Braemar Shipping Services has offloaded its last remaining engineering business as it continues to focus on developing its core shipbroking operations.
The London-listed group said it had agreed to sell its LNG and LPG consultancy company Wavespec to Wavespec Holding —an organisation registered in the Netherlands. The price is £2.635m ($3.63m).
Wavespec was the last of four engineering operations owned by Braemar, following its disposal of the other three in 2019 to Norwegian competitor Aqualis to create AqualisBraemar.
Braemar chief executive James Gundy said: "The disposal of Wavespec is in line with our stated strategy of refocusing Braemar on its shipbroking core, and I am therefore pleased that we have been able to find suitable buyers.
"We look forward to continuing to work with them under their new ownership and seeing the business thrive."
In the year to 29 February 2020, Wavespec generated revenue of £3.1m and an underlying operating loss of £1.4m.
Wavespec will now be treated as a discontinued operation for the year ended 28 February 2021.
The total reported loss is estimated to be around £2.4m, made up of a trading deficit of £1.7m and an estimated loss on the disposal of £700,000.
Wavespec's gross assets, as at the last reported balance sheet date of 31 August 2020, were £500,000.
The buyer has issued a promissory note for the sales price. This matures in March 2026.
Braemar said Wavespec Holding must secure the note by providing a standby letter of credit issued by an international bank with an acceptable credit rating.
Should this fail to happen, Braemar can elect to receive £500,000 in cash from the buyer as part of the payment.
Debt to be reduced
"The board intends to use the consideration from the disposal to improve the net debt position of the company," Braemar said.
Wavespec's employees, including managing director Sheila McClain, will transfer to the new company.
Paolo Danesi of Wavespec Holding said: "We are delighted to have completed this acquisition of Wavespec, whose brand and expertise is very well known and respected as experts in the LNG industry.
"I am looking forward to working with Sheila and her team to build the business in what is a growing market for their services."
In January, Braemar sold half of its 21% stake in AqualisBraemar to reduce debt further. The deal netted Braemar £6m.
