Damen Shipyards Group has entered into a share purchase agreement with Daewoo Shipbuilding & Marine Engineering (DSME) to acquire its majority share in Daewoo Mangalia Heavy Industries (DMHI) located in Mangalia, Romania, Damen announced on November 10.
Damen already owns a shipyard in Romania, in Galati on the banks of the river Danube, which is currently the group’s largest shipyard. As such, the latest move represents a strategic complement to Damen’s current shipyard portfolio.
The Mangalia shipyard is located on the Black Sea coast. The yard is spread over an area of 980,000m2, has three drydocks with a total length of 982 metres and 1.6 kilometres of berthing space. The docks, with a width of between 48 and 60 metres, will provide Damen with capacity to cater for the largest ships
The deal was announced this summer, and the Romanian competition authorities have already approved the envisaged transaction. The terms of the deal have not been disclosed, but the price was hinted in the range of $40mn-$70mn.
"If the deal goes according to the plan, Daewoo will secure from the deal KRW50-80bn ($43.5-69.6mn),” an official from the Korean company told profit.ro in the summer.
Daewoo Shipbuilding began talks about the sale of the Mangalia Shipyard last year as part of efforts to restructure its international operations. The South Korean company has faced huge financial problems for years amid a downturn in the global shipbuilding industry.
Daewoo has controlled 51% of the Mangalia shipyard since 1997 when it took over the stake under a privatisation deal, with the remaining 49% remaining in the government’s hands. Since 1997, 127 oil tankers and container ships have been built and 300 other vessels repaired.
In April, the South Korean group received a green light from creditors to implement a rescue programme that involves converting debt of over $3.3bn into shares and providing new funds worth $2.6bn. In addition to the shipyard in Romania, Daewoo wants to sell 14 other subsidiaries, including DSME Construction, DeWind, DSME Oman, DSME Shandong, Shinhan Heavy Industries and Samwoo Heavy Industries.
Damen Shipyards Group operates 33 shipbuilding and repair yards and has 9,000 employees around the globe. To date, Damen has delivered more than 6,000 vessels in more than 100 countries and supplies around 180 ships to customers around the world annually.
Damen Shipyards Group owns one of the most active yards in Galati, Romania, where it builds several types of ships, including military vessels. Multi-role corvettes were due to have been built for the Romanian navy at the Damen yard in Galaţi following a government decision under former prime minister Dacian Ciolos, but this was eventually canceled in March and new negotiations with possible suppliers were announced.