Aker Yards Sells Major Stake In Shipyards

[Neptune]

Shares in Aker Yards ASA soared 27 percent by Tuesday afternoon when the Norwegian company announced a euro292 million (US$423 million) deal to sell 70 percent of its German and Ukraine merchant vessel yards to the Russian-controlled FLC West investment group.

Aker Yards has three business areas: cruise and ferries, offshore and specialized vessels and merchant vessels. The merchant vessels unit has shipyards in Floroe, Norway, Nikolaev, Ukraine, and in Wismar and Warnemunde, both in Germany.

Under the deal with FLC West, Aker Yards will retain full ownership of the Norwegian shipyard, but will sell a 70 percent stake in its subsidiary Aker Yards Ukraine Holding AS, which in turn will own 100-percent of the yard in Ukraine and the two in Germany. Aker Yards will own 30 percent.

A news release said the joint venture is expected to ''deliver modern vessels to meet the growing demand by Russian companies in hydrocarbons exploration, production and transportation for specialized ships.'' It said increasing foreign trade by Russia and places for oil and natural gas developments in the Russian Arctic is expected to increase demand for more specialized vessels.

The deal is due to be completed in mid-2008, pending regulatory approval, including by competition authorities in Germany and Ukraine.

Three weeks ago, Oslo-based group Aker Yards swung to a fourth-quarter loss of 323 million kroner (US$62 million; euro40.37)), after a profit of 486 million kroner in the same period a year earlier. It said a heated shipbuilding market had slowed supplies from subcontractors, causing costly delays in its own deliveries. It also projected continued operational difficulties.

Shares in Aker Yards surged 27 percent to 64.90 kroner (US$12.58; euro8.11) by mid-afternoon on the Oslo stock exchange following the announcement, although the stock remained nearly 34 percent below its price a year ago.

In Luxembourg-based FLC West is 50 percent owned by the Russian government controlled investment group FLC, with the other half held by the private Cyprus investment company Almiar Investment, which in turn is owned by FLC private shareholders.

Aker Yards has about 20,000 employees and 18 shipyards in Norway, Finland, Germany, France, Romania, Ukraine, Brazil and Vietnam.

Manufacturing.Net