Kjell Almskog News

Kvaerner ASA has postponed a planned sale of its Masa-Yards Finnish shipbuilding unit in a new setback to its goal of exiting shipbuilding. Kvaerner said it had failed to find a right buyer for Masa-Yards, which specializes in building cruise ships and has an order reserve of $2.6 billion, and would instead concentrate on raising the unit's profitability. "Talks (about a sale of Masa) have not led to a satisfactory agreement," the company said in a statement. "As a consequence, Kvaerner will now concentrate on carrying out the improvement program set in place to obtain satisfactory results." Kvaerner said the decision would not affect its goal of cutting huge debts.

Kvaerner ASA has postponed a planned sale of its Masa-Yards Finnish shipbuilding unit in a new setback to its goal of exiting shipbuilding. Kvaerner said it had failed to find a right buyer for Masa-Yards, which specializes in building cruise ships and has an order reserve of $2.6 billion, and would instead concentrate on raising the unit's profitability. "Talks (about a sale of Masa) have not led to a satisfactory agreement," the company said in a statement. "As a consequence, Kvaerner will now concentrate on carrying out the improvement program set in place to obtain satisfactory results." Kvaerner said the decision would not affect its goal of cutting huge debts.

Aker Maritime has acquired control of about one fourth of Kvaerner for a reported $350 million (3 billion crowns). The purchase made the industrial holding firm, a group of companies operating in more than 20 countries with no previous Kvaerner ownership, the biggest shareholder in Kvaerner. "Aker Maritime ASA has today bought rights issues, shares and options in Kvaerner ASA which together amount to 26.39 percent of the company after the ongoing rights issue," Aker Maritime said in statement to the Oslo bourse. Kvaerner, which core activities include oil and gas, engineering and construction, announced in May a 2.5 billion crowns rights issue to exploit opportunities for growth and development. The subscription period ended on Wednesday.

Kvaerner, reporting a bigger-than-expected first half profit, said it would not raise a rejected takeover bid for oil and gas services group Aker Maritime. Kvaerner swung to a first half pre-tax profit of 155 million Norwegian crowns ($17.4 million) from a loss of 4.81 billion in the same period of last year, when it made giant provisions for a wrenching restructuring. "We find no economic argument to raise the offer (for Aker Maritime), so we won't do it," chief executive Kjell Almskog told a news conference of Kvaerner's all-share bid for Aker, which itself owns 26 percent of Kvaerner. He said the planned takeover was not essential to Kvaerner.

Kvaerner's Chief Executive Kjell Almskog rejected any merger of Kvaerner Oil & Gas with offshore supply firm Aker Maritime. "That has not been and is not an issue on the agenda," Almskog reportedly said after meeting with Trade Minister Grete Knudsen to discuss last week's raid of one-fourth of Kvaerner. Kjell Inge Roekke, through his 63 percent-owned Aker Maritime, had surprised Kvaerner management by buying shares, options and rights issues corresponding to about 26 percent in Kvaerner. Some analysts have interpreted Roekke's move as part of a plan to merge Aker Maritime with Kvaerner Oil & Gas, following several previous failed attempts by Kvaerner to buy Aker Maritime.

Kvaerner posted better-than-expected 2000 profits and outlined plans to split into three companies, hoisting its share up more than five percent. The company said pre-tax profits totaled 513 million crowns ($56.69 million) last year compared with a loss of 5.5 billion crowns in 1999 when the group took heavy provisions for restructuring. Analysts had expected a profit of 441 million crowns. "The report was better than expected, and splitting the company seems reasonable," one trader said. Kvaerner also said it expected earnings to improve further in 2001. "We are now searching for growth opportunities in our chosen areas," chief executive Kjell Almskog said in a statement.

Kvaerner beat market expectations with a jump in first-quarter profits, and the company reiterated opposition to a tie-up with Norwegian oil industry services rival Aker. Kvaerner, trying to recover from a wrenching 1999 restructuring, said pre-tax profits leapt to 151 million crowns ($16.66 million) in the quarter to March 31 from 10 million crowns in the same period of 2000. Net profits leapt to 110 million from 10 million. "We're not jumping for joy about it but with the starting point we've had this has to be a pleasant confirmation that we are on the right track," Chief Executive Kjell Almskog told a news conference. Operating profits…

Kvaerner's chief official Kjell Almskog reportedly said a possible union between Kvaerner's Oil & Gas division and Aker Maritime is an exciting prospect but only theoretical, after the company announced that the two firms have common interests and a complementary spectrum of products. Aker Maritime's majority shareholder, Aker RGI, has said that it is looking for a potential partner or buyer of Aker Maritime.

Kvaerner Masa Yards won a $1.09 billion contract to build two ships for Royal Caribbean Cruises (RCL). The Eagle-type cruise ships are scheduled to be ready for delivery in 2002 and 2003. "The intentional agreement has been signed under the conditions that the yard can finance construction of the ships," Kvaerner said. "Even though Kvaerner has decided to pull out of shipbuilding and concentrate its operations in other fields -- and the process to find a new ownership structure for Kvaerner Masa Yards is ongoing-- we welcome the deal," Kvaerner Chief Executive Kjell Almskog said. Almskog said the deal boosted the yard's current order book to 19.9 billion crowns from 10.8 billion crowns.

Kvaerner ASA announced a record 1999 pre-tax loss, hit by restructuring costs and weak non-core operations, but forecast an upturn at its core businesses in 2000. London-based Kvaerner recorded a pre-tax loss of $667 million from $205.5 million a year earlier after a sweeping restructuring plan was launched in April, which aimed to sell off non-core activities. "We have all seen that the goal is within sight. It is far away but still in sight," Chief Executive Kjell Almskog said. "We will see setbacks also this year, but hopefully smaller and fewer (than in 1999)." Almskog said a planned restructuring into a "New Kvaerner," to include only core business areas, would take another one to two years.