Bourbon Offshore’s plan to diversify into the ethane gas market has been put on the back burner after the company failed to obtain financing for the deal.
Bourbon announced its plans in March for a major expansion into ethane gas transportation with the acquisition of the ethane activities of JACCAR Holdings, a private equity firm and also majority shareholder of Bourbon itself, as Bourbon weathers the slowdown in the oil and gas market.
But on Tuesday, Bourbon backtracked on those plans after its board realized that the required financing for the acquisition would not be obtained within the agreed upon time frame.
Bourbon now says that while it’s expansion into the gas transport market remains a strategic objective for the company, its will instead focus its efforts on positioning itself within its core market in order to take full advantage once the offshore market rebounds, whenever that may be.
“The diversification of BOURBON in this new activity remains a strategic objective for the company. BOURBON, illustrating a strong resilience in the low point of the cycle of the offshore market, is reinforcing its position in its main market and will be the first to take advantage of the recovery of activity when it will happen. It will then be able to ensure a new step in its development,” Bourbon said in a statement.
Bourbon said in March that the purchase price of the JACCAR’s assets would have amounted to an investment of $320 million, plus another $389 million of debt.