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Farstad Shipping, Deep Sea Supply and Solstad Offshore agree to merge

Farstad Shipping, Deep Sea Supply and Solstad Offshore agree to merge
Farstad Shipping has concluded a fully-funded restructuring plan that will see the company, together with Deep Sea Supply, consolidate under Solstad Offshore to create a much bigger OSV company.

The confirmation of this latest restructuring plan followed an inconclusive earlier move by Siem Oilservice Invest Holding to take control of Farstad.

“With this solution, we provide Farstad, Solstad and Deep Sea Supply with an industrial platform to sustain the current downturn in the OSV market and be well positioned to exploit a market recovery. We are pleased to have reached an agreement with our banks, bondholders and other stakeholders,” said Karl Johan Bakken, ceo of Farstad Shipping.

Industry observers have been saying the Norwegian OSV market is highly fragmented and in need of a consolidation. By agreeing to complete the Farstad restructuring and to work for the proposed combination, senior lenders, bondholders and long-standing family owners supported by industrial investors are making a collective effort to to create a new OSV company operating out of Norway, Farstad Shipping stated.

The company added that the combined entity will create the largest company in the high-end global OSV industry with a fleet of 154 vessels, comprising 66 PSVs, 55 AHTS vessels and 33 construction support vessels.

“For over a year we have advocated strongly for consolidation in the OSV industry. One step was taken through the merger of REM Offshore into Solstad Offshore in 2016. With a successful completion of the combination we would take further steps to build the world’s leading OSV company,” said Lars Peder Solstad, ceo of Solstad Offshore.

It is proposed that Solstad Offshore will be the parent company with Deep Sea Supply and Farstad to be merged as individual subsidiaries. The consolidated group will have support of Aker Capital, wholly-owned by Aker ASA, and Hemen Holding, indirectly controlled by trusts established by shipping magnate John Fredriksen.

“We are excited by this opportunity to work closely with the Fredriksen group and other stakeholders to realize our ambition to establish an efficient global leader in the OSV segment. The proposed combination of Solstad’s, Farstad’s and Deep Sea Supply’s operational experience, high quality fleet and global network together with the Fredriksen group’s and Aker’s industrial expertise, M&A capabilities and financial strength will provide a powerful platform through Solstad Offshore,” said Øyvind Eriksen, president and ceo of Aker.

The combined entity is expected to enable realisation of substantial cost and revenue synergies in the range of NOK400m ($48.5m) to NOK650m annually.