So Saipem has paid a headline figure of USD 275m to take out the Constellation, but based on this statement I don’t think the Italians handed over that money in cash as this statement makes clear:
The Constellation will be acquired for USD 275 million through the partial utilization of available liquidity. The 2018 Capex and Net debt guidance, as provided on March 6th 2018, did not include this investment. [Emphasis added].
As in they have partially paid for it with cash and got DNB to lend them a ton of money to take it out. A low interest rate and generous payment terms dramatically de-risk this for Saipem and with a bit of inflation could make the purchase price substantially less in real terms.
Yes the price discount doesn’t make it as cheap as McDermott taking out the Amazon, but the financing for that was arranged through Offshore Merchant Partners as a sale-and-leaseback, which is a long way of saying MDR were cash buyers. Boskalis also got a big discount as cash buyers at the high end for one Nor vessel and a short term charter on the other.
But as my original post made clear the banks have still lost a lot of money here, with 2 mortgages of USD 470m originally, but I still think they will be pleased with this. The original Subsea7 deal for the vessel had a purchase option at USD 370m, so the banks have obviously lowered their expectations since then, running costs of USD 15-20k per day tend to have that effect. I had heard the Chinese were trying to buy it for USD ~180m which would have felt really painful. Saipem on the other hand get a tie-back vessel at below the economic cost, stop anyone else getting the asset, and in all likelihood the deal includes a financial package at well below “market” rates (if there is such a thing for an asset like this).