North Energy will through a series of transactions become the new major shareholder of the Norwegian subsea service provider, Reach Subsea, controlling a stake of 30%.
North Energy informed on Thursday that its subsidiary, North Energy Capital, has reached an agreement with certain shareholders of Accello Partners I, the current 30% shareholder of Reach, to acquire their shares and shareholder loans.
The purchase consideration will be settled with 10.8m Reach shares valued at NOK 1.75. Simultaneously, NEC/Accello has subscribed for 14.3 million shares at NOK 1.75 per share in Reach’s contemplated private placement.
North Energy also said that a condition for the completion of the Accello acquisition was the successful completion of Reach’s contemplated private placement. The management team of North Advisors, who are also shareholders of Accello, will not sell its shares and shareholder loans to NEC.
Post completion of the Accello acquisition and Reach private placement, selling shareholders of Accello will be direct shareholders of Reach, while Accello will own approximately 30% of Reach.
North’s CEO Knut Sæberg, says: “This investment is in line with the new strategy adopted at last year’s EGM, which was to focus on strategic opportunities where substantial influence and control can be exercised in other energy related businesses.
“Reach is a company we know well, with a strong management team and a flexible and scalable business model.”
Reach on Friday received binding orders for subscription of and have allotted 48,609,900 shares at the price of NOK 1.75, corresponding to gross proceeds of NOK 85 million.
Net proceeds from the private placement will be used for acquisition of ROV spreads and general corporate purposes. Issuance of the new shares and completion of the private placement remain subject to the approval by an extraordinary general meeting. The EGM is expected to be held on or about February 7, 2017.
The company’s shareholders North Energy Capital and Accello Partners I, JT Invest, Invicta Invest, Bård Thuen Høgheim and Joso Invest, together currently representing approx. 55.11% of the company’s share capital, has in connection with the private placement undertaken to vote in favor of the necessary corporate resolutions at the EGM.
Subject to EGM approval, the payment date for the new shares will be on or about February 8, 2017, with delivery of the new shares expected to occur on or about February 13, 2017.