ADES unit inks 2 deals to buy jack-up rigs in Southeast Asia

ADES Holding's jack-up rig

ADES Holding Co.’s subsidiary ADES International Holding Ltd. entered into asset purchase agreements (APAs) to acquire two contracted premium jack-up rigs in Southeast Asia from Vantage Drilling International Ltd. for $190 million (subject to working capital adjustments upon the deal closure).

The acquisition is a strategic move to strengthen ADES’s presence in Southeast Asia, a region poised for strong production growth against a backdrop of tight jack-up market conditions, ADES said in a statement to Tadawul.

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The transactions encompass the direct asset acquisition of the TOPAZ jack-up rig contracted in the Malaysia-Thailand Joint Development Area (JDA), marking ADES entry into its 10th global market.

ADES will also acquire Rig Finance Ltd. (RFL), the owner of the SOEHANAH jack-up rig in Indonesia.

The company expected to post earnings before interest, taxes, depreciation, and amortization (EBITDA) of SAR 150 million ($40 million) annually.

ADES said the deal is likely to be closed within the next three months, once all terms are satisfied.

ADES International Holding signed an APA with Vantage Holdings International, a subsidiary of Vantage Drilling, to acquire RFL for $85 million.

In a separate statement, ADES added that ADES International Holding sealed an APA to buy a jack-up rig from Vantage International, for $105 million.

The target assets delivered revenues of SAR 50,800, SAR 52,800 and SAR 89,600 in 2021, 2022 and 2023, respectively.

The company will pay 10% of both deals upon signing and the remaining 90% upon the deal closure. ADES will fulfill the necessary regulatory approvals in Saudi Arabia and will finance both deals utilizing the available financing commitments.

The transaction will add to the 49 offshore assets currently owned by ADES with the aim to continue to grow globally with current presence in nine countries.