Oman’s Renaissance Services plans to sell its Topaz Engineering unit, booking a loss of $5.5 million amid the biggest drop in global energy prices since 2008.
Muscat-based Renaissance said it has agreed to sell the marine engineering and shipbuilding company for $18.5m to Chalmers Holdings, a Dubai-based marine and offshore outfit.
The sale follows Renaissance’s earlier divestment of a Topaz Engineering unit in 2013 and is part of a strategy to sell non-core assets that started three years ago.
“The strategy has been implemented over a number of years to see Renaissance divest its non-core businesses and focus on offshore support vessels and contract services,” a Renaissance spokesman told The National.
The spokesman said Renaissance will focus on its international offshore vessels through Dubai-based Topaz Energy and Marine, a separate company from Topaz Engineering, and developing its contract services business in Oman.
Crude oil has lost 48 per cent in the past 12 months amid an increase in supply from North American producers and a drop in demand from emerging markets such as China.
That trend has put producers, explorers and support companies under severe financial pressure.
Renaissance shares have shed 66 per cent of their value in the past year.
In August Topaz Energy and Marine reported a second-quarter loss of $4.1m related to investments in West Africa and a one-off $8m charge associated with debt refinancing.
It had reported a $12.7m profit for the second quarter of last year.
Consolidated revenue fell 6 per cent to $90.1m from $95.9m for the year-earlier period.
Despite the drop in earnings and tough environment for oil services companies,it said last month that it would buy two subsea vessels from Vard Brattvaag of Norway for about $115m. Topaz Energy and Marine, which operates a fleet of more than 95 offshore support vessels, said the two vessels are due for delivery in the third and fourth quarters of 2017. The company also has options for two more vessels.
Follow The National’s Business section on Twitter