Aker sells industrial building blocks, expands Aker Solutions’ prospects for further growth (02.04.2009)
Aker sells shares in four product and technology companies to Aker Solutions. These companies are industrial building blocks that expand Aker Solutions’ foundation for profitable growth in the offshore and energy sectors.
Aker Solutions is acquiring Aker’s 46 per cent stake in Aker Oilfield Services, 50 per cent of Aker DOF Deepwater (formerly Aker DOF Supply), 33 per cent in the listed technology company ODIM and 100 per cent of the production company Midsund Bruk.
“With these transactions both Aker and Aker Solutions hit the accelerator. We have negotiated a powerful industrial solution. It is good for Aker because it focuses our resources on fewer key companies. It is good for Aker Solutions and the other companies involved because their technologies and products complement each other. It lays the ground for further profitable growth in Aker Solutions, in the crossover sectors between energy, environmental and maritime operations,” says Øyvind Eriksen, President and CEO of Aker ASA.
Altogether Aker receives NOK 1 391 million for the shares included in the transactions. This generates an accounting profit of NOK 478 million in the second quarter of 2009. Aker is also reimbursed about NOK 207 million in shareholder loans from the companies that are bought by Aker Solutions. These transactions are described in greater detail in the attached overview.
The total transaction sum, including transfer of shareholder loans will remain in the form of a seller’s credit, with an earliest maturity on 1 May 2009. Aker Solutions intends to partly finance the acquisitions and future investments with a new bond issue. Aker has committed to buying NOK 1 billion of this bond, which will be marketed in the capital markets in April.
“In Aker, we have a tradition for finding solutions that create powerful units with a clear direction. This way, we contribute to demonstrate shareholder value that many may not see at first sight. Aker Solutions is today our largest industrial investment. As an active owner, Aker shall be a strategic engine in the development of robust and valuable operative businesses,” says Mr Eriksen.
In a separate deal, Aker and Aker Solutions have agreed that Aker Solutions in the future will be an equal owner with Aker of the carbon capture company Aker Clean Carbon. Aker Solutions increases its ownership stake from 30 per cent to 50 per cent through an equity issue by the technology company at the same conditions as the company’s previous issue.
In addition, Aker Ship Lease AS, a wholly-owned subsidiary of Aker, and AMC International AS, a wholly-owned subsidiary of Aker Solutions AS, have entered a 10-year bare-boat charter agreement for a construction vessel (Aker OSCV 06 L, NB 718) currently being built by STX Europe. Aker Ship Lease has bought related building contracts from Aker Oilfield Services for a price equal to the company’s cost price ahead of the transaction with Aker Solutions.
Aker and Aker Solutions have been particularly cautious in the negotiations about the companies in these transactions. This has been in accordance with best practice guidelines for transactions between two close parties. A third party, DOF Subsea ASA, is also a part in the transactions.
The agreements negotiated have been approved by the governing bodies of Aker and Aker Solutions, including Aker’s audit committee, and DnB NOR Markets has analysed the transactions and provided a fairness opinion on behalf of Aker Solutions.
Arctic Securities was Aker ASA’s financial advisor and Wikborg Rein was the legal advisor in these transactions.
Enclosed please find key figures.
For further information, please contact:
Geir Arne Drangeid, EVP Aker ASA, tel. +47 913 10 458
Here are further details about the transactions, in accordance with the Oslo Stock Exchange’s requirements for expanded stock exchange notices:
Aker Oilfield Services
1 April 2009, Aker Capital AS, has sold its 46 percent holding in Aker Oilfield Services to Aker Solutions AS for NOK 601 million. The carrying amount of Aker’s gain from this sale is NOK 254 million. The transaction also embraces the transfer of a shareholder loan of NOK 131 million from Aker Capital AS to Aker Solutions AS at par value. Two-thirds of the settlement, NOK 488 million, falls due at the closure of the transaction. Aker Capital AS has extended a seller’s credit for the same amount, with an earliest maturity on 1 May, 2009. The remainder falls due on 20 December 2009.
Aker Oilfield Services is a specialist in intervention work on production wells in water depths down to 3 000 metres, and contributes through its unique solutions to boosting oil and gas recovery factors on existing subsea fields. Oil companies can achieve substantial savings in the time and cost of deepwater operations compared with conventional intervention services currently provided from rigs. At a time of lower oil prices, it will be even more important for the oil companies to improve the profitability of existing fields by improving their recovery factor.
In partnership with Aker Solutions, the company can deliver complete solutions and maintenance services which – in addition to well intervention – comprise testing, installation, maintenance and replacement of subsea trees, equipment and systems. In addition to boosting subsea expertise in Aker Oilfield Services, the transaction contributes to strengthening Aker Solutions’ position as an integrated supplier of well intervention services.
