13th May 2019 10:06
LONDON (Alliance News) - Braemar Shipping Services PLC is to hold a major stake in Norway's Aqualis ASA following sale of some of its businesses, Braemar said Monday.
Braemar is selling the marine, offshore, and adjusting businesses of its Technical Services division to Aqualis, and in return will get 14.9 million shares, worth 26% of Aqualis.
Braemar is to also get 6.0 million performance-based warrants, which could lead to Braemar holding 33% of the Norwegian firm.
Aqualis is an Oslo-listed provider of consultancy and engineering services to the offshore oil & gas and wind sectors and will be renamed AqualisBraemar following the deal.
Braemar's Chief Executive James Kidwell will join the new AqualisBraemar board.
"The combination follows the board's consideration of strategic options for the Technical division," said Braemar.
"The Technical division has continued to face tough market conditions, and despite the wide-ranging restructuring programme undertaken in 2016, the financial performance of the division has been disappointing in 2018 and in the first quarter of 2019."
Kidwell commented: "We are delighted to be announcing the sale of substantially all of Braemar's Technical division to Aqualis in exchange for an equity stake in the enlarged group."
"Our respective businesses fit well together and the combination will create a market leading position in Offshore, Marine, Adjusting and Renewables services with global coverage which will enable the stronger combined business to unlock significant revenue and cost synergies."
"We strongly believe the enlarged Aqualis group, which will retain the Braemar name and trade as AqualisBraemar, will bring numerous benefits and opportunities to both clients and employees going forward," he added.
Shares were 2.1% lower on Monday morning at a price of 176.25 pence each.
Braemar is set to release results for its year ended February on Tuesday this week, having warned in March the Technical division was struggling.
In Braemar's year ended February 2018, Technical produced revenue of GBP34.6 million, about 26% of the company's overall revenue.
Related Shares:
Braemar Shipping