Pareto World Wide Offshore AS - Pareto Project Finance

Portfolio NewsPWWO is invested in a broad range of offshore projects, which implies a significant diversificationacross different asset types and market segments. This section provides an update on the quarter’smost important news flow related to the underlying investments.BassDrill AlphaThe tender rig is currently employed by Total in Congoon a contract that will run towards the end of 2013.Discussions with the client are underway for anextension through 2015. Given the rising rate levels inthe rig market, such an extension should provide anupside in earnings. In the meantime, the rig is fullyfinanced with a rapid deleveraging that will leave theowners with an attractive position when it comes to anexit or re-financing in the coming years.Carlisle Subsea ISThe project has bought a small subsea constructionvessel from Sanko and stepped into an underlyingbarebaot charterparty with Hallin Marine, a subsidiaryof NYSE-listed Superior Energy Services. The vesselwas bought at very attractive terms and the projectoffers a significant return potential at low risk. Theproject is not included in the following portfoliodiagrams as it is under establishment.Neptune Subsea ISBoth ships are on 5-year bareboat charters with ReefSubsea. The charterer has fixed both ships out toTalisman in the North Sea through Q3 2012 for surveyand accommodation duties.Parbarge ISFollowing an extraordinary debt repayment this year, asubstantial dividend was paid out to shareholders inQ2’12. The two barges are still employed on long termcontracts with underlying contracts to major oilcompanies.Project salesThere have been no project sales during Q2’12.Payments from projectsDuring Q2’12, PWWO received NOK 6m in paymentsfrom projects, including Bukit Timah and Parbarge.Asian Offshore III ISThe project owns six small AHTS, which were leased onbareboat charters to RK Shipholdings with SankoSteamship as the ultimate charterer. Sanko filed forJapanese creditor protection in early July and RK hassubsequently cancelled the charters due to nonpaymentof charter hire. The ships are now tradeddirectly in the spot market by RK. A group of ownerswith similar exposure have pooled together with RK toset up a partnership and pool to operate the vesselsefficiently in the markets. Due to working capitalneeds, AO III will need some additional funding, but itis considered a good solution to maintain the vessels’operation before making an exit at a later stage inhopefully improved markets. As a result of theincreased risk, the value of this project has beenlowered, and it has been reclassified as a spot marketinvestment.New investmentsThe Board and the manager are actively seeking toexploit investment opportunities arising from financiallydistressed owners. PWWO therefore invested NOK 5min Carlisle Subsea IS during Q2’12.