Subsea engineering and construction services company Subsea 7 has made an agreement to buy the remaining 50 percent in a joint venture entity, which owns the large construction vessel Normand Oceanic.
Subsea 7 said on Wednesday it decided to acquire the remaining 50% shareholdings in its equity accounted joint ventures, Normand Oceanic AS and Normand Oceanic Chartering AS, from Solstad Farstad for a nominal cash consideration.
Effective from the date of the transaction, Subsea 7 will become the sole owner of Normand Oceanic, a flex-lay and heavy construction vessel that is being managed by Solstad Farstad while under long- term charter to a third party.
The subsea company will assume all obligations related to an outstanding loan of approximately $100 million and Normand Oceanic AS and Normand Oceanic Chartering AS will become wholly-owned subsidiaries of Subsea 7.
Jean Cahuzac, CEO, said: “Our agreement to acquire Normand Oceanic reflects our strategy to own high-specification vessels that differentiate our market leading engineering and construction services to the offshore energy industry. We are focused on actively managing our fleet composition to meet our clients’ requirements and market conditions.”
The 2011-built vessel is employed under a long term contract for operations in Mexico, and Solstad Farstad will remain ship manager for the vessel at least until end of this contract.
Solstad Farstad CEO, Lars Peder Solstad, said in a comment: “We have found a solution to the benefit of both JV partners. Subsea 7 has been a long term partner and client, and we look forward to continue this important relationship.”
For Solstad Farstad, the transaction releases the parent company guarantee given for 50% of the debt financing in JV. Given the difficult market conditions, Solstad Farstad’s shareholding in JV was not expected to generate any dividends for the foreseeable future. The sale of shares has no cash effect for Solstad Farstad, but will give a book loss of approx. NOK 144 million.
Earlier this week, Subsea 7 and Malaysia’s Sapura Energy decided to discontinue its joint venture SapuraAcergy. The JV’s heavy-lift and pipelay vessel, Sapura 3000, was sold to a subsidiary of Sapura Energy.
Offshore Energy Today Staff