Aker Oilfield Services’ fleet consists of two chartered-in ships (716 and 705), wholly owned by DOF Subsea, and one vessel (719) owned by the company itself. Ahead of the transactions with Aker Solutions, the building contract for 718 was acquired by Aker Ship Lease, a wholly-owned subsidiary of Aker, at a cost price of NOK 205 million.
Aker Oilfield Services made an operating loss (negative EBITDA) of NOK 48 million in 2008 (2007: NOK 25 million). The table below provides a more detailed overview of its financial position. In addition to securing the delivery of well intervention vessel 716 for a long-term contract with Petrobras, the company is currently working to obtain new contracts. It had 40 employees at 31 December (2007: 10).
Chief executive: P O Baalerud
Board of directors*: K E Kjelstad (chair), M Brandal, S Lieungh, M Andersen, M S Aase, O Stangeland
* The board’s composition will be changed after closure of the transaction.
Aker DOF Deepwater (previously Aker DOF Supply)
1 April 2009, Aker Capital AS has sold its 50 per cent holding in Aker DOF Deepwater (previously Aker DOF Supply) to Aker Solutions AS for NOK 189 million. The carrying amount of Aker’s gain from the sale will be NOK 159 million. A shareholder loan of NOK 76 million, transferred at par value, also forms part of the transaction. Aker Capital AS has given a seller’s credit for these amounts, with an earliest maturity on 1 May, 2009.
Aker DOF Deepwater is due to take delivery of a series of six anchor handling tug supply (AHTS) vessels in 2010-12. These vessels will be built at the STX yard in Vietnam. The company has previously announced its first contract of two-plus-two years with StatoilHydro off the coast of Brazil. A construction contract for a platform supply vessel has been sold to DOF Rederi AS ahead of the transaction.
Sharing ownership between Aker Solutions and DOF will strengthen the company’s position in the attractive Brazilian market for deepwater installation services. Aker Solutions and DOF also aim to position themselves in the growing deepwater pre-set mooring market.
Aker DOF Deepwater had no operational activities in 2008. The table below provides a more detailed overview of the company’s financial position. The company had no employees at 31 December.
Chief executive: Mons S Aase
Board of directors*: K E Kjelstad (chair), A Stensvold, M S Aase, O Stangeland
* The board’s composition will be changed after closure of the transaction.
ODIM ASA
1 April 2009, Aker ASA and Aker Invest KS have sold selling a total of 33.0 per cent of the shares in ODIM ASA to Aker Solutions AS for NOK 513 million, corresponding to NOK 33 per share. The carrying amount of Aker’s gain from the sale will be NOK 87 million. Aker and Aker Invest II KS have given seller’s credits corresponding to this amount, with the earliest maturity on May 1, 2009. After the transaction, Aker ASA will hold 1.7 per cent of the shares in the company.
ODIM is an international technology company which develops and sells advanced and complete automated handling systems to the oil and gas, defence and nuclear power markets. It is also making a heavy commitment to the highly promising deepwater market.
As a result of Aker Solutions’ strategic shareholding, the two companies will be able to offer integrated solutions in key segments, develop technology in partnership and strengthen ODIM’s position in the service and aftermarket segments.
In 2008, ODIM achieved sales of NOK 2 237 million (2007: NOK 1 417 million) and an EBITDA of NOK 398 million (2007: NOK 240 million). The table below provides a more detailed overview of the company’s financial position. It had 789 employees at 31 December (2007: 577).
Chief executive: J Romestrand
Board of directors: K E Kjelstad (chair), M Brandal, N Sævik, E Olsen, K Krohn Devold, A K Bjørnevik (worker director), Ø Bunes (worker director), H Johnsen (worker director)
Midsund Bruk
1 April 2009, Aker Capital AS, has sold all the shares in Midsund Bruk AS to Aker Solutions AS for NOK 87.9 million. Aker Capital has extended a seller’s credit for the corresponding amount, with the earliest maturity on May 1, 2009. The sales price entails a loss of about NOK 22 million on the carrying amount.
Midsund Bruk is a leading supplier of pressure vessels in the European market. It offers services in design, project management and production of all types of pressure vessels, process vessels and storage tanks in various materials.
As a long-term supplier to Aker Solutions, Midsund is now being integrated in a unique network of core competence in process systems, technology and global presence. Its new ownership will strengthen the company’s development both in existing and new segments.
In 2008, Midsund Bruk had sales of NOK 131 million (2007: NOK 133 million) and an EBITDA of NOK 22 million (2007: NOK 12 million). The table below provides a more detailed overview of the company’s financial position. It had 65 employees at 31 December (2007: 55).
