Keppel Corp. said Tuesday its associated company Floatel International has entered an all-share agreement to merge with Oslo-listed Prosafe in a deal that will result in the Singapore company indirectly holding around 22 percent of the combined companies.
Floatel is an associated company of Keppel Offshore & Marine (KOM). Its substantial shareholders include KOM subsidiary FELS Offshore and OCM Wonder PF/FF Holdings, Keppel said in a filing to SGX before the market open.
Undaer the deal, Prosafe will acquire all of Floatel. In exchange, Prosafe will issue new shares equivalent to 45 percent of the company and new conditional preference shares to Floatel shareholders, Keppel said.
Based on FELS Offshore’s 49.92 percent interest in Floatel, it would end up holding 22 percent of Prosafe once the deal is completed, Keppel said.
Prosafe has a market capitalization of 1.04 billion Norwegian krone, or around S$164.04 million or US$120.08 million, based on Bloomberg data.
The preference shares will entitle holders to receive dividends up to a maximum amount of US$20 million, although that amount can be lowered depending on the outcome of litigation between Westcon Yards and Prosafe Rigs, Keppel said. That suit is related to the conversion of tender support vessel “Safe Scandinavia,” the filing said.
Once the dividend is paid, or adjusted to zero, the shares will be redeemed, it said.
The deal is conditional, with clearances needed from Norway and U.K. competition authorities, and approvals from Floatel and Prosafe shareholders and creditors, Keppel said.
If all the conditions are met, the deal is expected to be completed by the third quarter, Keppel said.
Keppel FELS is a wholly owned subsidiary of KOM, which is part of Keppel Corp.
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