Otto Marine

Otto Marine: has sold Oranda 1, a 75m Work Maintenance Vessel, to an unrelated party for US$38m. After accounting for US$21.1m of net carrying value of Oranda 1, Otto will book an est realized gain of US$16.8m in the upcoming 3QFY12. Oranda 1 is an ABS classed 4200 bhp work maintenance vessel that has completed 4 projects in SE Asia since May ’10. However, contemporaneous with the sale trxn, Otto’s subsidiary, Karp Marine, has bareboat chartered back Oranda 1 for a period of 5 yrs. Oranda 1 is currently executing general topside platform maintenance works in the Gulf of Mexico under a 450 day time charter contract worth US$14.9m (prev announced 19 Mar ’12). This is effectively a sales and leaseback transaction which will help Otto improve its liquidity and working capital structure, as the proceeds from the sale trxn will be utilized towards repayment of bank loans.