Fred Olsen Buys H&W Real Estate Interests
Wednesday, February 07, 2001
Norway's Fred Olsen Energy is buying the real estate interests of its Belfast, Northern Ireland shipyard Harland and Wolff for $67.2 million to boost the yard. "This is to improve Harland and Wolff's position to succeed in competing and obtaining orders," Senior Vice President Leif Dons said. Fred Olsen Energy owns about 70 percent of Harland and Wolff.
Fred Olsen Energy is buying the so-called Titanic Quarter with about 100 acres (40.47 hectares) of land in Belfast and 35 acres of partly-developed commercial land beside the yard. "We're taking the property development away from Harland and Wolff to let the yard concentrate on securing jobs," Dons said.
After the transaction Fred Olsen Energy said its financial exposure at Harland and Wolff would be cut to 48 million pounds from 89 million pounds.
"In order to further secure its interests, and in an effort to strengthen the balance sheet of Harland and Wolff, a subsidiary of Fred Olsen Energy has purchased the property interests from Harland and Wolff for a gross consideration of 46 million sterling," Fred Olsen said. Dons denied the moves were a way to protect Fred Olsen Energy against exposure to the loss-making Harland and Wolff. Fred Olsen Energy said the shares in Harland and Wolff Properties Ltd. and Titanic Quarter Ltd. have been paid for by a 16 million pounds reduction in inter-company debt and a 25 million assumption of external bank debt, totaling a net purchase price of 41 million pounds.
In addition, Harland and Wolff Properties Ltd. has long-term debt of about some five million pounds.
Dons reiterated that a British Ministry of Defense plan for Harland and Wolff to build two roll-on roll-off ferries was vital to the yard.
"If there is a rapid decision to start the RoRo then the yard should manage to break even in the near term," he said. "The Ministry of Defense timing is of the essence for the viability of the yard," he said.