Tenaris acquires ShawCor’s stake in Socotherm Brasil

ShawCor Ltd has completed the sale of its Socotherm division's joint venture interest in Socotherm Brasil, first announced in December 2013, to its joint venture partner, Tenaris. Socotherm Brasil operates a pipe coating facility, which is managed by Tenaris and which is located at the Confab welded pipe mill in Pindamonhangaba, Brazil. ShawCor realised net proceeds of US$ 28.5 million from the sale, with a further payment of approximately US$ 1.2 million to be received later this year.

As of 4 September 2014, Tenaris became the sole owner of 100% of the shares of the company, with full autonomy for the coating business. Its range of solutions for coatings, produced in the welded pipes facility, is now offered to the market under the Tenaris brand. Renato Catallini, President of Tenaris in Brazil, said: “The integration of this coating company with our operations will enable Tenaris to better serve our customers, offering a complete pipe and coating solution mainly for the oil and gas industry worldwide.”

The sale of Socotherm's joint venture interest in Socotherm Brasil is consistent with ShawCor's strategy to focus its pipe coating investments on operations it manages and controls. Following the sale, ShawCor will continue to serve Tenaris' global pipe coating needs and the Brazilian pipe coating market from its global pipe coating plant network. In Brazil, ShawCor will continue to supply its deep water pipeline insulation coating products through its wholly-owned subsidiary Thermotite do Brasil Ltda. This Bredero Shaw facility is currently completing the insulation coating of subsea flowlines and risers for the Petrobras Sapinhoa North field.

Although the company is committed to continuing to serve the Brazil market for deep water pipe coatings, as a result of anticipated changes in Petrobras' development plans for the pre-salt Santos basin, it is likely that the company will incur an impairment charge of up to US$ 30 million, relating primarily to goodwill and intangible assets that arose from the 2010 purchase of the company's joint venture partners in Thermotite do Brasil Ltda. The final amount of this impairment charge would be recorded in the third quarter, once the company has completed its impairment analysis.

Adapted from press release by Rosalie Starling

Read the article online at: https://www.worldpipelines.com/business-news/05092014/tenaris-acquires-shawcors-stake-in-socotherm-brasil-788/