HONG KONG — Honghua (Stock Code: 196.HK), a leading global land drilling rig manufacturer, today announce that subsequent to the previous announcement issued on December 27 in relation to the proposed disposal of its offshore business through the Public Tender, the Company announced that the disposal have been publicly listed for sale on the Shanghai United Assets and Equity Exchange (“SUAEEX”) starting from December 28, 2017 at a total consideration of approximately RMB1.7 billion and the bidding period is expected to be ended on January 25, 2018.
According to the publicly disclosed information of SUAEEX, the offshore business under the tender will include: Honghua’s 100% indirect equity interest in Honghua Offshore oil & gas equipment (Jiangsu) Co., Ltd., (“Jiangsu Offshore”), a wholly-owned subsidiary of the Group; 100% indirect equity interest in Shanghai Honghua Offshore Oil and Gas Equipment Co., Ltd. (“Shanghai Offshore”), a wholly-owned subsidiary of the Group and its indirect creditor’s rights against Jiangsu Offshore at a considerations of RMB15.7 Billion; and through one-in-all contract with the ultimate buyer for Honghua’s entire 30% indirect equity interest in Prime FSP, LLC (“Prime”), its entire 25% indirect equity interest in FSP LNG B.V. (“FSP”) and its entire 70% indirect equity interest in Hong Kong Tank Tek Limited (“Tank Tek”) and Honghua’s indirect creditor’s rights against it ( Debt principal around US $16,065,000). Above all the shares listed on the Public Tender, the base bidding price is RMB1.00, the Group is expected to use the abovementioned creditor?s rights against the main consideration of the offshore business.
The Offshore Segment mainly focuses on the manufacturing of offshore drilling equipment and LNG-related technologies. The Company states offshore drilling business was adversely impacted by the significant uncertainties and price fluctuation of the global oil market in recent years. The Company held positive opinion towards the future development of LNG industry, but transforming Offshore Segment requires strategic partners, capital investment and other related resources. The Company will focus on equipment manufacturing and oil & gas resources development and engineering services in the future to improve the Company’s core competitive advantages, and profitability. Meanwhile, the disposal would help Honghua enhance its capital structure, resource allocation and financial performance, as well as balance the short-term and long-term interest of the Company and its shareholders.