Dutch Damen Shipyards Group is expecting that Romanian government’s pre-emption right regarding Mangalia shipyard will be waived by the end of the month, enabling Damen to acquire a share in the yard.
Once the waiver of the pre-emption right is made public, Damen will be able to complete the transaction, the shipbuilder said in a statement.
“We look forward to a positive result of the shareholders’ vote at the extraordinary shareholders meeting of March 30, where hopefully the pre-emption right will be waived. This is the key hurdle in the process towards a long-term strategic partnership with the Romanian government,” René H. Berkvens, CEO of Damen Shipyards Group, said.
In November 2017, Damen signed a share purchase agreement for the acquisition of Daewoo Shipbuilding & Marine Engineering’s (DSME) shareholding in Daewoo Mangalia Heavy Industries (DMHI). DSME owned 51% of the shares in the yard and the Romanian government the remaining 49%.
However, the government was blocking the agreement between Damen and Daewoo for several months as it wanted to exercise its pre-emptive right through its shareholding in Santierul Naval 2 Mai SA Mangalia.
On March 21, 2018, negotiations between Damen and the Romanian government on DMHI were completed. The state decided to waive its pre-emptive right to acquire the stake owned by DSME under one condition. Specifically, Damen will have to assign 2% of the 51% share bought from Daewoo.
With this agreement, the Romanian government is becoming the majority shareholder in DMHI. As a result, the government will own a 51% stake in the yard and Damen the remaining 49% stake, Romanian Ministry of Economy said in a separate statement.
“Together with the great support of the Romanian government, Damen will restore the financial health of the yard, rebuild employment numbers and increase activity levels of high-end projects. In the meantime, Damen will facilitate a smooth transition and keep talented and skilled resources meaningfully employed,” Berkvens added.
Located on the Black Sea coast, the Daewoo shipyard in Mangalia was established in 1997 as a joint venture between Daewoo and 2 Mai Mangalia Shipyard with Daewoo as majority shareholder. The facility has been undergoing capital erosion since 2008 due to the lack of orders amid the global financial crisis, production delays and accumulated losses.