Solstad Offshore, Farstad Shipping and Deep Sea Supply will combine to create a new OSV company following completion of the Farstad restructuring, which has been agreed by Aker, Hemen, Ocean Yeild and Farstad’s senior lenders.
Deep Sea Supply and Farstad Shipping will merge into and be established as individual subsidiaries under Solstad Offshore, with shareholders of Deep Sea Supply and Farstad Shipping receiving shares in Solstad Offshore as consideration.
“With this solution, we provide Farstad, Solstad and Deep Sea Supply with an industrial platform to sustain the current downturn in the OSV market and be well positioned to exploit a market recovery. We are pleased to have reached an agreement with our banks, bondholders and other stakeholders,” says CEO Karl Johan Bakken of Farstad Shipping.
A successful completion of the combination will create the largest company in the high-end global offshore supply vessel industry with a fleet of 154 vessels. When including all vessel classes and lower spec vessels, the company ranks fourth globally. The company will operate a fleet of 33 CSV, 66 PSV and 55 AHTS vessels deployed globally in all deep water hubs.
“For over a year we have advocated strongly for consolidation in the OSV industry. One step was taken through the merger of REM Offshore ASA into Solstad Offshore in 2016. With a successful completion of the combination we would take further steps to build the world’s leading OSV company,” Lars Peder Solstad, CEO of Solstad Offshore comments.
Following a successful completion of the proposed combination, it is proposed that Solstad Offshore will be the parent company in the consolidated group, and will have support of two of the strongest participants in the shipping and offshore sector through Hemen and Aker.
“The proposed Combination is a necessary structural measure in today’s OSV market, which will enable the combined company to achieve significant synergies through more efficient operations and a lower cost base,” Jon Are Gummedal, CEO of Deep Sea Supply comments.
Lars Peder Solstad will be proposed as the chief executive officer of the combined company, which will be headquartered out of Skudeneshavn, Norway. The The companies will until further continue to operate as-is in their current organizational structure.
” We are excited by this opportunity to work closely with the Fredriksen group and other stakeholders to realize our ambition to establish an efficient global leader in the OSV segment. The proposed combination of Solstad’s, Farstad’s and Deep Sea Supply’s operational experience, high quality fleet and global network together with the Fredriksen group’s and Aker’s industrial expertise, M&A capabilities and financial strength will provide a powerful platform through Solstad Offshore,” says Øyvind Eriksen, president and CEO of Aker.
For more information on the merger and Farstad’s restructuring, please check the company’s Oslo Stock Exchange filing.