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OSLO, Sept 10 — Kvaerner ASA surged as much as 12 per cent in Oslo trading after the Norwegian maker of oil platforms, which is controlled by billionaire Kjell Inge Roekke, said it may seek a merger or a takeover.
Kvaerner shares were up 11 per cent at 11.90 kroner (RM5.36) as of 2.18pm in Oslo, valuing the company at 3.2 billion kroner ($500 million).
Kvaerner said that after key contracts and efforts to cut costs the board has decided to look at “industrial partnerships” or “changes” to ownership. Roekke, who with the government indirectly owns 41 per cent of Kvaerner, is shifting around his holdings as the industry struggles with stagnant oil prices and escalating costs. He’s in the midst of splitting oil-services and subsea company Aker Solutions ASA in two.
“We need to always consider our cost reductions in balance with maintaining quality,” chief executive officer Jan Arve Haugan said in an interview in Oslo today. “Looking at other options, other relations, might help us maintain the quality and predictability but then improve our delivery model in order to win new jobs.”
The company said that while it had a record order backlog in 2013, it has accelerated efforts to boost productivity and reduce cost levels. Its sales slid 12 per cent in the second quarter, while its earnings before interest, tax, depreciation and amortization rose 75 per cent to 289 million kroner. Kvaerner had a backlog of 21.5 billion kroner at the end of June.
“It’s a very good thing that the board has taken an initiative like this,” said Atle Kigen, spokesman for Roekke’s Aker ASA holding company. “It’s too early to say” anything about the outcome, he said. “They’re going to look at everything.”
The company earlier this year won a 3 billion krone contract to supply two platforms structures for Statoil ASA’s Johan Sverdrup find, the biggest discovery off Norway in decades. The deal raised the chance that Kvaerner will be able to secure further contracts from Statoil for the field, including topside engineering, procurement and construction, the CEO said at the time.
“To take the next step to ensure Kvaerner’s long-term growth and global competitiveness, we will consider further improvement initiatives, new industrial partnerships or changes to ownership structures, as well as a further streamlining of the products and services offered,” Leif-Arne Langoey, chairman of Kvaerner, said today in the statement. — Bloomberg