GEOS swoops on five Vroon OSVs in US$94M deal

While investors have been circling Vroon Offshore’s 40-vessel OSV fleet for months, Golden Energy Offshore Services (GEOS) was the first to swoop, inking a deal to acquire five OSVs for US$94M

All five OSVs are on charter in the North Sea, and the Ålesund, Norway-headquartered vessel owner expects the transaction to complete in September 2023, more than doubling the size of its fleet.

Under the memorandum of agreement (MoA) with Vroon Holding, GEOS will acquire four platform supply vessels (PSVs) built in 2015 and 2016 along with a 2016-built multipurpose commissioning support vessel (CSV), VOS Sugar.

The four PSVs, VOS Pace, VOS Paradise, VOS Partner and VOS Passion, are outfitted with accommodation and gangways to serve the offshore wind market, as well as the offshore oil and gas markets. All are Ulstein-designed PX121 X-Bow vessels, with clear deck areas of 850 m2. Two of GEOS’ PSVs, Energy Duchess and Energy Empress, both built in 2019, share the same design layout. The GEOS fleet also includes the ST 216 L design PSV Energy Swan, built in Norway in 2005.

Meanwhile, CSV VOS Sugar comes equipped with a 25-tonne capacity active heave compensation crane, a clear deck area of 485 m2 and has capacity for a walk-to-work gangway and accommodation for 40 people.

The five-boat deal is about US$10M below the average of recent broker valuations from Haglund and Seabrokers that implied a value of US$104.3M, according to the company.

GEOS chief executive Per Ivar Fagervoll said the acquisition would lower the average age of GEO’s fleet to 7.9 years, with the ambition of further expansion to “become a player to be reckoned with in the offshore market going forward.”

The enbloc purchase is being financed through a combination of debt and equity injection from various entities linked to Oaktree Capital Management, a so-called alternative funder for assets and companies in the offshore sector.

Oaktree Maritime & Transportation Fund, LP, the company’s largest lender and holder of warrants for around 50% of the outstanding share capital will exercise its warrants to inject Nkr57.8M (US$5.7M) in new equity to GEOS. Oaktree Capital Management has extended a bridge loan of US$3.3M to GEOS to help pay the deposit for the five Vroon vessels. The loan will be mixed with GEOS’ cash and exercised share warrants to fund the deposit.

In another five-year, US$98.6M financing deal, a sale and leaseback transaction with Oaktree subsidiary Fleetscape Capital will fund the five vessels in the fleet acquisition and refinance an existing Fleetscape facility on GEOS PSVs Energy Duchess and Energy Empress. It is structured as a finance lease with customary purchase options.

Oaktree managing director Guillaume Bayol said, “The fleet acquisition represents a transformative opportunity for GEOS to solidify its position as a preferred owner and operator of high-specification PSVs, and puts the company in pole position to take advantage of a rapidly improving offshore market.”

Since its investment in GEOS in July 2022, Oaktree has tried to reposition the company as a provider of modern tonnage with the potential to serve both the offshore oil and gas and the offshore renewables market.

Oaktree vice president and GEOS board member Fredrik Ulstein said, “The fleet acquisition represents the ideal transaction, and we are excited to formally partner up with GEOS through the exercise of the warrants and to continue building on a strong strategic relationship.”

Read the latest issue of the OGV Energy magazine HERE