SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2018

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 22—SUBSEQUENT EVENTS

On July 27, 2018, we entered into agreements (the “Amazon Modification Agreements”) providing for certain modifications to the Amazon vessel and related financing and amended bareboat charter arrangements. The Amazon, a pipelay and construction vessel, was purchased by McDermott in February 2017, sold to an unrelated third party (the “Amazon Owner”) and leased back under a long-term bareboat charter that gives us the right to use the vessel. The total cost of the modifications, including project management and other fees and expenses, is expected to be in the range of approximately $260 million to $290 million. The Amazon Owner is expected to fund the cost of the modifications primarily through an export credit-backed senior loan provided by a group of lenders, supplemented by expected direct capital expenditure by McDermott of approximately $57.5 million over the course of the modifications, of which approximately $18.8 million had been incurred as at June 30, 2018. We will pay for the modification project through an increased bareboat charter rate over an extended 12-year term once the modifications are complete. For additional information about the modifications and the amended bareboat charter terms, see Part II – Other Information – Item 5.