Tycoon’s Aker group investing $61m in new shares and convertible loan as offshore owner targets consolidation in slump. Kjell Inge Rokke’s Aker group is investing $62m in Solstad Offshore to see it through the slump. Aker is pumping in NOK 250m ($30.62m) by buying new shares and will become a significant shareholder. It is also providing a further NOK 250m as a convertible loan.
Other investors will be able to buy more new shares worth NOK 75m, which Solstad family companies Solstad Invest, Soff Holding and Ivan II will take part in to the tune of NOK 35.3m.
The owner has also extended bank loans, with reduced payments, as part of the refinancing. Bonds worth NOK 1bn could also be stretched.
Solstad said the deal will enable it to ”withstand the downturn in the market and to contribute to the consolidation of the fragmented offshore service vessel industry.”
CEO Lars Peder Solstad said: ”The combination of Solstad’s operational experience, high quality fleet and global network together with Aker’s industrial expertise, business development focus and financial strength will provide a powerful platform for further development of the company.”
Loan payments slashed
The stock issue consists of 20m shares priced at NOK 12.50 each, the current price in Oslo on Tuesday. This will give Aker 31% of the company.
The subsequent NOK 75m offering will be at the same price and the Solstad family will emerge with a 32.4% holding. The new loan has a coupon of 1% per year and matures in the second half of 2021.
It can be converted into shares at NOK 12.50 each at any time by Aker. It can also be exchanged for another loan in a new Solstad entity, although Solstad did not specify what this might be.
Aker could not own more than 50% of this new company, and Solstad can repay the loan at any time. Existing bank debt will be consolidated into three new fleet loans with a five-year term, secured by ship mortgages. The owner has won a 75% reduction in payments for the first three years, saving NOK 2.6bn.
There is an option to cut instalments in half, to NOK 550m, during the fourth year. Bonds will be extended from 2019 to 2021, subject to a vote. Arctic Securities is acting as financial advisor to the company, with Wikborg, Rein & Co as its lawyers.
Aker has wide oil and shipping interests, including control of shipowner Ocean Yield.
