Ocean Wilsons Holdings Limited
(“Ocean Wilsons” or the “Company”)
Sale of interest in Wilson Sons S.A. to SAS Shipping Agencies Services Sàrl
Ocean Wilsons is pleased to announce that its wholly-owned subsidiary, OW Overseas (Investments) Limited (“OWOIL“), has agreed to sell its 56.47% interest in Wilson Sons S.A. (“Wilson Sons“) to SAS Shipping Agencies Services Sàrl (“SAS“), a wholly-owned subsidiary of MSC Mediterranean Shipping Company SA (“MSC“), for total cash consideration of R$4.352 billion (equivalent to R$17.50 per share) (the “Transaction“).
Transaction highlights
· Sale of the Company’s 56.47% interest in Wilson Sons, for cash consideration of R$4.352 billion (the “R$ Purchase Price“). The R$ Purchase Price, before it is paid to OWOIL, will be converted from R$ to US$ at the exchange rate published by the Central Bank of Brazil as of the business day immediately preceding the completion date. As at 18 October 2024, being the latest practicable date prior to the publication of this announcement, the R$ Purchase Price was equal to US$768 million.[1]
· It is anticipated that Brazilian withholding tax in respect of capital gains, at rates of between 15.0% and 22.5%, will be applied to OWOIL’s gain on the disposal of its interest in Wilson Sons. The Company expects up to US$142 million (calculated using the Applicable Exchange Rate) to be withheld by SAS pursuant to the Brazilian capital gains tax regime (estimated on a reasonable worst-case basis). The Company expects to ultimately realise net cash proceeds of at least US$593 million (calculated using the Applicable Exchange Rate) as a result of the Transaction, net of transaction costs and taxes. The Company does not expect that material taxes will be payable on the transaction proceeds in any other jurisdiction. Shareholders will be updated when the amount of Brazilian withholding tax, and consequently, the net cash proceeds that the Company expects to receive as a result of the Transaction, have been ascertained.
· The Transaction agreement contemplates Wilson Sons (i) paying the dividend declared by the Wilson Sons board of directors on 11 October 2024 and (ii) continuing to pay dividends to its shareholders of up to the R$ equivalent of US$22 million per quarter during the period prior to completion of the Transaction (“Completion“), subject in each case to Wilson Sons generating sufficient profits in the relevant quarter (the “Permitted Amount“). To the extent Wilson Sons pays dividends in excess of the Permitted Amount, the proportion received by OWOIL will result in a commensurate reduction to the R$ Purchase Price.
· The Transaction is expected to complete during the second half of 2025 and is conditional on the receipt of applicable regulatory clearances between signing and Completion.
· The Ocean Wilsons’ Board of Directors (the “Board“) is of the opinion that the Transaction is in the best interests of Ocean Wilsons’ shareholders as a whole.
Caroline Foulger, Ocean Wilsons’ Chair, commented:
“I am delighted to announce that, following a comprehensive strategic review of the Company’s investment in Wilson Sons, we have reached an agreement for the sale of our holding in Wilson Sons to SAS. This transaction represents the successful realisation of our long-term investment in Wilson Sons, demonstrating our ability to identify opportunities to create significant value for our shareholders.
“Our strategy has always been focused on delivering enhanced long-term value to our shareholders by carefully balancing investment risks and avoiding the distractions of short-term market cycles. This sale aligns with our purpose and will allow us to concentrate on developing the business through sustainable profitable growth.
“Since our initial investment, Wilson Sons has demonstrated significant financial growth and is today the largest integrated port and maritime logistics operator in Brazil. Under SAS’s ownership, we are confident that Wilson Sons will benefit from additional resources and support.
“The Board believes that it is a compelling time to realise its investment. This is an exciting time for Ocean Wilsons, and we remain committed to maximising shareholder value through strategic decision-making and disciplined investment growth”.
