Oil & Gas

$577m deal: Solstad sells off dozens of North Sea vessels to Tidewater

Tidewater (NYSE: TDW) has announced a deal to buy 37 oil and gas support vessels from Solstad Offshore (OSLO: SOFF) for $577m.

The platform support vessels “principally” work in the North Sea, but also Brazil, Australia and West Africa.

Solstad said the strategic move to exit the platform support vessel (PSV) market reduces Solstad’s debt by approximately NOK 6 billion (£478.1m) and “will considerably strengthen Solstad’s balance sheet, debt service ability and liquidity position”.

Meanwhile, Tidewater CEO Quintin Kneen said the move plays an “important milestone in the strengthening of Tidewater’s leadership position as we continue to capitalise on the rapidly improving OSV (offshore support vessel) market.”

He added: “These vessels make up the highest specification PSV fleet of its size anywhere in the world. All 37 vessels are currently active and are working throughout the world, principally in the North Sea, but also in Brazil, Australia and West Africa.”

The deal is expected to close at the end of the second quarter, paid with new debt and cash on hand.

Tidewater has received a new credit facility of up to $325m, and expects to raise further debt, with financial institutions including existing lender DNB Bank.

Its unclear what impact this will have on Solstad Offshore’s operations, based out of Aberdeen.

Both firms have offices at The Exchange at Aberdeen Harbour.

The move creates “the world’s largest hybrid fleet” with a combined 14 battery hybrid and 2 LNG power capable vessels.

Tidewater’s total fleet will stand at 228 vessels, and remains one of the youngest in the world.

Solstad CEO Lars Peder Solstad said: ““The sale of the PSVs represents a shift in our strategy in a changing market. The PSVs mainly support the oil and gas industry, while the AHTSs (anchor handling tug supply vessel) and CSVs (construction support vessels) can service all offshore energy sectors, including oil and gas and renewables.

“This move is therefore in line with our strategy of being a key enabler in the energy transition. Further, the transaction will give Solstad greater financial leeway and a significantly improved debt and cash position going forward.”

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