Chief executive: P A Tennfjord
Board of directors: N A Karstad Lysø, H Berg, P F Haugen (worker director), K A Haugen (worker director)
“With these transactions both Aker and Aker Solutions hit the accelerator. We have negotiated a powerful industrial solution. It is good for Aker because it focuses our resources on fewer key companies. It is good for Aker Solutions and the other companies involved because their technologies and products complement each other. It lays the ground for further profitable growth in Aker Solutions, in the crossover sectors between energy, environmental and maritime operations,” says Øyvind Eriksen, President and CEO of Aker ASA.
Altogether Aker receives NOK 1 391 million for the shares included in the transactions. This generates an accounting profit of NOK 478 million in the second quarter of 2009. Aker is also reimbursed about NOK 207 million in shareholder loans from the companies that are bought by Aker Solutions. These transactions are described in greater detail in the attached overview.
The total transaction sum, including transfer of shareholder loans will remain in the form of a seller’s credit, with an earliest maturity on 1 May 2009. Aker Solutions intends to partly finance the acquisitions and future investments with a new bond issue. Aker has committed to buying NOK 1 billion of this bond, which will be marketed in the capital markets in April.
“In Aker, we have a tradition for finding solutions that create powerful units with a clear direction. This way, we contribute to demonstrate shareholder value that many may not see at first sight. Aker Solutions is today our largest industrial investment. As an active owner, Aker shall be a strategic engine in the development of robust and valuable operative businesses,” says Mr Eriksen.
In a separate deal, Aker and Aker Solutions have agreed that Aker Solutions in the future will be an equal owner with Aker of the carbon capture company Aker Clean Carbon. Aker Solutions increases its ownership stake from 30 per cent to 50 per cent through an equity issue by the technology company at the same conditions as the company’s previous issue.
In addition, Aker Ship Lease AS, a wholly-owned subsidiary of Aker, and AMC International AS, a wholly-owned subsidiary of Aker Solutions AS, have entered a 10-year bare-boat charter agreement for a construction vessel (Aker OSCV 06 L, NB 718) currently being built by STX Europe. Aker Ship Lease has bought related building contracts from Aker Oilfield Services for a price equal to the company’s cost price ahead of the transaction with Aker Solutions.
Aker and Aker Solutions have been particularly cautious in the negotiations about the companies in these transactions. This has been in accordance with best practice guidelines for transactions between two close parties. A third party, DOF Subsea ASA, is also a part in the transactions.
The agreements negotiated have been approved by the governing bodies of Aker and Aker Solutions, including Aker’s audit committee, and DnB NOR Markets has analysed the transactions and provided a fairness opinion on behalf of Aker Solutions.
Arctic Securities was Aker ASA’s financial advisor and Wikborg Rein was the legal advisor in these transactions.
Enclosed please find key figures.
For further information, please contact:
Geir Arne Drangeid, EVP Aker ASA, tel. +47 913 10 458
Here are further details about the transactions, in accordance with the Oslo Stock Exchange’s requirements for expanded stock exchange notices:
Aker Oilfield Services
1 April 2009, Aker Capital AS, has sold its 46 percent holding in Aker Oilfield Services to Aker Solutions AS for NOK 601 million. The carrying amount of Aker’s gain from this sale is NOK 254 million. The transaction also embraces the transfer of a shareholder loan of NOK 131 million from Aker Capital AS to Aker Solutions AS at par value. Two-thirds of the settlement, NOK 488 million, falls due at the closure of the transaction. Aker Capital AS has extended a seller’s credit for the same amount, with an earliest maturity on 1 May, 2009. The remainder falls due on 20 December 2009.
Aker Oilfield Services is a specialist in intervention work on production wells in water depths down to 3 000 metres, and contributes through its unique solutions to boosting oil and gas recovery factors on existing subsea fields. Oil companies can achieve substantial savings in the time and cost of deepwater operations compared with conventional intervention services currently provided from rigs. At a time of lower oil prices, it will be even more important for the oil companies to improve the profitability of existing fields by improving their recovery factor.
In partnership with Aker Solutions, the company can deliver complete solutions and maintenance services which – in addition to well intervention – comprise testing, installation, maintenance and replacement of subsea trees, equipment and systems. In addition to boosting subsea expertise in Aker Oilfield Services, the transaction contributes to strengthening Aker Solutions’ position as an integrated supplier of well intervention services.
