Subsea 7 has scooped up businesses from EMAS Chiyoda Subsea (ECS), which filed for bankruptcy earlier this year.
The acquisition, under a U.S. bankruptcy code Chapter 11 Plan of Reorganization, was confirmed by the U.S. Bankruptcy Court for the Southern District of Texas and became effective June 29, Subsea 7 said in a news release. ECS is a joint venture between Ezra Holdings Ltd and the Chiyoda Corp.
The London-based company said it will pay less than $100 million, including its contribution to the debtor in possession credit facility. The deal includes acqusition of the Ingleside spoolbase and other assets.
“In a challenging business environment our differentiated offering and strong capital discipline has enabled us to pursue this opportunity,” Subsea 7 CEO said Jean Cahuzac said. The move expands Subsea 7's presence in the Middle East.
The acquisition also includes:
- A multiyear bareboat charter for the Lewek Champion pipelay vessel for work in the Middle East and a short-term charter for the Lewek Constellation pipelay vessel for work in other parts of the world;
- About 850 people based in Houston, Singapore and Saudi Arabia and
- About $850 million of order backlog, including five projects located offshore Saudi Arabia, offshore Ghana and in the U.S. Gulf of Mexico, the release said.
Cahuzac added that the company and Chiyoda, one of the plan of reorganization sponsors and a previous shareholder of ECS, are discussing the possibility of collaborating on engineering and technology initiatives.
The financial results of the acquired entities will be consolidated within Subsea 7’s SURF and conventional business unit effective June 29.