Use of net proceeds
The Board currently expects to return a meaningful proportion of the net proceeds from the Transaction to shareholders (for example, by way of a special dividend or a share buyback programme (or a combination of the two)), and is currently reviewing a number of options with respect to the remainder, one of which could include re-investing some or all of the remainder into the diversified portfolio business of its wholly-owned subsidiary, Ocean Wilsons (Investments) Limited (“OWIL“).
In advance of concluding how the net proceeds will be allocated and deployed, the Board wishes to consult with shareholders to canvass their views and ensure that its decision considers the views of shareholders as a whole. The Board will provide further detail on its intended application of the net proceeds following completion of that consultation exercise.
Impact on Ocean Wilsons
Financial impacts of the transaction on Ocean Wilsons are currently estimated (based on financial statements for the period ended 30 June 2024) to be as follows:
· The net proceeds from the Transaction will increase the Company’s net cash position.
· The Company will present the ‘Brazil – maritime services’ segment assets and liabilities as held-for-sale until the Completion within its future statutory accounts.
· As at 30 June 2024, the net assets of the ‘Brazil – maritime services’ segment totalled US$458 million and the Company’s equity included US$203 million for non-controlling interests related to this segment.
· The Company would present the ‘Brazil – maritime services’ segment results as discontinued operations within its future statutory accounts and will continue to consolidate its results until Completion takes place.
· As a result, on Completion, the Company would recognise an accounting gain equal to the net proceeds received by the Company adjusted for the ‘Brazil – maritime services’ segment net assets, the related non-controlling interest balance, and the realisation of the cumulative translation reserve as at the date of Completion.
Were the net proceeds remaining after any return(s) to shareholders to be used solely for investment in the diversified portfolio business of OWIL, the remaining business of Ocean Wilsons and its subsidiaries (the “Group“) would consist only of that business. The Board is aware that, in this scenario, it may be deemed necessary for the Company to transfer its listing from the FCA’s equity shares (commercial companies) listing category to its closed-ended investment funds category. Any such transfer of listing category would be subject to a shareholder vote in accordance with the UK Listing Rules. The Board expects to consult with shareholders as to any consequential change of listing category as part of its consultation on the use of the net proceeds.
Assets of Wilson Sons
As at 30 June 2024, the value of the gross assets of Wilson Sons was US$1.126 billion. In the 2023 financial year, the profit after tax attributable to the assets the subject of the Transaction was US$81 million.
OWOIL has a 56.47% economic interest in Wilson Sons.
Next steps and timing
The Transaction is expected to complete during the second half of 2025. The Transaction is conditional upon the satisfaction of the Conditions (as defined in Appendix V (Material Contracts) to this announcement).
Additional information
The Transaction is a significant transaction for the purposes of Chapter 7 of the UK Listing Rules due to the agreed total consideration exceeding 25% of Ocean Wilson’s market capitalisation. As such, this announcement is made in accordance with Ocean Wilsons’ disclosure obligations pursuant to Chapter 7 of the UK Listing Rules.
Unless otherwise stated, all financial information relating to Ocean Wilsons and Wilson Sons disclosed in the announcement has been extracted from the Ocean Wilsons’ published audited Consolidated Financial Statements for the year ended 31 December 2023 and 2022 or from the Ocean Wilsons’ published unaudited Interim Consolidated Financial Statements for the period ended 30 June 2024, which were all prepared in accordance with International Financial Reporting Standards.
Certain figures included in this announcement have been rounded. Accordingly, figures shown as totals may not be an arithmetic aggregation of the figures that precede them.
The Company is being advised by BTG Pactual (financial adviser), Slaughter and May (English law legal advisers), Pinheiro Guimarães Advogados (Brazilian law legal advisers) and Peel Hunt LLP (UK financial adviser and broker).
The person responsible for arranging for the release of this announcement on behalf of the Company is Leslie Rans, Chief Operating and Financial Officer.