Aker Oilfield Services’ fleet consists of two chartered-in ships (716 and 705), wholly owned by DOF Subsea, and one vessel (719) owned by the company itself. Ahead of the transactions with Aker Solutions, the building contract for 718 was acquired by Aker Ship Lease, a wholly-owned subsidiary of Aker, at a cost price of NOK 205 million.
Aker Oilfield Services made an operating loss (negative EBITDA) of NOK 48 million in 2008 (2007: NOK 25 million). The table below provides a more detailed overview of its financial position. In addition to securing the delivery of well intervention vessel 716 for a long-term contract with Petrobras, the company is currently working to obtain new contracts. It had 40 employees at 31 December (2007: 10).
Chief executive: P O Baalerud
Board of directors*: K E Kjelstad (chair), M Brandal, S Lieungh, M Andersen, M S Aase, O Stangeland
* The board’s composition will be changed after closure of the transaction.
Aker DOF Deepwater (previously Aker DOF Supply)
1 April 2009, Aker Capital AS has sold its 50 per cent holding in Aker DOF Deepwater (previously Aker DOF Supply) to Aker Solutions AS for NOK 189 million. The carrying amount of Aker’s gain from the sale will be NOK 159 million. A shareholder loan of NOK 76 million, transferred at par value, also forms part of the transaction. Aker Capital AS has given a seller’s credit for these amounts, with an earliest maturity on 1 May, 2009.
Aker DOF Deepwater is due to take delivery of a series of six anchor handling tug supply (AHTS) vessels in 2010-12. These vessels will be built at the STX yard in Vietnam. The company has previously announced its first contract of two-plus-two years with StatoilHydro off the coast of Brazil. A construction contract for a platform supply vessel has been sold to DOF Rederi AS ahead of the transaction.
Sharing ownership between Aker Solutions and DOF will strengthen the company’s position in the attractive Brazilian market for deepwater installation services. Aker Solutions and DOF also aim to position themselves in the growing deepwater pre-set mooring market.
Aker DOF Deepwater had no operational activities in 2008. The table below provides a more detailed overview of the company’s financial position. The company had no employees at 31 December.
Chief executive: Mons S Aase
Board of directors*: K E Kjelstad (chair), A Stensvold, M S Aase, O Stangeland
* The board’s composition will be changed after closure of the transaction.
ODIM ASA
1 April 2009, Aker ASA and Aker Invest KS have sold selling a total of 33.0 per cent of the shares in ODIM ASA to Aker Solutions AS for NOK 513 million, corresponding to NOK 33 per share. The carrying amount of Aker’s gain from the sale will be NOK 87 million. Aker and Aker Invest II KS have given seller’s credits corresponding to this amount, with the earliest maturity on May 1, 2009. After the transaction, Aker ASA will hold 1.7 per cent of the shares in the company.
ODIM is an international technology company which develops and sells advanced and complete automated handling systems to the oil and gas, defence and nuclear power markets. It is also making a heavy commitment to the highly promising deepwater market.
As a result of Aker Solutions’ strategic shareholding, the two companies will be able to offer integrated solutions in key segments, develop technology in partnership and strengthen ODIM’s position in the service and aftermarket segments.
In 2008, ODIM achieved sales of NOK 2 237 million (2007: NOK 1 417 million) and an EBITDA of NOK 398 million (2007: NOK 240 million). The table below provides a more detailed overview of the company’s financial position. It had 789 employees at 31 December (2007: 577).
Chief executive: J Romestrand
Board of directors: K E Kjelstad (chair), M Brandal, N Sævik, E Olsen, K Krohn Devold, A K Bjørnevik (worker director), Ø Bunes (worker director), H Johnsen (worker director)
Midsund Bruk
1 April 2009, Aker Capital AS, has sold all the shares in Midsund Bruk AS to Aker Solutions AS for NOK 87.9 million. Aker Capital has extended a seller’s credit for the corresponding amount, with the earliest maturity on May 1, 2009. The sales price entails a loss of about NOK 22 million on the carrying amount.
Midsund Bruk is a leading supplier of pressure vessels in the European market. It offers services in design, project management and production of all types of pressure vessels, process vessels and storage tanks in various materials.
As a long-term supplier to Aker Solutions, Midsund is now being integrated in a unique network of core competence in process systems, technology and global presence. Its new ownership will strengthen the company’s development both in existing and new segments.
In 2008, Midsund Bruk had sales of NOK 131 million (2007: NOK 133 million) and an EBITDA of NOK 22 million (2007: NOK 12 million). The table below provides a more detailed overview of the company’s financial position. It had 65 employees at 31 December (2007: 55).
Chief executive: P A Tennfjord
Board of directors: N A Karstad Lysø, H Berg, P F Haugen (worker director), K A Haugen (worker director)
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