Issuer Group was positive of USD 232 million compared to USD 241 million as per 30 June The change in equity is explained by loss of USD 9 million in the period. Events after the reporting day: There are not substantial events after the reporting day. 24 November 2017 The Board of Directors Golden Close Maritime Corp. Ltd. Hamilton, Bermuda ENCLOSURE Significant accounting principles The accounting principles used in the preparation of this third quarter report for 2017 are consistent with those used in the annual financial statements for the year ending 31 December These consolidated condensed financial statements should be read together with the annual financial statements for 2016, which include a full description of the group s accounting policies.

4 GOLDEN CLOSE MARITIME CORP LTD. GROUP - ISSUER GROUP REPORT Q (UNAUDITED) INCOME STATEMENT (USD) Operating revenues Operating expenses ( ) ( ) ( ) ( ) ( ) ( ) ( ) Operating profit / (loss) ( ) ( ) ( ) ( ) ( ) ( ) ( ) Interest income Interest cost ( ) ( ) ( ) ( ) ( ) ( ) ( ) Other finance income / (costs) ( ) (23 773) (27 963) ( ) ( ) ( ) Pre-tax profit / (loss) ( ) ( ) ( ) ( ) ( ) ( ) ( ) Taxes (22 015) (22 026) 11 - ( ) - ( ) Net profit / (loss) ( ) ( ) ( ) ( ) ( ) ( ) ( ) BALANCE SHEET Fixed assets Mobile Drilling Units Other non-current assets Current assets Other current assets Cash and cash equivalents Total assets Equity Issued capital Other contribued capital Retained earnings ( ) ( ) ( ) ( ) ( ) ( ) ( ) Debt - Long-term liabilities Short-term liabilities Total equity and liabilities CASH FLOW STATEMENT Cash flow from operations ( ) ( ) ( ) ( ) ( ) ( ) ( ) Cash flow from investment activities ( ) (525) ( ) ( ) ( ) ( ) Cash flow from financing activities (44 508) (9 517) (32 094) Cash flow for the period ( ) ( ) ( ) ( ) ( ) ( ) Cash and cash equiv. at start of period Cash and cash equiv. at end of period Changes in Equity Shareholders' equity at beginning of period ( ) ( ) ( ) ( ) Contributions and other changes in equity ( ) Profit/(loss) at end period ( ) ( ) ( ) ( ) ( ) ( ) ( ) Equity at end of period ( ) ( ) ( ) Shares Number of shares

5 GOLDEN CLOSE MARITIME CORP LTD. - ISSUER REPORT Q (UNAUDITED) INCOME STATEMENT (USD) Operating revenues Operating expenses ( ) ( ) ( ) ( ) ( ) ( ) ( ) Operating profit ( ) ( ) ( ) ( ) ( ) ( ) ( ) Income /(loss) from subsidiaries (50 166) - (50 166) Interest income Interest cost ( ) ( ) ( ) ( ) ( ) ( ) ( ) Other finance income / (costs) ( ) (30 761) (25 145) ( ) ( ) ( ) ( ) Pre-tax profit ( ) ( ) ( ) ( ) ( ) ( ) ( ) Taxes ( ) - - Net profit/loss ( ) ( ) ( ) ( ) ( ) ( ) ( ) BALANCE SHEET Fixed assets Mobile Drilling Units Investments in subsidiaries Current assets - Other current assets Cash and cash equivalents Total assets Equity Issued capital Other contribued capital Retained earnings ( ) ( ) ( ) ( ) ( ) ( ) ( ) Debt - Long-term liabilities Short-term liabilities Total equity and liabilities CASH FLOW STATEMENT Cash flow from operations ( ) ( ) ( ) ( ) ( ) ( ) ( ) Cash flow from investment activities ( ) (525) ( ) ( ) ( ) ( ) Cash flow from financing activities (11 100) Cash flow for the period ( ) ( ) ( ) ( ) ( ) ( ) Cash and cash equiv. at start of period Cash and cash equiv. at end of period Changes in Equity Shareholders' equity at beginning of period ( ) ( ) ( ) ( ) Contributions and other changes in equity ( ) Profit/(loss) at end period ( ) ( ) ( ) ( ) ( ) ( ) ( ) Equity at end of period ( ) ( ) ( ) Shares Number of shares