InfraStrata plc has announced that it has signed heads of terms to purchase the principal assets of Harland and Wolff Heavy Industries Ltd., and Harland and Wolff Group Plc, from administrator BDO NI for a total consideration of £6 million.
The assets comprise of a multi-purpose fabrication facility, quaysides and docking facilities in the port of Belfast, Northern Ireland, ideally suited for the energy infrastructure industry and the company's projects.
- This strategic acquisition enables InfraStrata to bring in-house a large part of the fabrication requirements for the company's Islandmagee Gas Storage Project and proposed FSRU project.
- By utilising the assets, the company anticipates reducing the capital cost (CAPEX) of each of its projects by 10% – 15% and the construction timelines are expected to be reduced by 3 – 5 months.
- 100% of the 79 employees who did not opt for voluntary redundancy earlier in the year will be retained immediately following completion of the acquisition.
- The InfraStrata Board plans to significantly increase the size of the workforce by several hundred over the next five years as it progresses the development of its infrastructure projects. The number of employees at the Islandmagee Gas Storage Project will also scale to 400 during construction and will employ approximately 60 personnel when in operation.
- A new management team for the facility are anticipated to be employed by the end of 2019, in addition to bringing onboard the experience of those employees who were previously employed – the assets will be run independently to InfraStrata's other projects.
- The highly skilled workforce presents the company with an opportunity to create secondary revenue streams through the provision of services to the energy, maritime and defence sectors should such opportunities arise in future.
- Exclusivity over the assets has been secured, and with a £500 000 cash deposit payment to the administrator, BDO NI, to be made imminently from a new loan facility. The acquisition is subject to, inter alia, final contract and funding by 31 October 2019, or 31 December 2019 if the backstop date (as defined below) comes into force. The £5.5 million balance of the acquisition consideration is payable in two tranches: £3.3 million by 31 October 2019 (the backstop date) and £2.2 million by 30 April 2020, which is proposed to be funded by a debt and equity mix. The company is already in advanced discussions with asset backed lenders and financial institutions to put in place medium to long term debt structures.
- The company intends to start utilising the assets in November 2019 under a licencing arrangement with the administrators should the acquisition not complete by 31 October 2019 and the backstop date applies. The company will use the assets in preparation for key enabling works for the Islandmagee Gas Storage Project scheduled for proposed construction starting in 1Q20.
John Wood, CEO of InfraStrata, comments:
“Harland and Wolff is a landmark asset and its reputation as one of the finest multi-purpose fabrication facilities in Europe is testament to its highly skilled team in Belfast. This acquisition is a function of deep operational synergies between the various business segments of the company with Harland and Wolff underpinning the construction economics of the Islandmagee Gas Storage Project and other future projects. We are delighted to be able to retain 100% of personnel who did not opt to take voluntary redundancy earlier this year. Our Islandmagee Gas Storage Project will benefit greatly from their expertise in the energy sector, both technically and economically, and we look forward to growing the workforce significantly in the coming years. While our core priority will be to deliver our flagship project in Islandmagee, we believe there are opportunities to welcome potential new clients due to the diverse skill set at the facility. This acquisition will clearly provide substantial advantages through vertical integration in addition to demonstrating our commitment to the Northern Irish economy, particularly in the post-Brexit era.”
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/03102019/infrastrata-purchases-harland-and-wolff-assets/