Aker Solutions Reveals Writedowns as More Split Details Given

Aker Solutions ASA (AKSO), the oil-services company controlled by Norwegian billionaire Kjell Inge Roekke, announced writedowns of 1.6 billion kroner ($260 million) as it prepares to split the company by September.

Impairments will be recognized on the Skandi Aker and Aker Wayfarer vessels and on goodwill at the Aker Oilfield Services unit of Akastor, one of the companies that will emerge after the split, Oslo-based Aker Solutions said in a statement today.

The measures “are based on revised business cases after the cancellation in June by Total in Angola of a two-year contract for the Skandi Aker vessel, as well as a generally weaker market that has created uncertainty about the value of the vessel and the goodwill value,” the company said.

The impairments and provision will have no effect on the new Aker Solutions, no adverse impact on future funding through covenants and no consequences for the separation, according to the statement.

Aker Solutions fell 0.7 percent to 94.35 kroner as of 12:35 p.m. in Oslo, having earlier gained as much as 1.2 percent. That extends the stock’s decline to 13 percent so far this year.

The company also provided details on the coming split, saying that based “on external and internal valuations,” 35.2 percent of the share capital will be placed in Akastor and 64.8 percent in the new Aker Solutions. An extraordinary general meeting will be held on Aug. 12 to consider the proposal.

Oil Investments

Aker Solutions, valued at $4.2 billion, is streamlining as oil companies including Norway’s Statoil ASA (STL), its biggest customer, cut planned investments to cope with stagnant crude prices and rising industry costs. The company last year turned away from five-year earnings targets to focus on costs and sold assets for more than 5.4 billion kroner.

The company announced in April that its subsea, umbilicals, engineering and maintenance, and modifications and operations units will be spun off into a company that will keep the Aker Solutions name, while the other, called Akastor, will include drilling, oilfield services and process systems.

Shareholders will get one new Aker Solutions share for each held in the existing company at the time of the separation. They will keep their shares in Akastor, maintaining the existing shareholder structure of each company.

The move, which follows the 2011 spinoff of Kvaerner ASA (KVAER), has met with approval from the largest shareholders, Aker Kvaerner Holding AS and Aker ASA. (AKER)

ABG Sundal Collier ASA, Barclays Plc and Carnegie will act as joint lead managers for the listing process.

To contact the reporter on this story: Stephen Treloar in Oslo at streloar1@bloomberg.net

To contact the editors responsible for this story: Alastair Reed at areed12@bloomberg.net; Jonas Bergman at jbergman@bloomberg.net Jonas Bergman

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