Dockwise has announced last week that it expects to reduce its debt by $58 million to just below $963 million by the end of the second quarter of 2009.

The reduction will be driven by the release of the remaining $40.6 million held in the Mighty Servant 3 escrow account, the successful buy-back of $8.5 million of debt, $4 million in proceeds from the sale of Dock Express 12 and the scheduled mandatory repayments of $5 million.

Following its 18-month refurbishment, Mighty Servant 3 will shortly rejoin the fleet of Dockwise Transport BV, a wholly owned subsidiary of Dockwise Ltd. Mighty Servant 3 will bring Dockwise's total fleet to 20 semi-submersible vessels. Delivery of the vessel triggers the release of the remaining $40.6 million currently held in escrow to cover the costs of reinstatement and vendor compensation.

Settlement of the previously announced debt buy-back is scheduled for the end of this month. As a result, the group's debt will reduce by some $8.5 million.

Dockwise agreed the sales of Dock Express 10 and 12 in 2008 as part of its strategy to optimise fleet composition. The group received payment of $4 million in Q2 2009 after the delivery of Dock Express 12 to its new owner. Dock Express 10 was delivered in 2008 and payment received accordingly.

In addition, approximately $5 million of the group's free cash flow has been applied over the quarter for mandatory lender repayments.

Andre Goedee, chief executive of Dockwise Ltd, said: "The return of close to $ 60 million to our lenders is a significant step towards Dockwise's aim of securing the gearing targets we have set for year end 2009.

"Reduction of our debt position is a key priority and I am confident that this step, combined with the continued free cash flow generation, will enable us to achieve the Board's target of reducing the net debt to less than three times EBITDA."