From left: Al-Kaabi, HE Dr al-Sada and Ichikawa sign the share purchase agreement.
Gulf International Services (GIS) has entered into an agreement to purchase the entire 30% stake held by Japan Drilling Company (JDC) in GDI.
Pursuant to the terms of the share purchase agreement (SPA), GIS will own all of JDC’s shares in GDI starting from May 1, 2014, making GDI a wholly owned subsidiary of GIS, which has interests in insurance, re-insurance, fund management, onshore and offshore drilling, accommodation barge, helicopter transportation and catering services.
The SPA was signed by HE the Minister of Energy and Industry Dr Mohamed bin Saleh al-Sada; GDI chairman and director of Oil and Gas Venture at Qatar Petroleum Saad Sherida al-Kaabi and Yuichiro Ichikawa, president of Tokyo-bourse listed JDC.
“This was an opportune time for GIS to increase its stake in GDI. GDI is now established as a world-class onshore and offshore drilling contractor,” said al-Sada, who is also the chairman and managing director of GIS.
GIS also holds 100% of the shares of Gulf Helicopters Company, Al-Koot Insurance and Reinsurance Company and Amwaj Catering Services.
GDI, which is aiming to enhance its share of the offshore market to 50% by 2015 from the present 40%, has been growing rapidly in recent years after it embarked on the most intensive capital investment plan in its history.
Upon GDI becoming a fully-owned subsidiary of GIS, the parent company will enjoy substantially higher earnings from GDI.
Ichikawa said that one of the primary objectives of the joint venture was to transfer drilling rig technology and the capabilities of operating drilling rigs safely and efficiently from JDC to a Qatari company on a structured and sustainable basis.
“We are proud of GDI’s achievements over the past ten years and the self-sufficiency that it has achieved across all aspects of the business,” he said. Although GIS did not disclose how much it would pay JDC; its chief co-ordinator Ebrahim al-Mannai said this transaction “will be 100% financed through an unsecured bilateral loan from local banks, obtained at competitive terms and conditions.”
GDI and JDC also signed a letter of intent (LOI), which provides for the exchange of further technical co-operation between the two companies and the promotion of mutually beneficial business opportunities. The LOI was signed by GDI’s CEO Ibrahim J al-Othman and Ichikawa.
GIS’ shareholders will benefit from the substantial contributions that GDI will be making going forward to GIS’ financial performance, according to al-Mannai.
GDI has entered into a new stage and exciting phase of its journey, backed by world-class technical capabilities, impeccable safety track record and long-terms contracts for its assets, he added.
GDI provides drilling services on a “day rate” basis which includes the provision of drilling rig, rig crew and associated services to safely carry out the drilling operations required by its clients.