HOUSTON, TX, Jan. 14, 2013 /CNW/ - SSP Offshore Inc. ("SSP Offshore") announces that it has entered into: (i) a definitive subscription agreement to complete a non-brokered private placement with Huludao Jiangzhe Marine & Offshore Equipment Co., Ltd. ("HJZ"), a private company based in China with experience in developing infrastructure projects in the offshore oil & gas industry; and (ii) a series of agreements with HJZ establishing a regional joint venture in Southeast Asia to focus on the commercialization of SSP Offshore's proprietary floating platform technology in that region.
(i) Private Placement- Under the terms of the subscription agreement, HJZ is acquiring 7,125,000 treasury common shares of SSP Offshore at a price of $0.21 US per share for total subscription proceeds of $1,496,250 US. There are no warrants or special rights attached to the common shares being issued to HJZ. After completion of the private placement, HJZ will own 9.99% of the outstanding common shares of SSP.
Proceeds of the private placement will be used for general working capital purposes to fund the ongoing execution of SSP Offshore's business plan internationally. SSP Offshore intends to close the private placement forthwith and file supporting materials with the TSXV as an expedited private placement in accordance with TSXV Policy 4.1.
(ii) SSP Asia Regional Joint Venture- SSP Offshore and HJZ have established a new joint venture entity, SSP_Asia Pte Ltd. ("SSP Asia"), which is incorporated and headquartered in Singapore. The equity of SSP Asia will be owned 51% by HJZ and 49% by SSP Offshore Ltd., a wholly-owned subsidiary of SSP Offshore.
SSP Technologies Inc. ("SSP Technologies"), another wholly-owned subsidiary of SSP that holds all technology rights in the SSP group, has granted an exclusive Asian Master Regional License (the "Asia License") to SSP Asia relating to the SSP floating platform technology in the geographic region which includes the territorial waters of China and other countries of Southeast Asia.
Under the terms of the Asia License, SSP Technologies has received an upfront license payment from HJZ in the amount of $1,000,000 US and will be entitled to a further $1,000,000 license payment at the time that SSP Asia receives a letter of intent for its first SSP unit and an additional $1,000,000 license payment at the time that SSP Asia receives a definitive contract for its first SSP unit. Beyond the cumulative $3,000,000 license payments to be funded by HJZ, SSP Technologies will also receive a royalty payment payable from SSP Asia equal to 1.5% of the "hull value" (as defined in the Asia License) for each project undertaken by SSP Asia using the SSP Offshore technology.
Under the terms of the unanimous shareholders agreement relating to SSP Asia, HJZ is also responsible for contributing the first $3,000,000 US in working capital to SSP Asia to fund commercialization efforts. Of this amount, an initial $1,000,000 amount has been received upfront from HJZ and the remaining $2,000,000 will be funded by HJZ to SSP Asia on an "as needed" basis in the future. Beyond the first $3,000,000 working capital commitment from HJZ, further working capital requirements of SSP Asia will be contributed pro rata by the shareholders.
SSP Offshore Ltd. is acquiring its 49% equity interest in SSP Asia for nominal cash consideration based on the inherent value attributed by the parties to the Asia License issued by SSP Technologies.
Paul Illingworth, CEO of SSP Offshore commented that "we believe that finalization of the SSP Asia joint venture demonstrates another significant step forward for our company. The $6,000,000 US cash committed by HJZ to acquire their 51% interest in the SSP Asia joint venture, along with the additional funds HJZ is investing at the parent company level through the private placement, certainly represents a significant vote of confidence in the commercial potential of the SSP floating platform technology in the Chinese and Southeast Asian markets. We look forward to working together with HJZ to secure contracts for SSP projects in this region."
William Zhu, director of HJZ, stated that "we are very pleased to have been selected by SSP as their partner for the SSP Asia joint venture. We look forward to combining the technical expertise and commercial contacts of our respective teams to maximize our effectiveness in bringing the exciting SSP floating platform designs to this market."
About SSP Offshore Inc.
SSP Offshore is a public company listed under the symbol "SSZ" on the TSX Venture Exchange. SSP Offshore is actively commercializing its proprietary SSP® FPSO platform design in two formats: (i) SSP Base; and (ii) SSP Plus. Visit the company's website at www.sspoffshore.com for more information.
Neither the TSX Venture Exchange nor its Regulatory Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Certain elements of this press release may contain forward-looking statements and include reference to managements' current expectation or belief in anticipated future events. Investors are cautioned that any forward looking statements are subject to known and unknown risks and uncertainties, which may cause actual results to differ materially therefrom.
SOURCE: SSP Offshore Inc.
For further information:
L. Daniel Wilson, President, at (403) 358-1110 (phone); or via email at [email protected].