Vard Takes Control of Vard Promar, Brazil

Vard Holdings Limited (VARD) has increased its ownership stake in its indirect subsidiary in Brazil, Vard Promar, to 95.15%.

Vard Promar, previously held 50.5% by VARD’s wholly-owned subsidiary, Vard Group AS, and 49.5% by a local partner, PJMR Empreendimentos Ltda. (“PJMR”), is the newest shipyard asset in the VARD portfolio. Following the recent closure of the Vard Niterói shipyard, the Group will concentrate all its Brazilian shipbuilding activities on the new yard, located in the Suape industrial area, in the state of Pernambuco.

The shipyard, built between 2011 and 2013, has so far delivered one Liquefied Petroleum Gas (LGP) carrier for Transpetro, and is in the final stages of construction of a second one. Furthermore, the yard has two more LPG carriers in the order book, in addition to two advanced Pipelay Support Vessels (PLSV) for a joint venture between DOF and Technip.

During the ramp-up phase, Vard Promar had incurred financing needs, largely funded by VARD through shareholder loans. The increase in shareholdings results from a capital increase in Promar that, not being underwritten by minorities, is entirely taken up by Vard Group AS through the conversion of shareholder loans into newly issued equity, with no cash consideration. The capital increase leads to a more balanced financial structure for the yard and lays the basis for stable operations going forward.

As part of an overall agreement resolving the relations between VARD and its long term partner in Brazil, PJMR, and providing for an amicable termination of the partnership, the parties have agreed put and call options for PJMR’s remaining 4.85% shareholding in Vard Promar.

The transaction underscores VARD’s ambitions and commitment to remain a key player in Brazilian shipbuilding, supporting the local oil and gas industry. At the same time, gaining full control of the yard increases VARD’s strategic options to adapt its presence in Brazil to expected future market demand.