| Item 1.01 | Entry Into a Material Definitive Agreement |
On November 1, 2019, SEACOR Capital (UK) Limited (the “Seller”), a wholly-owned subsidiary of SEACOR Marine Holdings Inc. (the “Company”), entered into a Sale and Purchase Agreement (the “SPA”) to sell its North Sea standby safety business through the sale of 100% of the equity of its subsidiary, Boston Putford Offshore Safety Limited (“BPOS” and together with its subsidiaries, the “BPOS Group”), to North Star Holdco Limited (the “Buyer”), upon the terms and subject to the conditions set forth in the SPA (the “Sale”). As consideration for the Sale, at the closing of the transaction, the Buyer will pay the Seller an aggregate purchase price equal to approximately £19.5 million (equivalent to approximately US$25.1 million based on the USD to GBP closing exchange rate on October 31, 2019), subject to adjustment for continued intercompany services provided and interest calculated from July 31, 2019. Additional consideration of up to £4 million (equivalent to approximately US$5.2 million based on the same exchange rate) may be payable to the Seller based on revenue targets being achieved in 2020 and 2021.
Prior to the closing,four vessels used in the business of the BPOS Group but owned by other subsidiaries of the Company (the “Vessel Transferors”) will be transferred to the BPOS Group such that the BPOS Group will own a total of 18 vessels (the “BPOS Vessels”) at closing. In addition, the SPA provides that, at closing, SEACOR Marine (Guernsey) Limited, another subsidiary of the Company (the “Crew Employer”), will transfer (pursuant to local employment regulations) the crew employees who are assigned to the BPOS Vessels to an affiliate of the Buyer.
In accordance with the SPA, the Buyer has obtained a warranty and indemnity insurance policy pursuant to which the insurer irrevocably waives any subrogation rights against the Seller, the Vessel Transferors and the Crew Employer except in the case of fraud.
The parties to the SPA, the Vessel Transferors and the Crew Employer have each made customary representations, warranties and covenants. In particular the Seller, the Vessel Transferors, the Crew Employer and the Company (the “Seller Parties”) provided certain fundamental warranties (relating to title capacity and solvency), general business warranties and tax warranties, which are given subject to matters fairly disclosed to the Buyer and other limitations. Subject to certain limitations, the Seller is to indemnify the Buyer for losses resulting from (i) any BPOS Group member’s participation as an employer in any occupational pension scheme providing benefits which are not money purchase benefits and any action by the Pensions Regulator in respect of their participation in specified pension schemes, (ii) certain charter arrangements between Seacosco Yangtze LLC and BPOS, (iii) the restructuring of debt arrangements and (iv) certain tax liabilities.
The Seller Parties’ liability (taken together) will be limited to (i) £1 with respect to claims for breach of the general/tax warranties and claims under the tax deed; and (ii) the aggregate consideration received by the Seller with respect to all fundamental warranty claims, claims under the specific indemnities summarised above and all other claims, provided all fundamental warranty claims shall not exceed the aggregate considerationless£6 million.
The closing is subject to certain conditions, including (i) the vessel transfers by the Vessel Transferors referred to above; (ii) the discharge of a certain guarantee given by BPOS in favour MNOPF Trustees Limited as trustee for the Merchant Navy Officers Pension Fund; and (iii) the documentation of amendments to the charter between Seacosco Yangtze LLC and BPOS referred to above. The Buyer or the Seller may terminate the SPA if the Closing has not occurred by January 31, 2020. For certain periods following closing, the Seller and the Buyer will each provide the other with certain transition services, including IT, payroll and purchasing training and support. Under the SPA, the Company has agreed to guarantee the obligations of the Seller, the Vessel Transferors and the Crew Employer in connection with the Sale.
A copy of the SPA will be filed as an exhibit to the Company’s Quarterly Report on Form10-Q for its quarter ended September 30, 2019.
On November 1, 2019, the Company issued a press release announcing the Sale. The press release is attached as Exhibit 99.1 hereto and is incorporated in this Item 8.01 by reference.
| Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits
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