Mitsubishi-led group exiting stake in Brazil shipyard -report

Namura Shipbuilding

05/01/2016 15:03

RIO DE JANEIRO, Jan 5 (Reuters) - A group of Japanese 
shipbuilders led by Mitsubishi Heavy Industries Ltd (MHI) 
 7011.T  plans to exit its 30 percent stake in Brazilian 
shipbuilder Ecovix and declare the investment as a loss, Valor 
Economico newspaper reported on Tuesday. 
    The group led by MHI plans to sell its stake in Ecovix, 
which it bought in 2013 for about $300 million, to Jackson 
Empreendimentos for a "symbolic amount," Valor reported.  
    Jackson Empreendimentos owns the remaining 70 percent of 
Ecovix, the controller of Estaleiro Rio Grande (ERG) shipyard in 
the Brazilian city of Rio Grande. In addition to MHI, the 
Japanese group includes Mitsubishi Co  8058.T  and the Imabari, 
Namura  7014.T  and Oshima Shipbuilding companies, the newspaper 
reported. 
    MHI's Brazilian unit did not answer calls requesting 
comment. 
    The group was brought into ERG, founded in 2010, to provide 
technology and management expertise and help the shipyard 
overcome quality problems, cost overruns and delays.  
    The sale comes as ERG's contract to build eight hulls for 
floating production ships known as FPSOs for Brazil's state-run 
oil company Petroleo Brasileiro SA  PETR4.SA  is in jeopardy. 
Its contract to build drillships for Sete Brasil, another 
troubled Brazilian shipbuilder, is also in doubt. 
    Ecovix is part of the same Jackson Empreendimentos group 
that controls Engevix, a Brazilian construction company caught 
up in a giant price-fixing, bribery and political kickback 
scheme at Petrobras, as the oil company is commonly known, Valor 
reported. Engevix has had two executives jailed for their role 
in the scandal.  
    ERG's problems have led to the layoff of thousands of people 
and the suspension of most work. The shipyard is undergoing a 
restructuring aimed at finding a way to reduce 1.7 billion reais 
($425 million) owed to clients and suppliers, the newspaper 
reported. 
    Just to complete the hulls, ERG needs about 1.5 billion 
reais in new capital, Valor reported, and MHI's departure from 
Ecovix could make it easier to find a partner to revive the 
company. 
    Ecovix and Engevix did not respond to calls seeking comment. 
    China Offshore Oil Engineering Company (COOEC) is a possible 
partner for ERG, Valor reported. COOEC is part of the same group 
that includes China National Offshore Oil Corp  0883.HK , which 
owns a stake in the giant Libra prospect in Brazil's offshore 
Santos basin. 
    ($1 = 4.00 Brazilian reais)  
 
 (Reporting by Jeb Blount; Editing by Will Dunham) 
 ((Jeb.Blount@thomsonreuters.com; +55-21-2223-7143; Reuters 
Messaging: jeb.blount.thomsonreuters.com@reuters.net)) 
 
Keywords: MHI BRAZIL/ECOVIX