HC2 Holdings, Inc. (“HC2”), the legacy controlling company of Global Marine Group (GMG), announced recently the completion of the sale of its 30% stake in Huawei Marine Networks Co., Limited (“HMN”) to Hengtong Optic-Electric Co Ltd (“Hengtong”). The 30% interest in Huawei Marine Networks was sold for $85 million. Huawei Marine Networks has an enterprise value of US$285 million. Huawei Marine Networks is now owned by Hengtong (81%) and HC2 (19%) subject to a two-year put option. According to GMG, it has fully divested stake in Huawei Marine Networks.
Global Marine Systems Limited is one of the three operation companies affiliated to Global Marine Group (“GMG”). Before the transaction, GMG was indirectly owned by HC2 (73%) and Fugro (23.6%), a Dutch offshore services provider.
The transaction concludes the sale process that was announced in October 2019. Then, Huawei Marine Networks was valued at US$285 million, and GMG's 49% stake in Huawei Marine Networks was valued at US$140 million. The 30% interest in Huawei Marine Networks was sold for $85 million. The remaining 19% stake in Huawei Marine Networks was transferred to another enitity under indirect control of HC2.
After taxes and transaction fees, HC2’s portion of the total net proceeds will be used to redeem over $50 million of HC2’s 11.5% Senior Secured Notes (“11.5% Notes”) at a redemption price of 104.5% of the principal amount in June 2020. Furge received a sum of US$17.3 million from the sale of the 30% stake in Huawei Marine Networks.
HC2 also sold 100% interest in Global Marine Group (excluding HMN) to a US investment firm J.F. Lehman & Company, LLC (JFLCO), at US$250 million. The transaction was closed on March 2, 2020. After repayment of approximately USD 97 million of pension and debt obligations at GMG, along with other customary closing adjustments and transaction fees, HC2 received net proceeds of $99 million from the sale, Fugro net proceeds of received US$37 million.
GMG has fully divested its stake in Huawei Marine Networks after 12 successful years.
HC2 still holds 19% interest in Huawei Marine Networks subject to a two-year put option.