New investor buys into A&P shipyards

A&P is expected to name a new majority shareholder next week to provide the investment to expand the company into a worldwide business and increase the involvement of its Tyneside shipyards in the offshore oil and gas industry. The strategic investor is expected to take over the majority stake in the company held by the […]

A&P is expected to name a new majority shareholder next week to provide the investment to expand the company into a worldwide business and increase the involvement of its Tyneside shipyards in the offshore oil and gas industry.

The strategic investor is expected to take over the majority stake in the company held by the venture capital arms of Schroders and NatWest, which bought into the company in 1990 for a period expiring at the end of the year. The two rejected a trade sale or a flotation.

Hambros Bank, agent for the transaction, declined to name the new investor.

A&P’s Tyneside operation sees the global market for converting tankers into floating production storage and offloading (FPSO) vessels for the offshore industry as an opportunity for expansion. It has already worked on two FPSO conversions for the North Sea stiffening the hull structures and installing the pods on which the process modules rest.

The investment required at Tyneside as at A&P’s other main operations at Southampton (container ships) and Falmouth (ferries) is in people rather than facilities. A substantial apprenticeship programme is under way to compensate for an absence of investment from the late 1980s, and there will be large-scale recruitment of graduates.

A&P aims to become a world-wide operator and the plan could involve investment in facilities overseas.

A&P’s Tyneside operation could not carry out FPSO conversion contracts on its own the five dry docks at its three sites are not large enough to accommodate the 80,000 tonnne vessels, and it lacks the expertise to install the topside process equipment. But it sees potential in bidding for such work as part of a Tyneside consortium.

Neighbouring yards can provide what it lacks. The Tyne Tees dockyard has a big enough dry dock to install the turrets that allow the FPSOs to weathervane on station and through which the production passes, while Aker McNulty and Amec Offshore can handle the topside work.