Norwegian offshore supply vessel companies Solstad Offshore, Farstad Shipping, and Deep Sea Supply are forging ahead with plans to combine operations with the board of directors from each of company signing off on the proposed merger plans.
The combination of the three companies, if completed, will result in the creation of one of the world’s leading OSV companies as the offshore industry suffers through its worst downturn in decades.
Statutory merger plans were approved and signed Friday by boards of Solstad, Farstad, and Deep Sea Supply, and Solstad’s relevant subsidiaries into which Farstad and DESSC will be merged.
“I’m pleased to see that the merger process is on track. Now we will focus on the important work with the integration process. The three administrations are working closely to shape the operations and organization of the new company. At the same time we will continue to operate as normally, with high operational performance, providing services to customers with dedication”, Lars Peder Solstad, CEO of Solstad Offshore ASA, comments.
The new company will be renamed Solstad Farstad, with headquarters Skudeneshavn, Norway. Farstad and Deep Sea Supply will no longer exist as separate entities as a result of merger.
Once complete, Solstad Farstad will operate a global fleet 154 offshore service vessels, comprising 33 CSV, 66 PSV and 55 AHTS vessels active in all key offshore regions around the world. Deep Sea Supply also has three aquaculture vessels through a 50/50 joint venture with Marine Harvest Norway, providing access growing market for vessel based support services within the fish farming industry.
The combination is expected create synergies in the range of NOK 400-650 million annually.
“If completed, the Combination is expected to provide Farstad, Solstad and DESSC with an industrial platform to sustain the current downturn in the OSV market and be well positioned to exploit a market recovery. The board of directors of the three companies consider this to be a necessary structural measure that will enable the combined company to achieve significant synergies through more efficient operations and a lower cost base,” a statement outlining the merger plans said.
Following the combination, shareholders in the new company will be Aker ASA (23.1%), Hemen Holding Limited (16.1%), the trust belonging to John Fredriksen for the benefit of his immediate family, and the Solstad family (7.2%). On a consolidated basis, the Farstad family will hold 1.5% of shares and votes.
Completion of the merger is expected in the first half of 2017.