Singapore-listed offshore services provider Ezra Holdings (Ezra) has signed a memorandum of understanding (MOU) with engineering company Chiyoda to establish a joint venture (JV) in the subsea service market.
It will be called EMAS Chiyoda Subsea, formed by Ezra’s subsea services business, EMAS AMC with Chiyoda. The Japan-headquartered Chiyoda will pay Ezra a cash consideration of USD150 million and subscribe for new shares in EMAS Chiyoda Subsea for a cash consideration of USD30 million for a 50% ownership in EMAS CHIYODA Subsea, subject to any closing adjustments.
Ezra will then convert part of its existing intercompany debt owed by EMAS AMC into equity such that EMAS Chiyoda Subsea will have net tangible assets of USD310 million by the end of 2015.
EMAS Chiyoda Subsea will be able to undertake larger and more complex offshore engineering, procurement, construction and installation (EPCI) projects through a combination of capabilities and resources to reach to wider global client networks.
It will allow it access to a global network of engineering centres, research and development capabilities, and supply chain management capability as well as global vendor networks.
The joint venture aims to lower costs for offshore projects through a concept development phase initially, before EMAS Chiyoda Subsea uses its technologically advanced fleet and operational expertise to deliver these solutions offshore.
“This JV will allow us to realise our vision of being a trusted partner and leader in the subsea construction business,” said Lionel Lee, group chief executive officer and managing director of Ezra.