Vard takes full control of Brazil shipyard

Vard Promar

AUGUST 5, 2016 — Fincantieri subsidiary Vard Holdings Limited has increased its ownership stake in its indirect subsidiary in Brazil, Vard Promar, to 95.15%.

Vard Promar was previously held 50.5% byVard’s wholly-owned subsidiary, Vard Group AS, and 49.5% by a local partner, PJMR Empreendimentos Ltda.

Vard says the transaction underscores its ambitions and commitment to remain a key player in Brazilian shipbuilding, supporting the local oil and gas industry, but notes that “gaining full control of the yard increases Vard’s strategic options to adapt its presence in Brazil to expected future market demand.”

The shipyard, built between 2011 and 2013, has so far delivered one Liquefied Petroleum Gas (LGP) carrier for Transpetro, and is in the final stages of construction of a second one. The yard has two more LPG carriers on the order book, in addition to two advanced Pipelay Support Vessels (PLSV) for a joint venture between DOF and Technip.

Following the recent closure of the Vard Niterói shipyard, Vard will concentrate all its Brazilian shipbuilding activities on the Promar yard, located in the Suape industrial area, in the state of Pernambuco.

During the ramp-up phase, Vard Promar had incurred financing needs, largely funded by Vard through shareholder loans. The increase in Vard’s shareholdings results from a capital increase in Promar that, not being underwritten by minorities, is entirely taken up by Vard Group AS through the conversion of shareholder loans into newly issued equity, with no cash consideration. .As part of an overall agreement resolving the relations between Vard and its long term partner in Brazil, PJMR, and providing for an amicable termination of the partnership, the parties have agreed put and call options for PJMR’s remaining 4.85% shareholding in Vard Promar.