Note 14 - Related Party Transactions

The Company’s largest shareholder, Siem Europe S.a r.l, with a holding of 83 %, and its parent company, Siem Industries Inc., are defined as a related parties. The Company is obligated to Siem Industries Inc., for a fee of USD 300,000 for 2015 (2014 USD 250,000). This fee is the remuneration for the services of the two of the Board members.
This fee also covers office in the Cayman Islands and administrative costs.

Details related to transactions, loans and remuneration to the executive Management and the board of directors are set out in Note 19. For the Parent, all subsidiaries listed in Note 6 are also defined as related parties.

For other related parties, the following transactions were carried out:

Sales of services

CONSOLIDATED

(Amounts in USD 1,000)

2015

2014

     

Service to entity where director has ownership

21,493

8,556

Total

21,493

8,556

Above service is provided to companies in which a Board member has an interest. Kristian Siem is the Chairman of Siem Industries Inc.,
which is controlled by a trust whose potential beneficiaries include members of Kristian Siem’s immediate family. Siem Industries holds an interest in Subsea 7.
Siem Offshore LLC, 100% owned by the Company, has charted vessel to Subsea 7 during 2015.

Purchase of service

CONSOLIDATED

(Amounts in USD 1,000)

2015

2014

Service from related parties

66,484

11,351

Total

66,484

11,351

Service delivered from related parties consist of instalments according to shipbuilding contracts with Flensburger Schiffbau Gesellschaft and cost for technical management, corporate management and delivered crew from O.H. Meling & Co AS. Siem Offshore Rederi AS has two vessels under construction at Flensburger Schiffbau Gesellschaft, a company 100% owned by Siem Europe S.a r.l. Management service and crew service are supported to Siem Meling Offshore DA, 51% owned by the Company, by O.H. Meling & Co AS , owning 49 % of Siem Meling Offshore DA.

Sale of Vessel

CONSOLIDATED

(Amounts in USD 1,000)

2015

2014

Sale of vessel

-

47,447

Total

-

47,447

In Q3 2014, the vessel “Siem Sailor” was sold to a company controlled by O.H. Meling & Co AS at a price of NOK 295 million. The purchaser of the vessel is the 49% owner of Siem Meling Offshore DA, and is controlled by O.H Meling & Co AS.

Balance Sheet items following purchase and sale of service:

CONSOLIDATED

(Amounts in USD 1,000)

2015

2014

Accounts receivables

2,081

2,102

Accounts payable

250

250

     

Loans to related parties:

CONSOLIDATED

(Amounts in USD 1,000)

2015

2014

Loan to associates

   

At January 1

233

308

Drawings

18,278

-

Instalments

-51

-22

Interest charged

511

8

Interest received

-4

-8

Exchange rate variations

-1,897

-53

At December 31

17,069

233

The Company holds a long-term loan to Rovde Industripark AS and a long-term loan to Siem Industries Inc. Siem Offshore Invest AS owns 50% of Rovde Industripark AS.

Liability to related parties:

CONSOLIDATED

(Amounts in USD 1,000)

2015

2014

Long-term liability to related parties

   

At January 1

-

7,057

Reclassification from short-term loan

60,158

-

Drawings

-

-

Instalments

-

-6,982

Interest expenses

2,081

53

Interest paid

-1,956

-53

Exchange rate variations

-

-75

At December 31

60,284

-

Liability to related parties:

CONSOLIDATED

(Amounts in USD 1,000)

2015

2014

Short-term liability to related parties

   

At January 1

60,158

-

Reclassification to long-term loan

-60,158

-

Drawings

6,984

60,000

Instalments

-

-

Interest expenses

106

158

Interest paid

-

-

Exchange rate variations

-

-

At December 31

7,090

60,158

Short-term loan
End of 2014 a short-term loan of USD 60 million was drawn by Siem Offshore Inc. under a credit facility provided by Siem Industries Inc. In 2015 the parties agreed to change the terms of the loan from a short-term loan to a long-term loan. This is reflected in the tables above as reclassification. The loan is on market term of interest.

In 2015 Siem Industries Inc. provided a short-term loan to Research Developement & Financial Consultant Ltd. The borrower is the 49% owner of Siem Offshore Ghana International AS. The loan is on market term of interest.

Following transactions with related parties were carried
out for the parent company:

 

PARENT COMPANY

(Amounts in USD 1,000)

2015

2014

Service from subsidiaries

7,415

10,086

Service from associates

-

-

Total

7,415

10,086

Service from subsidiaries consists of administrative and corporate services provided by Siem Offshore Management AS. All terms used for above transactions are at arms’ length.

Year-end balances arising from sales and purchases:

 

PARENT COMPANY

(Amounts in USD 1,000)

2015

2014

Receivables from related parties

   

Subsidiaries

1,129

18,598

Associates

522

1,975

Total

1,651

20,573

     

Payables from related parties

   

Subsidiaries

4,576

5,737

Associates

-

-

Total

4,576

5,737

     

Loans to related parties:

PARENT COMPANY

(Amounts in USD 1,000)

2015

2014

     

Loan to subsidiaries

   

At January 1

21,748

23,637

Drawings

-

2,500

Converted to shares

-

-4,412

Instalments

-

-

Interest charged

502

555

Interest received

-

-

Exchange rate variations

-380

-532

At December 31

21,870

21,748

     

Loan to tiered subsidiaries

   

At January 1

4,498

18,104

Drawings

143

4,619

Converted to shares

-

-

Instalments

-4,761

-18,176

Interest charged

61

299

Interest received

-61

-

Exchange rate variations

121

-347

At December 31

-

4,498

     

Total loans to related parties

   

At January 1

26,246

41,740

Drawings

143

7,119

Converted to shares

-

-4,412

Instalments

-4,761

-18,176

Interest charged

563

854

Interest received

-61

-

Exchange rate variations

-259

-879

At December 31

21,870

26,246

The loan to subsidiaries is held against Siem Offshore do Brasil SA on 31 December 2015.
Loan provided to associates, Siem Offshore Contractors GmbH, a company owned 100% by the subsidiary Siem Offshore Invest AS,
was repaid during 2015. All loans are on market terms of interest.