Aker Kvaerner Group
• strengthening profitability through improved operation and better co-ordination between the
Engineering & Construction (E&C) and Oil & Gas (O&G) business areas.
• taking greater advantage of E&C’s strong global position and exploiting its extensive existing
expertise in pipelines, refining and other land-based process plants for the oil and gas industry.
• strengthening the technological platform through the acquisition of small technology-oriented
companies which complement the existing operations and product portfolio.
• strengthening the presence in selected regions such as the Gulf of Mexico, Brazil, western
Africa and the Caspian, with a particular focus on subsea production in deep water• assessing
alliances and partnerships with large companies.
During 2000 and 2001 the more than 30 businesses was sold or closed. Overhead costs was
reduced by more than NOK 2 billion per year, net interest bearing debt was reduced by NOK 6
billion.
The CEO breach the disclosure requirement
But these efforts weren’t enough to solve the mounting financial and operational challenges, and
during the summer 2001 the CEO Kjell Almskog knew that they were going to meet a liquidity
crisis in August, if they didn’t borrow more money.
To the shareholders he told that the future prospect for the 3q was quite good.
Now the bard struggled for new loans, but the banks said no, and in August the company was in
an acute liquidity crisis.
Now the situation was so different from what the CEO had told the shareholders, so the Oslo
Stock Exchange (OSE) gave Kvaerner an penalty of a half million US $ for breach on the
disclosure requirement.
Kjell Almskog didn’t tell about the financial difficulties of the Kvaerner Group, and now they
were suddenly fighting against bankruptcy in day to day operations.
Kvaerner merge with Aker Maritime
After two months with negotiation with banks and investors Kvaerner has agreed to merge with
it’s main shareholder and industry rival, Aker Maritime. Kvaerner is saved from chapter 8.
The news brought Kvaerner's long-running battle against bankruptcy to an end, though the future
was still uncertain for Kvaerner's 35,000 employees, 7,000 of them in the UK.
The rescue plan was made by the chairman of Aker Maritime, Kjell Inge Rokke, who have
previous attempt to merge his firm with Kvaerner, but have been strongly resisted by both
Kvaerner's management and its board of directors. Mr. Rokke owns more than 50% of the shares
in Aker Maritime and is now the most powerful man in Kvaerner.
Kvaerner, which was suffering a serious cash crunch that would have brought it to its knees in
under a week, had repeatedly called on Mr Rokke to bail it out, but his refusal to step in without
being properly rewarded had been consistent.
But Kvaerner had to accept Mr. Rokkes deal that implied that Aker Maritime will own about
50% of Kvaerner. Aker Maritime injected NOK 2.8 bn in net assets, raised
another NOK 3.5 bn through two direct issues and renegotiated NOK 8.6 bn of Kvaerner's debt.
The group decided to adopt [next page]