Bourbon Restructuring Move Lines Up 41 Ships for Sale
French vessel owner and offshore services provider Bourbon is accelerating its transformation and announced its action plan, called #BOURBONINMOTION, which should enable it to meet the need for competitiveness and to respond to customers’ new demands.
The board of directors approved the plan and its implementation on February 12, 2018.
“As the market cycle has bottomed out, Bourbon must focus more than ever on operational excellence, fleet utilization rates, cost reduction program and free cash flow preservation. However, we need to go even further, because market overcapacity is driving prices down sustainably and we believe that tomorrow will look very different from yesterday. The crisis has highlighted the need to change our model and this is what the #BOURBONINMOTION plan is all about,” declared Gaël Bodénès, chief executive officer of Bourbon.
The #BOURBONINMOTION action plan is based on two priorities:
Reorganizing the activities of Bourbon Corporation into three distinct affiliates: Bourbon Marine & Logistics, Bourbon Subsea Services and Bourbon Mobility. These three entities will be able to implement their own strategies and will be supported by a dedicated governance structure.
Capitalizing on the digital revolution to better differentiate by connecting the fleet. With the main objective of improving operational excellence at optimum cost, the “Smart shipping” program will connect the fleet of 132 modern Supply vessels of Bourbon Marine & Logistics. This program will represent an investment of €75 million over three years and enable a sustainable reduction in vessel operating costs.
Within Bourbon Marine & Logistics’ traditional fleet of 65 vessels, the 41 oldest vessels, which cannot be connected, will be sold at current market price. This planned disposal of 41 owned vessels is expected to generate an impairment loss of about €170 million in the 2017 financial statements.
The 2017 financial statements are currently being finalized and have not been audited yet. In addition to the impairment loss to be recognized on the disposal of the vessels and with adjusted EBITDAR expected to be around €250 million (compared to an adjusted EBITDAR of 383 million euros in 2016), the consolidated net loss for 2017 is expected at around €600 million,
excluding the potential effect of the impairment tests, (compared to a net loss of 279.6 million euros in 2016).
Jacques de Chateauvieux, executive chairman of Bourbon, added: “We are ready to meet the challenges of the transformation profoundly impacting the oil & gas industry and already driving major changes at our key customers. The #BOURBONINMOTION action plan unveils the new face of Bourbon, which is, as in the past, not afraid to reinvent itself and innovate with the commitment of the women and men who contribute to its development around the world. Indeed, beyond the technological revolution lies a personal revolution for all Bourbon team members.”