Magnora Separates FPSO from Renewables Business

The Penguins FPSO (Credit: Aibel / Øyvind Sætre)
The Penguins FPSO (Credit: Aibel / Øyvind Sætre)

Oslo-listed company Magnora has decided to separate its legacy business, the divested segment related to floating production storage and offloading (FPSO) units for oil and gas industry, from its renewables business, with significant activity in the offshore wind industry.

During 2023, Magnora’s renewable business shifted gears with considerable growth in profits, prompting the company to reconsider the rationale of keeping legacy revenues linked to the FPSO business in the same entity as the renewables business.

On January 18, 2024 the board of Magnora approved a plan to establish a separate entity for Magnora’s legacy business, or more specifically, the contracts linked to the company's divested FPSO business.

To remind, Magnora, formerly known as Sevan Marine, was formed in 2018 following Sembcorp Marine's acquisition of all of Sevan Marine’s intellectual property and proprietary business, and 95% of shares of HiLoad LNG AS for $39 million.

However, Magnora retained the right to use the technology under two existing agreements for two FPSOs, one of which was already in operation at Dana Petroleum’s Western Isles field, and the other soon to enter operations at Shell’s Penguin field, both in the UK North Sea.

The company currently receives payments for licensing out patents and associated technology rights for the two FPSOs.

Resulting from the corporate restructuring, the FPSO licensing business will become a subsidiary, according to Magnora.

Technically, the separation combines a demerger followed by a merger to transfer the company's licensing business to a wholly owned subsidiary of Magnora, which will requires an extraordinary general meeting of company’s shareholders.

Following the restructuring, the company intends to spin off the legacy business to its shareholders as a new listed company on the Oslo Stock Exchange. Irrespective of this, the strategic process continues, Magnora confirmed.

The demerger plan and the merger plan was been submitted for registration with the Norwegian Register of Business Enterprises.

Further information and the proposed resolutions will be included in the notice of the extraordinary general meeting which is to be held in mid-February 2024.

Initially, the transactions will not result in any direct changes for the shareholders of Magnora and no shareholder of Magnora will receive and own any new shares in any company following completion of the demerger and triangular merger.

Since 2018, Magnora has focused on developing its activities in renewable energy sector by investing oil and gas-generated revenues. In 2021, Magnora entered into an agreement with energy services giant TechnipFMC to jointly pursue floating offshore wind project development opportunities under the name Magnora Offshore Wind.

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