Seacor planning to spin off offshore businessCompany News // December 1, 2015
Seacor Holdings in the US has taken steps to spin off of its offshore marine subsidiary, Seacor Marine Holdings (SMH) and has announced that SMH has entered into an agreement to issue US$175 million in convertible notes to investment funds managed and controlled by The Carlyle Group. The notes were due to be issued on 1 December 2015.
The company said the transaction "contemplates the eventual separation of SMH from Seacor Holdings' other business lines, potentially via a spin-off of SMH or via a spin-off of Seacor Holdings' other business lines.
A final decision to effect or implement the separation has not been made and, if the contemplated spin-off of SMH does not occur within two years, the holders of the notes will have a one-time right to require SMH to repurchase the notes at par plus any accrued and unpaid interest and an on-going right to exchange the notes for shares of Seacor Holdings common stock.
Charles Fabrikant, Executive Chairman and CEO of Seacor Holdings, said: "This transaction provides additional capital for our offshore group to seek out opportunities arising from the dislocation in the energy sector to acquire discrete assets and pursue strategic transactions that complement our existing business.
"By adding the Carlyle capital, after paying off intercompany debt and transaction costs, SMH will be able to take advantage of opportunities while preserving a strong balance sheet. The terms of the notes provide Seacor Holdings the flexibility to retain or separate its offshore marine business in order to maintain its disciplined and strategic approach to capital allocation. We are extremely pleased to be associated with Carlyle, one of the premier global alternative asset managers, and view its investment as the beginning of a relationship that will bring value to both parties."
Rodney Cohen, Managing Director and Co-Head of Carlyle's US Equity Opportunity Fund, said: "We are excited to partner with Seacor Holdings and SMH, a top-tier operator in the offshore marine business. We look forward to working with Charles Fabrikant, John Gellert, and the entire Seacor team, who have consistently demonstrated their ability to invest and create value throughout cycles, as they continue to develop opportunities in this industry."