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    Solstad Offshore and Rem Offshore to merge

    News // July 29, 2016

    Solstad Offshore and Rem Offshore have announcd that they are to merge. Rem, the principal shareholders of Rem Offshore, Solstad and its principal shareholders, have entered into an agreement that sets out the terms of the deal.

    In a statement, the companies aid the the merger would be completed as a statutory triangular merger pursuant to and in accordance with Norwegian law, whereby ‘Merger Sub’ will be the surviving company. Solstad will create new class B shares which will have the same economic rights as the ordinary shares in Solstad Offshore (to be renamed class A shares), but with 1/10th vote. It is Solstad’s intention that the new class B shares can be an instrument for further consolidation in the industry.

    As merger consideration, Rem’s shareholders will receive new Solstad Offshore class B shares. The merger will be based on an agreed exchange ratio of 0.0696 SSOFF shares per Rem share. This is based upon the issue prices in Rem and Solstad’s private placements, proposed this June and July, of NKr 0.87 (US$0.10) per share and NKr 12.50 (US$1.46) per share respectively, corresponding to an agreed exchange ratio of 0.0696 Solstad Offshore class B shares per Rem share.

    Åge Remøy, founder of Rem Offshore and his related companies will receive 6,000,000 Solstad Offshore class A shares for the first NKr75 million Rem shares subscribed by them in Rem’s NKr150 million directed share issue, which will be carried out as proposed before the merger.

    It is a condition from Åge Remøy’s side that his current controlling position in Rem is carried over into a significant voting interest in Solstad after the merger. The principal shareholders of Solstad have agreed to this and say they look forward to having Mr Remøy as a key industrial shareholder. His principal holding company will also nominate a member to the board of directors of Solstad upon effectiveness of the merger.

    “The offshore service vessel industry is undergoing a period of great uncertainty,” said Lars Peder Solstad, chief executive of Solstad. “Reduced spending across the upstream value chain has contributed to the current overcapacity, adversely impacting day rates and utilisation. The OSV industry’s fragmented structure is further compounding these negative effects. Solstad and Rem both see the need to create larger entities with financial and operational strength to weather the downturn. The combination of Solstad and Rem is one step in the right direction, but there remains a strong rationale for further consolidation.”

    Rem and Solstad operate a combined total of 62 vessels. After the merger, Solstad will retain its Skudeneshavn head office, from which the combined fleet of construction support vessels will be operated. The combined fleet of platform supply vessels will be operated from the current Rem head office in Fosnavåg.

    Mr Remøy said he was satisfied that the merged company would allocate substantial activity to Rem’s Fosnavåg headquarters, with the potential for a substantial increase in activity. He said doing so would secure “possibilities for the region and stable employment opportunities.”

    Øyvind Eriksen, president and chief executive officer of Aker, which holds interests in both companies, said the deal was “a necessary structural measure in today’s OSV market, which will enable the combined company to achieve significant synergies through more efficient operations and a lower cost base.” He said the combination of the industrial expertise, M&A capabilities and financial strength of the companies would provide a strong platform, through Solstad, for further development of the industry.

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