ROVworld Subsea Information

GC Rieber Shipping and HitecVision agree to form new subsea service company
Date: Wednesday, December 09, 2009 @ 10:00:00 EST

GC Rieber Shipping and HitecVision agree to form new subsea service companyGC Rieber Shipping and the private equity investor HitecVision have today entered into a 50/50 joint venture agreement in order to create a new subsea services company. The basis for the joint venture is GC Rieber Shipping's investments in the geotechnical company Bluestone Offshore Pte Ltd (Bluestone) and the subsea services company Technocean AS, including its subsidiary Scan Mudring (Technocean).

The joint venture has been established to achieve further growth and strengthen the operational base in the existing companies. Furthermore the joint venture will be looking for strategic growth opportunities within niches in the global subsea services market, in close co-operation with its customers.

"The global demand for a wide variety of subsea services is expected to grow significantly over the coming years, although the JV parties acknowledge that the market in the very near term is seen to be challenging", says Sven Rong, CEO of GC Rieber Shipping. He continues "The transaction allows GC Rieber Shipping to allocate the majority of its capital on core activities relating to ship owning and operations, and at the same time provide our value chain investments in Bluestone and Technocean with significant financial capacity to take on further growth in the subsea services business at a time when opportunities are expected to arise".

"The combination of GC Rieber Shipping's maritime expertise within subsea support and HitecVision's competence in building oil service businesses represents a powerful partnership for creating an international subsea services business of scale. The three cornerstone companies in the JV are all well positioned within their respective niches to deliver high growth and will form a solid platform from which to expand the group," says Pål M. Reed, Senior Partner of HitecVision.

Under the joint venture agreement, GC Rieber Shipping will contribute its shareholding in Bluestone and Technocean to the joint venture, as well as a direct investment of NOK 35 million. HitecVision will contribute with capital initially of NOK 160 million. Both parties have also under the JV agreement committed to certain follow-on investments. The joint venture company will be a majority shareholder in both Bluestone and Technocean and have a significant financial capacity to consider follow-on investments in both companies.

The joint venture company will immediately provide USD 17.5 million of growth capital for Bluestone, which allows Bluestone to restructure its balance sheet. The bondholders of the NOK 70 million outstanding bond loan in Bluestone have accepted a payment in cash of 60 % of par value to redeem the loan in full. Further, the shareholders in Bluestone have also agreed to a significant write-down of their equity value. The existing equity holders will be left with approximately 10 % of Bluestone's total share capital after the restructuring. The restructuring of Bluestone provides a stable financial foundation for further growth.

The joint venture company has also allocated capital to participate in future share issues in Technocean, which may be required to fund working capital and investments to support Technocean's rapid growth.

Bluestone has further and on basis of the restructuring entered into a time charter agreement with a GC Rieber Shipping subsidiary for the vessel Greatship Maya. The agreement is for a firm period of two years, with options for three more years. Greatship Maya is a MT 6012 multipurpose subsea support new building due for delivery late November 2009 on bare boat charter to a subsidiary of GC Rieber Shipping. The vessel has a length of 93.6 m, beam of 19.7m, moon pool of 7m x 7m, 1020m2 deck space and accommodation for 66 persons.

Geotechnical equipment currently installed on the vessel Bluestone Topaz will be de-rigged and installed on the Greatship Maya where after the Greatship Maya will be a truly state-of-the-art geotechnical vessel ready for geotechnical operations year end 2009. The restructuring of Bluestone is dependant upon the successful commissioning and delivery of this vessel to Bluestone.

GC Rieber Shipping communicated in the second quarter 2009 report that significant technical defects had been uncovered on the vessel Bluestone Topaz. These technical defects has resulted in a major write down on the value of the vessel, which will be included in GC Rieber Shipping third quarter 2009 report. In total GC Rieber Shipping anticipates to book a loss of about NOK 30 million in connection with the write off on the Bluestone Topaz and the Bluestone Offshore restructuring.

This article comes from ROVworld Subsea Information

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