IHI to take stake in Brazil's EAS

MAN PromefJUNE 17, 2013 — Japan's IHI Corporation is making an equity investment in Brazil's Estaleiro Atlantico Sul S.A (EAS).

IHI, together with JGC Corporation and Japan Marine United will acquire the stake through a subsidiary, Japan EAS Investmentos e Participações Ltda (JEI).

EAS, located in the state of Pernambuco, is one of the largest and most advanced shipyards in Brazil. It has been operating since 2008 and has now delivered two suezmax tankers.

Suezmax delivery at EAS

Currently, EAS has orders for twenty suezmax/aframax class tankers and seven drillships.

Back in the day when Japan was still the world's largest shipbuilder, IHI was a major player in efforts to establish the Brazilian shipbuilding industry. Its Rio shipyard, ISHIBRAS (Ishikawajima do Brasil Estaleiro S.A) was operational from 1959 until 1994. By the late 1970's Brazil had the world's second largest orderbook, and Ishibras was a leading force in VLCC construction. But the decline of the Brazilian shipbuilding industry saw the yard's orderbook evaporate and it was eventually abandoned and deteriorated for more than a decade without activities. In 2010, Petrobras took a lease on the property and it is now back in business as as Estaleiros Inhauma,

Now, says IHI, it "will again rise to the challenge to develop shipbuilding industry of Brazil through transfer of advanced technology and management know-how, together with JMU, its shipbuilding affiliate."

JEI, which will be controlled by IHI, will subscribe to 25 percent of EAS shares for R$ 201million as an initial investment and will seek to increase its share up to the one-third (1/3) of total shares by the end of this year.

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