Troubled Anglo-Norwegian engineering group Kvaerner has announced an agreement with its largest shareholder, Aker Maritime, which should result in a solution to the company's problems. In November Kvaerner looked close to bankruptcy after Aker Maritime threatened to block a financial deal. The company needs $28 million in short term financing to avert a liquidity crisis.
As a result of the solution agreed with Aker Maritime, Kvaerner will be able to secure new equity through a Directed Equity Issue, a subsequent Rights Issue and through a merger of Aker Maritime's core business with Kvaerner Oil and Gas. Kvaerner's second major shareholder, the Russian company Yukos Oil will also support the deal.
The agreement includes: l A merger between Aker Maritime and Kvaerner Oil and Gas. Aker Maritime is valued at NOK 3.6 billion, including NOK 800 million in debt.
l A Directed Equity Issue of at least NOK 2 billion.
l A Rights Issue for Kvaerner shareholders, as of 14 December 2001. The value of the Rights Issue will be up to NOK 1.5 billion, at the same price per share as the Directed Equity Issue.
The new deal aims to secure Kvaerner new equity of around NOK 3.5 billion. Following the merger and injection of new capital, Aker Maritime will hold a stake of about 50 per cent in Kvaerner. The company has also secured a deferral of debt repayments of around NOK 4.5 billion for ten years, with the first five years interest free. Repayment of a further NOK 4 billion is deferred for three years. The deal is still subject to final approval from Kvaerner's shareholders and a meeting was scheduled before the end of the year.
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