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Subsea 7 snaps up businesses from bankrupt EMAS Chiyoda Subsea

Subsea 7 snaps up businesses from bankrupt EMAS Chiyoda Subsea
Subsea 7 has snapped up a number of businesses from bankrupt EMAS Chiyoda Subsea (ECS) for less than $100m, significantly increasing its presence in the Middle East.

Subsea 7 said it was acquiring certain businesses from ECS following the approval of the US bankruptcy court in Texas handling ECS' Chapter 11 bankruptcy filing.

With the acquisition Subsea 7 will takeover businesses with 850 staff in Singapore, Saudia Arabia and Houston, the Ingleside spoolside and other assets it said. The Kristian Siem owned company will pay less than $100m including its contribution to a debtor in possession facility.

 “In a challenging business environment our differentiated offering and strong capital discipline has enabled us to pursue this opportunity,” said Jean Cahuzac ceo of Subsea 7.

“This targeted investment enables Subsea 7 to accelerate its strategy to provide a market leading service in the Middle East. The addition of people, local presence and client relationships of ECS to our market leading SURF and Conventional capability expands our global presence.”

Through the transaction Subsea 7 acquires an order backlog of around $850m across five contracts in Saudi Arabia, Ghana and the US Gulf of Mexico. The company said it had secured a multi-year bareboat charter for the Lewek Champion in the Middle East and a short term charter for the pipelay vessel Lewek Constellation.

Subsea 7 also assumes a long-term agreement (LTA) on the three projects in Saudi Arabia, in consortium with L&T Hydrocarbon Engineering (L&T), and the consortium will be invited to bid for future projects in the country.

Subsea 7 and Chiyoda Corporation, one of the Plan of Reorganisation sponsors and a previous shareholder of ECS, have started discussions regarding possible collaboration in engineering and technology initiatives to provide solutions to our clients.”

ECS a subsea services firm jointly owned by Ezra, Chiyoda Corporation and Nippon Yusen Kaisha (NYK) filed for Chapter 11 bankruptcy protection on 1 March.

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