AUGUST 27, 2015 – Singapore's Ezra Holdings has entered a binding MOU that will see Japanese engineering giant Chiyoda Corporation invest in Ezra's Subsea Services business, Emas AMC, to form Emas Chiyoda Subsea – a 50:50 Joint Venture.
Ezra says the transaction implies an aggregate deal value for Emas Chiyoda Subsea of approximately US$1.25 billion.
As part of the deal, Chiyoda will pay Ezra a cash consideration of US$150 million and subscribe for new shares in Emas Chiyoda Subsea for a cash consideration of US$30 million for a 50% ownership in Emas Chiyoda Subsea. Ezra will convert part of its existing intercompany debt owed by Emas AMC into equity such that Emas Chiyoda Subsea will have net tangible assets of US$310 million at the date of completion, which is expected to be at the end of this year.
EMAS says that the partnership with Chiyoda creates an opportunity for Emas AMC to expand its subsea-to-surface offering and provide more value to clients and partners and for Chiyoda to rapidly accelerate its expansion of its Offshore & Upstream business portfolio.
Yokohama headquartered Chiyoda is a leading oil and gas industry Front End Engineering Design (FEED) and Engineering, Procurement and Construction (EPC) company, with almost 70 years of project experiences world-wide.
According to Ezra Holdings, Chiyoda's involvement will begin early in the concept development phase of offshore projects, where the ability to influence cost is the greatest. Emas Chiyoda Subsea will then use its technologically advanced fleet and operational expertise to deliver these solutions offshore.
"This is a very important milestone for us," said Chiyoda President and CEO Shogo Shibuya. "It has been Chiyoda's corporate strategy to strengthen the offshore upstream portfolio as Chiyoda's next core business."With the establishment of Emas Chiyoda Subsea, we are in a position to provide comprehensive services to our clients, from early phase concept study to EPCI, throughout the lifecycle of any offshore oil and gas project. Chiyoda is excited about this new opportunity and glad that we can jointly work with an excellent subsea player, Emas AMC."
Mr Lionel Lee, Group CEO and Managing Director of Ezra, said, "This JV will allow us to realize our vision of being a trusted partner and leader in the subsea construction business. It will enable us to undertake large complex EPCI projects, as well as full field developments, which combine onshore and offshore facilities. Chiyoda will be able to lend tremendous support in many areas of our business operations."