Annual Reports & Accounts 2011

24 Financial asset at fair value through profit or loss

	2011 USD’000	2010 USD’000
Unlisted equity security	8,172	2,500

The amount at 31 December 2011 represents the fair value of the Group’s investment (held through MIS) in 8.7% of the equity in Middle East Jackup Ltd (“MEJU”), which owned a jackup rig built by MIS. This rig was sold by MEJU in January 2012 following the successful delivery of the rig by the Group in the last quarter of 2011.

During 2011, a fair value gain of USD 8.2m was recorded in “other gains/(losses) – net” (Note 13) in the consolidated income statement based on management’s estimate of the carrying value which represents the amounts expected to be received from MEJU upon winding up its operations.

On 27 November 2009, LEL subscribed for 28,000,000 shares in BassDrill Alpha Limited (“BassDrill”) amounting to USD 5m at the subscription price of USD 0.1786 per share. LEL entered into an option agreement with certain shareholders of BassDrill granting LEL the option to sell the BassDrill shares after 12 months at an option price of USD 0.0893 plus three month LIBOR + 3% per annum. Further, LEL also granted certain shareholders of BassDrill the option to purchase the BassDrill shares held by LEL in the period starting from the date of issuance and ending after 24 months at an option price of USD 0.1786 plus three month LIBOR + 3% per annum.

During 2009, a fair value loss of USD 2.5m was recorded in “other gains/(losses) – net” in the consolidated income statement based on management’s estimate of the carrying value. In January 2011, LEL exercised the put option and realised USD 2.6m in respect of this investment.

Financial assets at fair value through profit or loss are presented within “operating activities” as part of changes in working capital in the consolidated cash flow statement.