Private equity giant Kohlberg Kravis Roberts (KKR) has agreed a Nkr7.2Bn (US$829.5M) takeover to acquire Norwegian shipowner Ocean Yield and has pledged to expand the company
Octopus Bidco, a unit of KKR, has reached an agreement with Ocean Yield to buy out shares at Nkr41 per share, which is 26% more than the Nkr32.54 that Ocean Yield was trading at on Friday.
Norwegian holding company Aker ASA is the majority shareholder in Ocean Yield, holding 61.65% of shares through its subsidiary Aker Capital.
In a statement, Ocean Yield said the offer is “the result of a strategic process related to the company” with members of the company’s board of directors unanimously approving.
KKR partner Vincent Policard said, “We have been impressed by what Ocean Yield’s management team and employees have achieved since the Company was formed a decade ago through the strategy of investments in modern fuel-efficient vessels on long-term charters.”
“KKR is excited at the idea of becoming a strategic partner to Ocean Yield’s management team to continue building a leading ship-leasing company to the benefit of all stakeholders, including by providing improved access to long-term capital to meet the substantial investment needs of the sector.”
Ocean Yield has grown from an initial fleet of three ships to 63 vessels including bulkers, box ships, tankers and offshore vessels with charterparties including Scorpio Tankers, Nordic American Tankers and Solstad Offshore.
The acquisition by KKR will see Ocean Yield go private with the private equity giant acquiring over US$2Bn in assets.
Ocean Yield chief executive Lars Solbakken added, “We are pleased that KKR, a leading global investment firm with a strong track-record in successful partnerships, is becoming a strategic partner to us to further strengthen Ocean Yield as a leading maritime leasing company. By leveraging KKR’s capital, expertise and network, Ocean Yield will be well positioned to develop the business with the intention to build a substantially larger company.”
The offer will begin by 4 October and be open for 21 days. If KKR reaches 90% acceptance, it will launch a compulsory offer for the rest of the stock and could delist the company.
The KKR transaction also includes the sale of Ocean Yield’s 50% stake in joint venture OY Holding LR2 with Aker Capital while Aker Capital is also selling its holding to KKR for US$5.1M.
OY Holding LR2 owns four LR2 product tankers on long-term charter to Navig8 Group.
Finally, Ocean Yield could also dispose of its 42-year-old floating production storage and offloading (FPSO) vessel Dhirubhai-1.
Dhirubhai-1, valued at US$51.5M at the end of 2020, is currently in lay up in Sri Lanka. Ocean Yield has been trying to sell or find further employment for the vessel since it came off charter to Reliance in India in 2018.
Aker Energy has been granted an option to acquire the FPSO for US$35M with a view of using it for the development and commercialisation of the Deepwater Tano Cape Three Points block offshore Ghana.
Aker Energy has already paid Ocean Yield US$17.9M as compensation for ’certain prior options’ and other services related to the FPSO. In all, Aker Energy will invest US$52.9M in the vessel.
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