The legal structure of the Kvaerner group has in the past been complex, and it has been an objective to simplify and align the group’s legal and operational structures. In 2004 the Kvaerner group completed an extensive restructuring. The timeline below illustrates the key dates in the restructuring process.
The restructuring of Kvaerner
The restructuring of Kvaerner commenced with the organisational and legal integration of the oil and gas operations of Aker Maritime ASA in March 2002, and has since then continued on a global level.
A three-way restructuring of the Kvaerner group was announced on 1 March 2004, resulting in two focused industrial groups, Aker Kvaerner and Aker Yards, each being leading players within their fields, and one industrial holding company, Kværner ASA. The main objective of the restructuring process was to create separate entities comprising (i) the Kvaerner group’s core oil & gas and engineering & construction businesses and (ii) the shipbuilding activities of Kværner ASA and Aker Yards. Following the restructuring, Aker Kvaerner became the owner of the oil & gas and engineering & construction businesses through a 100 per cent ownership of Aker Kværner O&G Group AS and Aker Kværner E&C Group AS.
The restructuring plan was presented to and approved by the General Meeting of Kvaerner on 19 March 2004.
Aker Kværner ASA was established on 1 April 2004 and successfully listed on the Oslo Stock Exchange on 2 April 2004. At the time of listing, Kvaerner was the principal shareholder in Aker Kvaerner. Following a later process comprising Kvaerner and Aker, the publicly listed company Aker ASA became the principal shareholder of Aker Kvaerner. As of January 2005, Aker ASA controls 50.01 per cent of the shares in Aker Kvaerner.
Refinancing
As part of the restructuring, the senior financial indebtedness of Kvaerner was refinanced in March 2004. The refinancing consisted of (i) a second priority lien notes issue of EUR 260 million (the ‘Notes Issue’) and a EUR 150 million bank facility split into: (ii) a senior bank term loan of EUR 33 million (the ‘Term Loan’) and (iii) a senior bank revolving credit facility of EUR 117 million (the ‘Revolving Credit’), all three with Aker Kværner AS as issuer/borrower. In addition, the Aker Kvaerner group’s main bonding facilities were renegotiated with new agreements being on the same basis as the senior secured credit facility in (ii) and (iii) above.
As part of the refinancing, the bond- and note holders under Kværner ASA’s subordinated loan (2001/2011) agreed to a change of borrower from Kværner ASA to Aker Kværner ASA, with minor amendments to the agreements.
At year-end 2004, a EUR 50 million bank revolver was established at Aker Kværner E&C Group AS.
Aker Kværner AS’s obligations under the new financing and bonding facilities are secured by a guarantee from Aker Kværner O&G Group AS and pledge of shares in certain subsidiaries of Aker Kværner AS. In addition, the Term Loan, Revolving Credit and the bonding facilities are supported by a guarantee from Aker Kværner ASA, secured by pledge of shares in Aker Kværner O&G Group AS and Aker Kværner E&C Group AS.
The chart below illustrates the legal structure and the financial debt and guarantee obligations of the group following the debt restructuring.
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