Early 2018, Lindsay Goldberg (LG) announced their intention to exit its ownership in Odfjell Terminals BV (OTBV). LG has been Odfjell SE's joint venture (JV) partner in Odfjell Terminals since 2011, and the exit is a natural part of its portfolio management. In agreement with Odfjell SE, LG has run a process to sell its shares in Odfjell Terminals Rotterdam (OTR), Noord Natie Odfjell Terminals (NNOT), Odfjell Terminals US (OT US) and Odfjell Terminals Asia (OT Asia) separately.
Following LG's announced exit, Odfjell SE decided to sell its shares in OTR together with LG. The sale triggered a restructuring and reorganization of OTBV and Odfjell Terminals Asia (OT Asia) management companies, where OTBV became 100% owned by Odfjell SE, and LG became a direct shareholder in the regional JVs in US and Asia. Subsequently, Odfjell acquired LG's shares in the Noord Natie terminal in Antwerp.
LG has now reached an agreement with Northleaf Capital Partners (Northleaf) to sell its shares in OT US. Northleaf is a private equity and infrastructure fund manager based in Canada. The transaction is expected to close in the next three to six months, after which Northleaf will own 49% of the shares in OT US. Odfjell will still hold 51% and continue to be the operating partner.
The new governance model agreed with Northleaf will give OT US a more independent role. OT US will be led by a CEO who will report directly to the OT US board in which both shareholders are represented. This new model changes the way Odfjell governs and operates its terminals going forward, and minimizes the role of the OTBV management company.
Odfjell SE has therefore decided to transfer the tasks and responsibilities from OTBV to OT US and to Odfjell SE, and to subsequently close the OTBV office in Rotterdam. Odfjell will establish selected key roles in Bergen to manage Odfjell’s ownership in the regional JVs. It is planned that the OTBV organization will stop operating as of June 1st, 2019.
This has been a very difficult decision for Odfjell SE since it will affect many people, and we deeply regret the consequences this has for our 11 dedicated colleagues in Rotterdam. It is important to mention that these changes have nothing to do with the professionalism or performance from the team in Rotterdam.
On behalf of Odfjell SE, I want to express my sincere gratitude for the valuable work our team at OTBV has contributed with through the years, and especially during the past years of change.
Everyone affected will be closely followed up with individual meetings these coming weeks. Frank Erkelens and Koert Schouten will lead and oversee the transition with unchanged authority levels until the US transaction closes and will support the transition into the new governance model for a certain period after that.
The OT Asia team in Singapore and the terminals in Korea and China are not affected. OT Asia continues to report to OTBV management until closing of the US transaction, and will report directly to Odfjell SE in Bergen after the transaction.
The process of establishing a key terminal position in the organization in Bergen will start immediately. The transition will be planned in detail and executed in the coming months. Administrative support will be provided by corporate functions of Odfjell SE.
As our latest quarter results show, our terminals delivered improved performance in the fourth quarter of 2018, and we see a high activity level. The positive achievements are a testament to our terminal teams' commitment and know-how, and I am excited about the prospects for Odfjell Terminals moving forward.
Odfjell, as all modern companies, has to change and adapt continuously to succeed. We are going through a transition period now, but it is a shift that we believe is crucial to adjust and respond to changing fundamentals in our industry.
The strategic steps we now take will open new opportunities to develop our core terminals further. With high demand for our services in the US, Asia and Antwerp, we have started the year with a positive outlook.
Together with Northleaf we aim to realize the growth potential we have in the US. I look forward to working together with all of you to further lift our operational excellence in 2019. We have every opportunity to succeed.
Kristian Mørch
