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Petrofac sells SD6000 project to ZPMC for US$190mln

The oil and gas engineering group will retain an interest in the project, but won't need to fund construction, commissioning or testing operations

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Some US$92mln of cash will be paid within 20 days

Petrofac Limited (LON:PFC) has agreed a US$190mln deal to sell its SD6000 project to Shanghai Zhenhua Heavy Industries Co Ltd (ZPMC).

The London-listed oil and gas engineer will additionally by given a 10% stake in a new special purpose vehicle set up to own the SD6000 vessel once commissioned.

READ: Petrofac lands US$135mln lump-sum contract in India

It won’t contribute to construction, commissioning or testing costs but it will provide technical support through the process. The SD600 vessel is due to be complete in 2022.

"This agreement materially completes our disposal of the project, in line with our stated intention to exit the deep-water market,” said Ayman Asfari, Petrofac chief executive in a statement.

“It is a further positive step in the execution of our stated strategy to focus on our core strengths, deliver organic growth and reduce capital intensity."

The gross US$190mln included a US$23mln amount held by Petrofac, under a previous arrangement with ZPMC, and the remaining US$167mln of cash will be received in tranches – the first US$92mln due within 20 days, and other US$70mln paid in stages tied to the transfer of physical assets and certain project milestones.

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Price: 400.5 GBX

LSE:PFC
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Market Cap: £13.84 m
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