MPV Everest for sale…

If you had been paid the contracted SGD 265m for the MPV Everest I am not sure it would appear on LinkedIn as in the recent photo above? I love this statement:

MPV Everest can carry out subsea repair and construction activities at 3000 metres of water depth, well intervention, diving support services with an 18-men twin-bell system, fire-fighting and emergency rescue operations, as well as towing and the provision of supplies in Arctic terrain.

Having a DSV that can operate at 3000m is like having an aeroplane that can also fly to the moon, interesting but dramatically over-specified, given that divers are limited to 300m (and more commonly 200m now)? Yes, I get the crane and ROVs can be used at that depth… but why hire a DSV then? And quite why you would need an 18 man SAT system for the provision of supplies to the Arctic is beyond me?

Incidentially, if I had paid SGD 265m for a vessel I also would want it to be slightly better looking? Personal taste I guess…

But then again I am pretty sure no one has paid more than the progress payments for this vessel yet… If they get half the contract value I will be impressed (see here).

These types of assets that were ordered in the boom to do everything seem the most exposed in value terms while the market remains chronically oversupplied. If Keppel cannot get rid of this, and there are a very limited number of buyers, before the UDS vessels start arriving next year then all that beckons is a race to the bottom in day rates as supply  continues to outpace even a modest recovery in demand.

Looks a lot like this:

White Elephant

I still remain surprised at the lack of public comment on this from Keppel. The relevant SGX continuous disclosure requirements would appear clear:

SGX Cont Disc.png

Not getting paid for a SGD 265m asset, that is in all reality worth significantly less, would appear to “materially affect the price or value”? Nine figure write-offs, even for a company the size of Keppel, tend to have that effect?

Who knows? Maybe PWC as auditors for Vard and Keppel could ask them to park the DSVs at the same location? That way they could save money as once a year an audit junior could go out, inspect the DSVs, confirm they were there and in good condition, hadn’t worked for a another year, but were still worth nearly exactly what someone had agreed to pay for them before they went bankrupt, and despite day rates for comparable vessel dropping somewhere between 40-60%?

Given it is now April this vessel will have no regular work, of any of substance, in  the 2018 calender year as the schedules are now effectively secured. Combined with the fact that this is by an order of magnitude the most expensive DSV in Asia (in cost terms) things are not looking good for Keppel here. The strategy of building the most expensive DSV in the world and seeing if it will force companies to upgrade their tonnage is getting a  pure natural experiment here before more similar vessels arrive. Serious buyers can be very patient here… the sellers? Maybe not so much.

2 thoughts on “MPV Everest for sale…

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