Wednesday, May 31, 2000
The vessel repair business being acquired by Bollinger is an operating unit of Halter Marine, Friede Goldman Halter's Vessel segment, and consists of five facilities devoted to vessel repair and maintenance that are located in Louisiana and Texas. Halter had increased its focus on the vessel repair business with the purchase in 1997 of three of the repair yards.
The deal will make Bollinger the largest vessel repair company in the Gulf of Mexico region with a total of 43 dry docks.
Donald "Boysie" Bollinger, Chairman
and CEO of Bollinger Shipyards, Inc., described the acquisition
as "a continuation of the expansion of our core ship repair
segment which has been our foundation since we started 54 years
The shipyards involved are currently operating as:
Bollinger will change the names of the facilities once the transaction is completed.
The acquisition will give Bollinger repair/conversion
"This divestiture of our vessel repair unit is a result of an exhaustive and strategic review of all Friede Goldman Halter's operating assets and business activities,'' said J. L. Holloway, company chairman and chief executive officer. "`We undertook to evaluate the strategic fit of each of our business lines. We determined that the vessel repair business did not fit our primary and long-term focus on large-scale offshore energy projects, highly complex commercial and government shipbuilding, and engineered products.
"The sale of our vessel repair unit also underscores our commitment to the new construction side of the vessel business,'' Holloway said.
"The completion of this $80 million transaction and an additional $33 million in tax refunds expected to be collected during 2000 are anticipated to provide significant additional liquidity for Friede Goldman Halter as it enters a strengthening marketplace,'' said John Alford, president and chief operating officer.
"The sale of the vessel repair business also reduces the number of facilities that the company is actively operating, which was one of the goals of the merger. Since the merger was completed on November 3, Friede Goldman Halter has either sold or closed eight of its combined 24 domestic shipyards. Management believes that by concentrating production activities in fewer facilities, the company will be able to achieve meaningful incremental operating efficiencies and cost savings. In addition, we are projecting a significant decrease in selling, general and administrative expenses in 2000 and 2001 from 1999 levels,'' Alford concluded.