Gulf International Services (GIS or the group; QE: GISS), the largest service group in Qatar, with interests in a broad cross-section of industries, ranging from insurance, re-insurance, fund management, onshore and offshore drilling, accommodation barge, helicopter transportation, and catering services announced that Gulf Drilling International is now a wholly-owned subsidiary of GIS after the company completed the acquisition of the 30% stake previously held by Japan Drilling Company Limited.
The expected final cost to GIS is circa $160m, subject to the final audit of the accounts. With this, it will be the ending of the joint venture between the two companies that began 10 years ago, with an effective date of 30 April 2014.
H.E. Dr. Mohammed Bin Saleh Al-Sada, Minister of Energy and Industry, Chairman and Managing Director of Gulf International Services, noted, “The JDC buyout was a well timed investment that is expected to yield significant results for the largest services group based in Qatar. The fundamentals of this investment are particularly strong considering the substantial value received for the consideration paid, and with GDI’s ambitious growth plans starting to take hold, GIS is well positioned to reap the benefits made possible by the successful joint venture with JDC.”
With GIS’ share of GDI’s results increasing from 70% to a 100%, Mr. Ebrahim Al-Mannai, Chief Coordinator, Gulf International Services, said, “GIS will own a larger share of a rapidly growing company. Accordingly, GIS’ future earnings are expected to grow exponentially and the company’s shareholders are expected to gain from the transaction. Consolidated revenue and profit for the GIS group in 2014 is now projected to exceed QR3.5bn and QR900m respectively, while GDI is expected to contribute an incremental QR1.4bn of revenue and QR150m of net profit on account of the acquisition.”
The consideration paid for JDC’s 30% stake was derived pursuant to terms set forth in the joint venture agreement and is based on 30% of GDI’s net book value as of 30 April 2014. The fair market value of this interest is estimated to be significantly above its net book value, with GDI’s fleet being fully utilized under favorable multiyear contracts. The transaction is being financed by an eight-year bilateral loan agreement secured through local banks on competitive terms, and repayable on a semi-annual basis starting from 2015.
Now established as a world class drilling contractor, GDI is a dynamic company that has world-class drilling contractor capabilities while diversifying into complimentary lines of business that include jack-up accommodation and lift-boat operations. As a result, substantial growth has been achieved in a short period of time with the size of GDI’s fleet set to double from nine to eighteen in just three years with the arrival of 3( 2 rigs and 1 liftboat) more units later this year.
For more information please contact:
Mr. Ibrahim Al-Othman
Chief Executive Officer
Gulf Drilling International ‘GDI’
Wednesday, April 30- 2014 @ 10:37 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.