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Akastor — M&A Activity 2014
Jul 11, 2014
3525_rns_2014-07-11_8717f130-5c50-45e3-9024-b9643b22f2a9.html
M&A Activity
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Proposed Demerger of Aker Solutions - Publication of Information Memorandum - Impairment of Some Future Akastor Assets
Proposed Demerger of Aker Solutions - Publication of Information Memorandum - Impairment of Some Future Akastor Assets
July 11, 2014 - The board of directors of Aker Solutions ASA ("Aker Solutions")
has in accordance with the strategy disclosed April 30 resolved to propose to
the company's shareholders that Aker Solutions be split into two companies. The
board has also determined to write down the value of some assets in the Aker
Oilfield Services unit of Akastor, one of two companies that will emerge from
the separation.
Aker Solutions Holding ASA ("New Aker Solutions") - a subsidiary of Aker
Solutions ASA established for the purposes of the demerger and which will apply
for listing of its shares on the Oslo Stock Exchange - will through the proposed
demerger assume Aker Solutions' activities in the following areas of operation:
Subsea (SUB), Umbilicals (UMB), Maintenance, Modifications and Operations (MMO)
and Engineering (ENG). New Aker Solutions will operate under the Aker Solutions
name from the first day of listing.
From the first day of listing of New Aker Solutions, the existing Aker Solutions
ASA will change its name to Akastor ASA to form the Akastor Group together with
the other subsidiaries that have not been transferred to New Aker Solutions. The
Akastor Group will, among other things, continue Aker Solutions' activities
mainly related to Drilling Technologies, Process Systems, Surface Products and
Aker Oilfield Services, as well as Business Solutions, some financial assets and
real estate.
On completion of the demerger, consideration shares in New Aker Solutions will
be issued to the shareholders of Aker Solutions. Each share in Aker Solutions
will give the right to one consideration share in New Aker Solutions. The
consideration shares will constitute 100 percent of the outstanding shares in
New Aker Solutions as of completion of the demerger.
The demerger is subject to approval by the shareholders of Aker Solutions at the
Extraordinary General Meeting to be held on August 12, 2014, and depends, among
other things, on the approval of the application to list New Aker Solutions
shares on the Oslo Stock Exchange.
Based on external and internal valuations, the board of Aker Solutions
determined an allocation of Aker Solutions' share capital so that 35.2 percent
of the share capital would be allocated to Aker Solutions (to be renamed
Akastor) and 64.8 percent to New Aker Solutions. This is in accordance with the
allocation of net values between the two companies as a consequence of the
demerger. The allocation is mainly based on internal and external evaluations of
future cash flow and also takes into account the businesses' risks and
prospects. Aker Solutions has as part of the demerger plan adopted an interim
balance sheet that is included in the demerger plan.
The board determined to recognize impairments and a provision, which are
reflected in the above-mentioned valuation, of about NOK 1.6 billion on some
assets and goodwill of the Aker Oilfield Services unit of Akastor. The value of
Aker Oilfield Services' investments in the Skandi Aker and Aker Wayfarer vessels
will be written down and a provision will be made on future leasing commitments
for the Aker Wayfarer vessel. The goodwill value of the business area Oilfield
Services and Marine Assets (OMA), which Aker Oilfield Services belongs to, will
also be written down.
The impairments and provision are based on revised business cases after the
cancelation in June by Total in Angola of a two-year contract for the Skandi
Aker vessel, as well as a generally weaker market that has created uncertainty
about the value of the vessel and the goodwill value of OMA. An impairment
charge of NOK 664 million will be taken on the Skandi Aker and NOK 306 million
on the goodwill value of OMA. An impairment charge and onerous lease provision
totaling NOK 662 million will also be taken on the Aker Wayfarer as some prior
investments in the vessel have little or no value based on recently revised
business cases and the current market outlook.
The after-tax effect of the impairments and provision is expected to be about
NOK 1.3 billion. Most of the Aker Wayfarer impairment and provision will impact
earnings before interest, taxes, depreciation and amortization (EBITDA). The
Skandi Aker and OMA goodwill impairments will impact earnings before interest
and taxes (EBIT). The impairments and provision, as well as other financial
consequences of the demerger, will be incorporated in the second-quarter 2014
results disclosed July 17 by Aker Solutions.
The impairments and provision will have no effect on the new Aker Solutions
since OMA will become part of Akastor. There will be no cash effect, no adverse
impact on future funding through covenants and no consequences for the
separation of Aker Solutions.
Indicative key dates for the demerger and the listing of New Aker Solutions
shares on the Oslo Stock Exchange are as follows:
* Extraordinary General Meeting of Aker Solutions where the demerger proposal
will be considered: August 12, 2014
* Application for listing of New Aker Solutions' shares on the Oslo Stock
Exchange: on or about August 27, 2014
* Last day of trading of the Aker Solutions' share inclusive of the right to
consideration shares in New Aker Solutions: on or about September 26, 2014
* Registration of the demerger with the Norwegian Register of Business
Enterprises: on or about September 26, 2014
* First day of trading in Akastor shares exclusive of the right to
consideration shares in New Aker Solutions: on or about September 29, 2014
* First day of trading in New Aker Solutions shares on the Oslo Stock
Exchange: on or about September 29, 2014
ABG Sundal Collier, Barclays and Carnegie will act as joint lead managers for
the listing process.
Attached is an Information Memorandum setting out further details on the
proposed demerger, the conditions for completion of the demerger and the
businesses of Akastor and New Aker Solutions after completion of the demerger.
Attached is also a demerger plan with attachments. The notice of the
Extraordinary General Meeting of Aker Solutions is issued in a separate stock
exchange announcement.
As part of the process, a listing prospectus for New Aker Solutions will be
prepared and published in accordance with applicable laws and regulations.
ENDS
For further information, please contact:
Media:
Bunny Nooryani, Chief Communications Officer, Aker Solutions. Tel:
+47 67 59 42 71, Mob: +47 480 27 575, E-mail: [email protected]
Investor Relations:
David Phillips, Head of Industry & Investor Relations, Aker Solutions. Tel:
+44 20 8811 9111, Mob: +44 7788 338 887, E-mail:
Lasse Torkildsen, SVP Investor Relations, Aker Solutions. Tel: +47 67 51 30 39,
Mob: +47 911 37 194, E-mail: [email protected]
Career opportunities:
Visit http://www.akersolutions.com/careers
Aker Solutions is a global provider of products, systems and services to the oil
and gas industry. Our engineering, design and technology bring discoveries into
production and maximize recovery from each petroleum field. We employ
approximately 28,000 people in about 30 countries. Go to www.akersolutions.com
for more information on our business, people and values.
This press release may include forward-looking information or statements and is
subject to our disclaimer, see www.akersolutions.com.
This information is subject to the disclosure requirements under section 5-12 of
the Norwegian Securities Trading Act and Section 3.5 of the Continuing
Obligations for Stock Exchange Listed Companies.
[HUG#1822103]