Singapore’s Ezra Holdings and Chiyoda Corporation have signed a memorandum of understanding (MOU) that will see the Japanese company buy half of Ezra’s existing subsea services unit to form a new a 50:50 joint venture, in a deal worth around $1.25bn.
Taking over from its predecessor EMAS AMC, the new JV company EMAS Chiyoda Subsea will continue to specialise in engineering, procurement, construction and installation (EPCI) contracts, with its own fleet of construction vessels.
Chiyoda will pay Ezra $150m in cash and inject $30m in additional capital into the JV company.
Ezra says it also plans to capitalise part of the existing inter-company debt owed by EMAS AMC. As of May 31 this year, the company’s unaudited net debt stood at $530m.
The deal is subject to the approval of both companies’ shareholders, but is expected to be completed before the end of this year.
“This is a very important milestone for us. It has been Chiyoda’s corporate strategy to strengthen the offshore upstream portfolio as Chiyoda’s next core business,” Shogo Shibuya, president and CEO of Chiyoda, said in a statement. “With the establishment of EMAS Chiyoda Subsea, we are in a position to provide comprehensive services to our clients, from early phase concept study to EPCI, throughout the lifecycle of any offshore oil and gas project.”
Lionel Lee, group CEO and managing director of Ezra, added: “This JV will allow us to realise our vision of being a trusted partner and leader in the subsea construction business. It will enable us to under take large complex EPCI projects, as well as full field developments, which combine onshore and offshore facilities.”
