Houston-based Gulf Island Fabrication has completed the sale of its South Yard in Ingleside, Texas, to a subsidiary of Buckeye Partners for $55 million.
The sale was completed on Friday, April 20, 2018. The company said on Monday it continues to actively market its North Yard in Aransas Pass, Texas, which is also held for sale along with related cranes and other equipment.
The company will retain net cash proceeds of $52.7 million from the sale after transaction costs. Although the company will recognize a gain from the sale, it does not anticipate any material tax liability given recent net operating losses.
The company stated that it plans to utilize the proceeds to rebuild its liquidity to support pending projects, continue investing in its newly launched EPC Division, and for other general corporate purposes. Following the transaction, the company expects to have total liquidity of $84 million including cash and amounts available on its revolving credit line.
Kirk J. Meche, President and C.E.O. of Gulf Island, commented, “In early 2017, we announced our plan to rationalize underutilized assets including the two fabrication yards and related equipment in our South Texas facilities. Completing the sale of the South Yard is an important milestone in that process and will facilitate the company’s continued strategic re-positioning from the offshore oil and gas market to more diversified markets and customers.
“We look forward to following Buckeye’s plans to re-purpose the property in their midstream business and hope to participate in any fabrication or commissioning projects once they proceed with their new construction plans.”