Bergen Considers Further Yard Sales After Rosenberg DisposalKristin Myers
Bergen Group ASA, a Norwegian shipbuilder and offshore services company, would consider offers for one or both of its two remaining shipyards after last week selling its Rosenberg unit for more than analysts had expected.
While Bergen doesn’t have any plans to sell its BMV yard in Bergen or its Fosen unit near Trondheim, it “could happen” if the right bid is received, Chief Executive Officer Terje Arnesen said in an interview in Oslo today. “The buyer for Rosenberg wanted to buy 100 percent at three times our market value,” making it “difficult for me not to recommend to the board that we should sell,” he said.
Bergen last week agreed to sell its Rosenberg operation in Stavanger to Australia’s WorleyParsons Ltd. for 1.09 billion kroner ($191.3 million). That compares with a 2007 purchase price of 700 million kroner and an expected fee of about 500 million kroner, Dagens Naeringsliv reported on Feb. 5, without saying where it got the information.
That was “a very strong price for the yard, especially considering the expectations,” Pareto Securities ASA said in an e-mail on Feb. 21. Shares in Bergen fell as much as 22 percent, the most since Sept. 12, 2008, and closed 15 percent lower in Oslo, giving the company a market value of 391 million kroner.
Bergen, based in the west coast city of the same name, has been investing in its offshore unit, which contributed almost 50 percent of revenue last year, to take advantage of increased spending on oil and gas exploration and production.
That’s helped offset a weaker performance from its shipbuilding unit, which contributed about a third of revenue last year and which has struggled with delays and cost overruns on some projects.
The company is in talks with an unidentified shipbuilder about selling a stake in its shipbuilding unit and an agreement is now expected in the second quarter, compared with an earlier estimate of the first quarter, Arnesen said. He declined to say who the potential buyer is.
“The reason we’re doing that is to get control of the hull building,” he said. Problems with subcontracting work on hulls to other yards has led to project delays, which in turn have resulted in penalties and higher costs, he said.
Bergen now wants to refocus its operations around its Hanoeytangen facility, one of Europe’s largest dry docks, on Norway’s west coast, Arnesen said. Hanoeytangen, where Bergen offers maintenance and upgrade work for the offshore industry, “will be the core” of the company’s development, he said.
Bergen posted a fourth-quarter net loss of 479.6 million kroner, widening from a loss of 141 million kroner a year earlier, after booking provisions and one-time costs at its shipbuilding and services units, it said earlier. Revenue fell 6.3 percent to 872.8 million kroner, it said.