Havila Shipping has entered into an agreement with its controlling shareholder Havila AS and Havila AS' wholly-owned subsidiary Havvåg AS for the purpose of transferring Havila AS' indirect ownership interests in the five platform supply vessels MV Havila Fortune, MV Havila Aurora, MV Havila Borg, MV Havila Commander and MV Havila Crusader (the "PSVs") to the Company (the "Transaction").
The transfer of the ownership interest in the PSVs to the Company will be carried out through a transfer of the shares in subsidiaries of Havila AS and interests in Havila PSV DIS as contribution in kind against the issue of shares in the Company.
Havila AS' ownership interests in the PSVs are primarily held by private limited companies, wholly- or partly-owned subsidiaries of Havila AS, which in turn hold ownership interests in the partnerships owning the PSVs, provided, however, that Havila AS holds some interests directly in Havila PSV DIS (the "SPVs").
Following completion of the Agreement, the Company will, indirectly, be the owner of 40% in MV Havila Crusader and MV Havila Commander, 49% in MV Havila Borg and 50% in MV Havila Aurora and MV Havila Fortune. MV Havila Aurora, MV Havila Borg and MV Havila Fortune are currently managed by the Company (commercial and technical management), while MV Havila Commander and MV Havila Crusader are on 8-year bareboat charters to the Company. All PSVs are currently operational and on contracts of variable lengths, with remaining duration between two months and five years, offering a balanced market exposure.
The acquisition of a controlling stake in the two PSVs currently leased, MV Havila Commander and MV Havila Crusader is expected to improve earnings significantly through a reduction of net leasing costs, which is currently approximately NOK 100 million annually, and improving the overall financial structure of the Company through replacing leasing with traditional financing.
The acquisition of three additional PSVs, MV Havila Aurora, MV Havila Borg and MV Havila Fortune, is also considered favourable as the Company already operates all of these PSVs, with solid operating performance. These PSVs have remaining contract durations of approximately two months, one year and five years (plus options), respectively, providing Havila Shipping with growth at a favourable
The financing of all PSVs will be continued under new ownership.
As part of the transactions, the Company will cancel the Total Return Swap on approximately 1.05 million shares. The reason for this, is that the Company having such financial exposure to its own share price is outside the key business scope of the Company.
The SPVs and the PSVs
The Company's acquisition of ownership interests in the PSVs will be carried out through the transfer of Havila AS' shares and interests in the following companies:
PR Havship I, PR Havship II, PR Havship III and HPSV are jointly referred to as the "Partnerships".
Further, the Company intends to increase its ownership in the PSVs to 100% of MV Havila Fortune, Havila Aurora and Havila Borg and 74% of the ownership interests in Havila PSV DIS (MV Havila Commander and MV Havila Crusader) through an acquisition from the third party owners of Partnerships against cash consideration, provided, however, that Mavi VX shall transfer its shares in the partnerships owning MV Havila Aurora, MV Havila Borg and MV Havila Fortune to Havila Shipping as contribution-in-kind against shares in Havila Shipping. The calculation in these acquisitions shall be calculated on the same basis as the consideration in this Transaction.
[No agreements have been, or will be, entered into in connection with the Agreement for the benefit of the parties' board members or management.]
The consideration and settlement
The consideration in the Transaction comprises the aggregate value of the shares transferred to Havila Shipping, which for each of the SPVs is calculated on the basis of (i) the market value of the PSVs as of December 31, 2010 (based on shipbroker valuations as of March 31, 2011, and for MV Havila Commander and MV Havila Crusader also reflecting the Company's purchase options starting in
Based on the above and an agreed total value for the 5 PSVs in the amount of NOK 1,503 million on a 100% basis, the aggregate value of the shares transferred to Havila Shipping is expected to amount to NOK 149.7 million, which is subject to adjustments for the actual net profit in the period up to July 19, 2011.
The subscription price for each share issued to Havila AS against contribution in kind will be equal to the subscription price in the Company's contemplated private placement announced on June 27, 2011. The indicative price range in the private placement is between NOK 52.50 and NOK 57.50, and the final subscription price will be determined by the Board of Directors after completion of the book-building period, expected to end on July 1, 2011.
The number of shares to be issued to Havila AS as consideration for the contribution-in-kind with an aggregate value of NOK 149.7 million and a subscription price at the mid-point of the price range (i.e. NOK 55), is 2,721,203 shares.
The shares will be issued by the Board of Directors pursuant to its authorization to increase the share capital of the Company granted by the general meeting held on April 28, 2011.
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