Subsea 7 has agreed to acquire certain businesses of EMAS Chiyoda Subsea (ECS) under a US bankruptcy code Chapter 11 Plan of Reorganisation.
The US Bankruptcy Court for the Southern District of Texas has confirmed the acquisition.
The acquired businesses will allow Subsea 7 to expand its operations in the Middle East, enabling it to assume a long-term agreement (LTA) and three current projects in Saudi Arabia, in consortium with L&T Hydrocarbon Engineering (L&T).
Subsea 7 will make a payment of less than $100m in aggregate, including its contribution to the debtor in possession credit facility, to purchase certain ECS businesses, Ingleside spoolbase and sundry other assets.
The acquired businesses currently employs around 850 people in Houston, Singapore and Saudi Arabia.
Under the deal, Subsea 7 has acquired around $850m backlog order, including five projects each with backlog exceeding $50m.
Subsea 7 has received a multi-year bareboat charter for the pipelay vessel Lewek Champion to carry out operations in the Middle East, while a short term charter for the pipelay vessel Lewek Constellation to complete the current work in other geographies.
According to Subsea 7, the LTA allows the consortium with L&T to be invited to tender for future projects in Saudi Arabia.
Subsea 7 CEO Jean Cahuzac said: “In a challenging business environment our differentiated offering and strong capital discipline has enabled us to pursue this opportunity.
“This targeted investment enables Subsea 7 to accelerate its strategy to provide a market leading service in the Middle East.”