Subsea 7, OHT join forces to form Seaway 7
Subsea 7 has moved to combine its renewables business unit with OHT to create a pure-play renewables company Seaway 7, focused on offshore fixed wind.
The unit will provide standalone, integrated or EPCI offerings. The encompass installation of wind turbines, foundations, offshore substations, submarine cables and heavy transport.
The company will have an active fleet of ten vessels and two further high-specification vessels under construction.
John Evans, Chief Executive Officer, Subsea 7 said: “This transaction represents an important next step in Subsea 7’s Energy Transition journey that will accelerate and enhance value creation for our shareholders. As a listed company with a comprehensive fleet and experienced management team, Seaway 7 ASA is positioned to forge an enhanced growth trajectory as a global leader in offshore wind. Subsea 7 looks forward to working closely with Seaway 7 as it launches this next exciting chapter in its evolution.”
Torgeir E. Ramstad, Chief Executive Officer, OHT said: “This is a very significant event in the growing Renewables industry. Subsea 7 is a highly respected company and we are delighted that it sees OHT as a natural partner in creating a new global leader in renewables. We are committed to translating the leading capabilities that the combined company will offer into benefits for clients within the offshore fixed wind industry.”
Seaway 7 to have experience at the helm
Seaway 7 will retain OHT’s listing on the Euronext Growth market. Subsea 7 will own 72 percent and OHT’s shareholders 28 percent of the new company.
Completion of the combination is subject to approval by the shareholders of OHT at an extraordinary general meeting.
The Board of Directors of OHT has agreed to recommend the transaction to its shareholders. Songa Corp and Lotus Marine. With stakes of 51.1 percent and 25.6 percent respectively, the two have agreed to approve the transaction.
The Board of Seaway 7 ASA will comprise four directors nominated by Subsea 7 and one nominated by OHT’s largest shareholder, Songa Corp. It will be chaired by Rune Magnus Lundetræ.
Seaway 7 ASA will be managed by an experienced executive team led by Stuart Fitzgerald as Chief Executive Officer. Torgeir Ramstad and Steph McNeill will also hold executive roles.
As majority shareholder, Subsea 7 will consolidate Seaway 7 in its financial statements. The entity will benefit from financial, operational, administrative and strategic support from the Subsea 7 Group.
It is anticipated that the transaction will be accretive to Subsea 7’s earnings from 2024 after delivery of the two newbuild vessels.
The Works Council representing the employees of Seaway Heavy Lifting in the Netherlands will be consulted on this transaction in compliance with Dutch law.
Transaction completion is anticipated by the end of the third quarter of 2021. It is subject to approval by OHT’s shareholders, regulatory approvals and other customary completion conditions.
A mix of experience and heavy transport capabilities
Subsea 7’s Renewables business unit brings to the combination a long track record of executing large and complex offshore wind projects.
Since 2009, it has installed over 700 foundations, more than 30 substations and over 800 kilometers of submarine cables using its fleet of two heavy lift vessels, two cable lay vessels and an installation support vessel.
Subsea 7 will retain its business in floating wind, which will not be part of this transaction.
OHT brings to Seaway 7 a fleet of five heavy transportation vessels, increasingly deployed to transport large offshore wind structures.
It also has two high-end installation vessels currently under construction. The first, due for delivery in 2022, is a customized wind turbine foundation installation vessel.
The second, due for delivery in 2023, is a jack-up heavy lift vessel capable of efficiently installing the largest wind turbines as well as wind turbine foundations. The timing and pricing of OHT’s new builds are attractive in the context of significant market expansion from 2025.
Seaway 7 tapping into high-growth market
The offshore wind industry is a high-growth market that is expected to drive sustained, strong demand for the services of contractors. Between 2020 and 2030, the annual installation of wind power, measured in gigawatts, is anticipated to grow at a compound average rate above 20 percent.
While the foundation installation market is currently competitive, the markets for cable lay and turbine installation are more favorable. Installation capacity in all markets is expected to be absorbed by 2025. The market dynamic of all three sectors is expected to improve materially from 2025 onwards.
Seaway 7 ASA will leverage strengthened capabilities and a differentiated asset base to capture an increased share of this high-growth market and reinforce its position as a global leader in the offshore wind industry.
Looking ahead, with the financial and operational support of its parent company, Seaway 7 aims, if market conditions permit, to accelerate the expansion of its specialized fleet.