Asset Buyout Partners AS and Norsea Group are pleased to announce the sale of five oil and gas Properties from Norsea Group Property to Asset Buyout Partners. ABP is a new company established to make industrial investments in key Norwegian oil and gas assets, including properties in the country’s Strategic oil and gas hubs. With an equity line of USD 285 million from HitecVision, Norway’s leading private equity house, the company has an ambition to build a specialized company aiming for an IPO within 3-5 years.
Asset Buyout Partners addresses the situation created by the low oil price, where companies in the oil and gas industry are looking to slim their balance sheets by selling off operating assets. Asset Buyout Partners will make industrial investments in off-market and privately negotiated transactions for long-term cash flows with solid oil and gas counterparties.
The company’s first transaction is the acquisition of a portfolio of five oil and gas properties from Norsea Group Property, a subsidiary of NorSea Group, a leading oil and gas logistics provider. The value of the transaction is NOK 875 million including debt. The five properties are situated in strategic oil and gas hubs: Hammerfest (two), Coast Center Base outside Bergen (two) and Vestbase outside Kristiansund. The properties were all built during 2013/2014 and cover about 31,000 square meters of office space, warehouse and workshops. The main tenants are Aker Solutions, one of the largest Norwegian oil service companies, listed on the Oslo Stock Exchange; Italian national oil company ENI; and its Norwegian counterpart Statoil, all considered blue chip customers representing limited counterparty and credit risk. The weighted average lease term is ca. 14 years, providing good visibility for ABP.
According to Leif Emil Brekke, CEO of Norsea Group Property, the company’s main objective with the transaction is to adjust its total property portfolio as a step in strengthen its cash and assets balance. Norsea Group Property has various ownership shares in the five property companies that have been sold and will release funds of approx. NOK 140-150 million in the sale. The properties will, after the acquisition from Asset Buyout Partners, still be managed on a daily basis by todays management teams, causing minimum interference on the running business of its tenants.
Commenting on the establishment of Asset Buyout Partners and its first transaction, Egil Stokka of HitecVision said: “Falling oil prices have put the profitability in the oil and gas sector under pressure. This creates transaction opportunities for ABP, e.g. through sale-leasebacks and other negotiated transactions. As an industrial investor, Asset Buyout Partners will have a wider toolbox to structure value creating transactions for sellers, tenants and the company itself.”
Adding to Mr. Stokka, William Wittusen, CEO of Asset Buyout Partners, said: “We will leverage HitecVision’s unparalleled network and track record in the oil and gas industry, combined with deep real estate industry knowledge, to build a sustainable company with a dedicated strategy. The properties we have acquired from Norsea provide a solid foundation to build our company from. We currently see a number of opportunities for ABP, and we expect to make several acquisitions over the coming years.”