Bourbon Ventures into Ethane Transportation Sector

Prompted by the downturn in the offshore oil and gas industry French offshore vessel contractor Bourbon has decided to acquire the activities of the global ethane transportation major with a market share greater than 50%.

The decision comes at a very difficult moment in the offshore services sector which has pushed Bourbon to diversify its activities and pursue new opportunities for growth which ethane transportation sector abounds in.

“Bourbon is particularly resilient due to its operational performance and cost control but also due to the end of its investment program which is enabling free cash flow generation,” the company pointed out.

The transportation venture comprises 100% of Greenship Gas, a Singaporean owned shipping trust, 100% of Greenship Gas Manager Pte, manager of the Greenship Gas shipping trust and 80% of JHW Engineering &Contracting Ltd, specializing in design and engineering of vessels.

The Greenship Gas is comprised of a fleet of 17 vessels, of which 13 are in service at the moment, dedicated to transportation of ethane gas, ethylene and LNG and having an average of 3.5 years and 100% of Evergas, operator and contractor of gas transportation services.

The said companies are currently owned by their majority shareholder JACCAR Holdings, Bourbon said.

Bourbon added the acquisition was priced at USD 320 million with a net debt of USD 389 as at December 31, 2015.

The company further explained that it would benefit from a seller’s credit of USD 100 million and that it expects to have in place a USD 220 million bridge loan. Once the transaction is completed, Bourbon said it would resale 80% of the ownership of vessels, which will be then retained on a bareboat charter to a minimum of ten years.

“The bridge loan signed at the time of the acquisition would then be reimbursed and the impact on the Bourbon’s debt decreased significantly,” the company’s press statement reads.

The transaction is yet to be approved by the company’s shareholders at the Annual General Meeting scheduled for May 26, 2016.