We are pleased to post HC2’s press release about the sale of Global Marine Systems Limited’s share in Huawei Marine to Hengtong. The joint venture has seen tremendous growth since its formation and has made a substantial impact in the subsea telecommunications industry. We are proud to have played a part in driving Huawei Marine’s extraordinary growth and wish the company and its new majority owner Hengtong every success in the future.
– Sale pegs HMN equity value at $285 million –
– Global Marine Group’s 49% interest valued at $140 million –
– HC2 continues to advance strategic alternatives for Global Marine subsidiary –
New York, New York – October 30, 2019 – HC2 Holdings, Inc. (“HC2” or the “Company”) (NYSE: HCHC), a diversified holding company, announced today that its Marine Services Segment, Global Marine Group (“GMG”), a leading provider of offshore engineering services to the telecommunications, oil & gas, and renewables industries, has agreed to a sale of its stake in Huawei Marine Networks Co., Limited (“HMN”), its 49% joint venture with Huawei Technologies Co., Ltd. (“Huawei”), to Hengtong Optic-Electric Co Ltd (“Hengtong”). The sale of GMG’s interest values HMN at $285 million, and GMG’s 49% stake at approximately $140 million.
Under the agreement, GMG will sell 30% of HMN to Hengtong at closing and retain a 19% interest in HMN under a two-year put option agreement at the greater of the same equity value ($285mm) or fair market value. Hengtong is also purchasing Huawei’s full 51% stake and will own 81% of the joint venture upon the closing of both sales, and 100% upon the exercise of GMG’s put option. Completion of the sale is expected during the first quarter of 2020, subject to customary closing conditions, with proceeds delivered to GMG at that time. After satisfaction of any pending obligations and in concert with any sale of Global Marine Systems Limited (“GMSL”), HC2’s share of the net proceeds from the HMN sale will be utilized to reduce debt at the HC2 holding company level.
“We are very pleased at the outcome of the joint venture sales process,” said Philip Falcone, Chairman, President and Chief Executive Officer of HC2. “We want to thank our partners at Huawei, with whom we have had a great working relationship since our acquisition of GMG five years ago, for successfully growing the joint venture and completing over 98 projects globally since inception. Inking this deal now further sets the stage for a potential sale of GMG, including the main operating subsidiary, Global Marine Systems Limited, which continues to be a top priority for us as we close out 2019.”