The HOS Arrowhead in 2010 (Photo courtesy of Military Sealift Command)
Hornbeck Offshore Services has closed the sale of three 250EDF class OSVs to the U.S. Navy, the company announced today.
The three vessels were sold for cash consideration of $114 million, the company reported. This is expected to result in a gain on sale of assets of approximately $33.0 million ($20.8 million after-tax or $0.57 per diluted share).
The HOS Arrowhead, the HOS Eagleview and the HOS Westwind have been supporting the Navy’s submarine fleet on the east and west coasts since they were constructed in 2008 and 2009. In order for the Navy to continue receiving the capabilities of these vessels, Congress required their purchase from the Brooklyn-based offshore transport services provider.
The proceeds from this transaction will be used for general corporate purposes that may include retirement of debt, funding for the acquisition, construction or retrofit of vessels or discretionary share repurchases, the company said in a statement. The vessel purchase agreement includes an option for the acquisition of a fourth vessel currently under charter to the U.S. Navy, the HOS Black Powder, that, if exercised as anticipated, would bring the aggregate sale amount to $152 million, which is expected to result in an aggregate gain on sale of assets for the four vessels of approximately $44.0 million.
In addition to these vessel sales, the company separately entered into an operations and maintenance (“O&M”) contract for the three vessels sold, which contains an initial term and annual renewal options spanning a 10-year operating period including annual dayrate escalations. Associated with the O&M contract, the company was also awarded a time charter for the HOS Black Powder that will remain in effect until the closing of the anticipated sale of the vessel pursuant to the U.S. Navy purchase option is completed.
Hornbeck expects to complete the sale of HOS Black Powder by the end of the third quarter of 2015, subject to government funding, and all guidance estimates included below reflect an assumed sale date of September 30, 2015.
Not too shabby for HOS to sell the vessels at newbuild price when their value as OSVs is likely much less these days with the low oil prices. Now, who is going to operate these for the Navy? Gonna have to be a contractor…
The announcement is not a surprise. For some reason, Congress says the Navy has to own the boats and not rent them. It was publicly disclosed a month ago.
[QUOTE=Wrecker3;156068]I am late to the party but will still say it.
If you read the article instead of just cut and paste the answer to your question is embedded within.[/QUOTE]
alright already…I didn’t read all of the article and missed the part about HOS operating the vessels still but why it was not put out to bid is my big question. That I know for a fact did not happen.
How do you know? Let me guess you feel that they lack anyone with local Washington knowledge. Besides those vessels would prolly be to advanced for you to operate. I could picture you showing up and telling the navy they’ve been doing it wrong all this time. You would wear out your welcome pretty fast. How does it feel knowing there have been bayou boys in your back yard escorting subs with no problems for years?
I know because I read the Federal Business Opportunities website weekly and there was no contract advertised. If there was, then please provide me a solicitation number and I will look it up. If you are correct, then I will come back here much humbled and chagrined and admit it.
[QUOTE=c.captain;156070]alright already…I didn’t read all of the article and missed the part about HOS operating the vessels still but why it was not put out to bid is my big question. That I know for a fact did not happen.[/QUOTE]
Only 1 responsible source. How long would it take to train new crews to operate those boats with the hi tech gear they have on them? Then get them vetted by the Navy when there are already crews that meet the requirements.
Sorry but I don’t think you are qualified to drive those boats.
[QUOTE=Wrecker3;156079]Only 1 responsible source. How long would it take to train new crews to operate those boats with the hi tech gear they have on them? Then get them vetted by the Navy when there are already crews that meet the requirements.
Sorry but I don’t think you are qualified to drive those boats.[/QUOTE]
No SIR! This one stinks of backroom deal all over it…
Like ECO couldn’t do it? They have Navy qualified people and Navy contracts.
what I don’t like is that HOS makes the same now as they did when they owned the vessels. Total for all four vessels $100k/day either way…pretty FUCKING sweet for them if you ask this taxpayer. You’d think selling the boats to the Navee that they would get less on an O&M contract like $10k/day per vessel so $40k for all four. There is no way that this contract is worth more than that and if it had been open competitive bidding it would have been. It is the taxpayer which is getting FUCKED here! The difference over the ten years of the contract is $200M.
