CBO looks at IPO and buyout of competitors

(Valor) After completing what it classifies as its third wave of growth, Companhia Brasileira de Offshore (CBO) will “hibernate” to absorb the acquisition of ten offshore support vessels before starting a new expansion cycle. With 44 vessels, the company is one of the largest in the country in offering this service to oil companies. At the same time that it expands the offer of vessels, the CBO is studying the launch of shares and sees room for consolidation in the sector.

In 2019, CBO bought ten vessels, each for about a third of the value of a new one, taking advantage of a scenario started five years earlier, when supply was much greater than demand, which led to a drop in prices. daily charter rates. The scenario at that time was due to the economic crisis, the high indebtedness of Petrobras – which later resulted in a broad program of divestments – and the impact of the investigations of Operation Lava-Jato. The company suspended or revised contracts that left industry segments with idle capacity.

The company carried out market studies, which pointed to the acquisition of vessels as a faster way to grow. “Starting in 2018, we studied this market to know where we were going, as we understood that CBO was not going to continue growing by building vessels,” said the company’s commercial technical director, Marcelo Martins.

He pointed out that the scenario they envisioned in the past has recently begun to materialize: daily rates have started to grow again. “Whoever bought it, bought it”, joked the CEO, Marcos Roberto Tinti. The last two boats of this acquisition went into operation this month.

CBO belonged to the Fischer group, a traditional Brazilian shipowner, until it was purchased in 2013 by Vinci Partners and Pátria Investimentos, in addition to the equity arm of the National Bank for Economic and Social Development (BNDESPar). Today the company does not rule out acquiring companies in the sector, not least because it sees consolidation as a natural move in a segment in which five or six operators hold 50% to 55% of the total number of vessels. The rest, said Tinti, is in the hands of 40 other companies.

“The market is pulverized,” said Tinti. A demonstration of CBO’s firepower took place in September last year, with the acquisition of the Brazilian subsidiary of Italian Finarge, for US$ 94.4 million. With the purchase, the company added five vessels to the fleet – four already with contracts with Petrobras.

According to the CEO, the CBO is prepared for an IPO – the company has been publicly traded since 2015, but is not yet listed on the stock exchange. The issuance of shares depends only on improving market conditions: “The company is ready, structured. We have a board of directors with two independent directors,” said Tinti.

A natural path for CBO – and the entire sector – is to offer the charter for the offshore wind power segment, which is still being developed in the country. Tinti and Martins point out that the issue still depends on a regulatory framework, however, a way to speed up the implementation of offshore wind farms would be to adapt Law 9,432, focused on navigation, which instead of dealing with oil exploration and production activities, could have the wording changed to energy exploration and production activities.

“We already have a regulatory framework ready, we are going to use it in the offshore wind market”, said Martins.

One of the main inputs for the operation of support boats is fuel oil, which is highly polluting and emits greenhouse gases. CBO’s business model predicts that the cost of fuel belongs to the customer, but as a way of adding value to the service and meeting the ESG criteria, the company has developed a project in which it seeks to reduce fuel consumption and CO2 emissions. – within the goal of zeroing them by 2025. To speed up the achievement of the objective, the company has been buying carbon credits since September last year, informs Martins.

In parallel, the company is carrying out research and development (R&D) studies in search of alternative solutions to fuel oil. One of the lines of research involves the use of electric propulsion and batteries in vessels. It also analyzes the possibility of adopting natural gas instead of fuel oil, in the liquefied modality. The problem, according to the executives, is that the supply lacks an infrastructure that does not yet exist.

The company also follows the movement of its European competitors to the use of green hydrogen as a substitute for fossils. In this line of studies, still preliminary, the CBO analyzes alternatives such as ethanol. “I can’t say much, I can’t give spoilers, but alternative fuels are on the CBO agenda and we are working hard in this regard,” said Tinti.

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