Subsea 7 Snaps Up EMAS Chiyoda Subsea Business Units and Backlog of $850M
- Business & Finance
Subsea 7 has acquired certain businesses of EMAS Chiyoda Subsea (ECS).
The acquisition, under a US bankruptcy code Chapter 11 Plan of Reorganisation, was confirmed by the U.S. Bankruptcy Court for the Southern District of Texas and became effective on June 29, 2017.
The acquired business of ECS includes approximately 850 people based in Houston, Singapore and Saudi Arabia.
Subsea 7 will pay less than USD 100 million in aggregate, including Subsea 7’s contribution to the Debtor in Possession credit facility, to acquire certain ECS businesses, the Ingleside spoolbase and sundry other assets.
Jean Cahuzac, Subsea 7 CEO, said: “In a challenging business environment our differentiated offering and strong capital discipline has enabled us to pursue this opportunity. This targeted investment enables Subsea 7 to accelerate its strategy to provide a market leading service in the Middle East.
“The addition of people, local presence and client relationships of ECS to our market leading SURF and Conventional capability expands our global presence. As a result of this transaction we have significantly increased our presence in the Middle East, assuming a long-term agreement (LTA) and three current projects in Saudi Arabia, in consortium with L&T Hydrocarbon Engineering (L&T).
“Subsea 7 and Chiyoda Corporation, one of the Plan of Reorganisation sponsors and a previous shareholder of ECS, have started discussions regarding possible collaboration in engineering and technology initiatives to provide solutions to our clients.”
Subsea 7 said it has secured a multi-year bareboat charter for the pipelay vessel Lewek Champion for activities in the Middle East, and a short-term charter for the pipelay vessel Lewek Constellation to complete work in hand in other geographies.
As a result of the transaction, Subsea 7 has acquired approximately USD 850 million of order backlog, including five projects, each with backlog exceeding USD 50 million. Order backlog is said to comprise approximately USD 300 million due for execution in 2017, USD 450 million in 2018 and USD 100 million in 2019 and beyond.