TechnipFMC has announced its intent to sell the G1201 vessel as part of its overall strategy to optimize the profile and size of its subsea fleet. Following the recent announcement of the Company’s alliance agreement with a best in class partner for pipeline installation using S-lay technology, this supports the Company’s intent to use collaboration agreements, where possible, to execute its differentiated iEPCI™ business model.
The MOA is subject to certain conditions precedent to complete the transaction. The Company expects to complete the sale in December as these conditions are met, including delivery of the vessel in December 2019.
The MOA also includes a Collaboration Agreement with the buyer that would provide 5 years of exclusivity for a list of named subsea projects in a specific jurisdiction and the right of first refusal for other projects not specifically named in the Collaboration Agreement.
Due to this MOA, the Company also reviewed the carrying value of the G1200 vessel, the sister vessel to the G1201, of similar design, asset class and functionality.
As a result of the proposed sales price of the G1201 and its current book value and the book value of the G1200, its sister vessel, the Company has recorded a non-cash asset impairment charge.
The total non-cash charge was $125 million for both vessels and was recorded in the third quarter of 2019.
As this occurred after the Company’s October 23, 2019 earnings release but before the end of the third quarter 2019 subsequent events period, this charge was included in our third quarter Form 10-Q filed today.
