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    Akastor and Mitsui create joint venture

    News // September 21, 2016

    Oil service investment company Akastor has signed a heads of agreement with Mitsui & Co Ltd, the Japanese trading and investment company, and its Japanese partner Mitsui, to create a joint venture with 50/50 ownership between AKOFS Offshore (AKOFS) and Mitsui.

    The joint venture has acquired the vessel Skandi Santos from DOF Subsea Rederi and the topsides installed on Skandi Santos from AKOFS. The joint venture will enter into a lease agreement with AKOFS corresponding to the remaining contract duration between AKOFS and Petrobras. DOF Subsea will continue to provide the remotely operated vehicle (ROV) and marine services on the vessel as part of a contract for a subsea equipment support vessel contract with Petrobras.

    Akastor chief executive Kristian Røkke said: “We are pleased to announce this partnership with Mitsui and are excited about additional joint business opportunities currently being explored. This transaction will increase Akastor’s financial flexibility, while laying the groundwork for longer-term value creation together with Mitsui.” Geir Sjøberg, chief executive of AKOFS Offshore adds entering into a strategic partnership would be “of great value” to AKOFS. “We now have a strong and dedicated partner that will strengthen our commitment and relationship towards Petrobras even further.”

    On closing of the transaction, AKOFS will realise a cash gain of US$66 million, net of investments in the joint venture. The annual bareboat charter and related costs will increase by US$8.5 million per year over the remaining contract period. The contract with Petrobras for the operations in Brazil will remain in a 100 per cent owned subsidiary of AKOFS and will continue to generate positive results over the contract period, also when considering the increased bareboat charter rate. The transaction will result in an accounting gain of approximately US$19 million for Akastor, corresponding to half of the total sales gain of US$38 million. The accounting gain is expected to be booked at the end of the fourth quarter of 2016. The agreement is subject to Petrobras giving its consent, bank approvals and certain other conditions, which are expected to occur during the fourth quarter.

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