이 기사는 2022년 02월 22일 07:38 thebell 에 표출된 기사입니다.

Samsung Heavy Industries is in talks with private equity firms to dispose of four of its five undelivered drillships for around 1 trillion won ($839 million), according to sources, as rising oil prices create a supportive backdrop.

The move comes after the South Korean shipbuilder announced in early December that it had agreed to sell one drillship to a European drilling company for $245 million.

Samsung Heavy has five drillships in stock. They were constructed after orders were placed with the company in the late 2000s and early 2010s when high oil prices led to a global drilling frenzy.

However, with oil prices plummeting to record lows in the mid-2010s, many offshore drilling companies went bankrupt or collapsed, leaving Samsung Heavy Industries with the five unwanted rigs.

A successful sale of its five drillships would help Samsung Heavy accelerate the improvement of its financial position.

The shipbuilder had an accumulated deficit of 504 billion won at the end of March 2021, compared to 30 billion won in retained earnings at the end of 2020. Its debt ratio sharply increased to 322% at the end of June 2021.

To prevent its shareholders’ equity from turning negative, Samsung Heavy reduced capital without refund in June 2021. It also raised 1.3 trillion won through a rights offering in November, which helped reduce the debt ratio to 196%.

Samsung Heavy still faces financial challenges. It received new shipbuilding orders worth $7.1 billion in 2019 and $5.5 billion in 2020, which are expected to be recognized as revenue this year. They were placed at lower prices and the orders themselves declined in 2020 due in part to the initial effect of the Covid-19 pandemic.

A reduction in revenue and profits would lead to deterioration of the company’s cash position due to cash outflow to cover fixed operating costs. The proceeds from a potential sale of the five drillships could provide the company with greater financial flexibility to absorb the lower operating performance.

It is estimated that Samsung Heavy has spent 10 billion won to 20 billion won annually for maintenance of each rig.

Additionally, more than a third of Samsung Heavy’s cumulative operating losses of 5.56 trillion won in the past seven years occurred due to a decline in the book value of its drillship inventory, increasing the volatility of the company’s profits. The five rigs had a combined book value of $1.28 billion at the end of 2020, sharply down from the original contract value of $2.99 billion.

Samsung Heavy could find buyers for its remaining drillships more easily than in the past on the back of rising oil prices, which earlier this month crossed above $90 a barrel for the first time since 2014.

OPEC predicted in its recent report that a tight oil market and the rising tensions between Russia and Ukraine could drive up oil prices to $125 per barrel later this year.

The rally in oil prices has led to increasing oil and gas exploration activity. According to rigs data from InfieldRigs, the global offshore drillship utilization rate was 82% as of February 18, compared to less than 70% last year. Especially, the figure in North America reached 95%.

“We are open to all options including chartering or sale, and will continue to search for companies interested in our drillships,” an official at Samsung Heavy said. (Reporting by Yong-kyu Kang)