Philly Shipyard & Avalotis Industrial Services Sign Term Sheet for Transfer of Prime Plate Facility Operations

Rhea-AI Summary

Philly Shipyard and Avalotis Industrial Services have signed a term sheet to transfer operations of PSI's Prime Plate Facility, enhancing efficiencies in steel surface preparation for shipbuilding. The deal allows PSI to focus on its core operations, including a backlog of six ships, while AIS assumes control of plate priming and seeks additional clients. The agreement is subject to a definitive contract within 90 days and necessary approvals. This collaboration aims to reduce overhead costs for PSI and create new business opportunities for AIS along the Eastern seaboard.

Positive

• PSI can focus on core operations and its six-ship order backlog.
• Anticipated operational and overhead cost savings from AIS taking over the facility.
• AIS plans to expand its plate priming services to third-party clients, creating additional revenue opportunities.

Negative

• None.

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PHILADELPHIA and VERONA, PA / ACCESSWIRE / September 6, 2022 / Philly Shipyard, Inc. (PSI) and Avalotis Industrial Services (AIS), an affiliate of Avalotis Corporation, have signed a term sheet for the transfer of operations of PSI's Prime Plate Facility - a steel blasting and priming facility located outside the shipyard fence-line in the Navy Yard business park. AIS plans to assume full operational control of this facility while servicing all of PSI's plate priming requirements for its shipbuilding, repair, and miscellaneous fabrication activities.

PSI's Prime Plate Facility receives plates from the steel mill, and then shot blasts and primes them with a weldable zinc primer, also known as a pre-construction primer. The cycle takes place in an indoor controlled environment for proper surface preparation.

The transaction contemplated by the term sheet is subject to the parties reaching a definitive agreement within 90 days as well as certain other conditions precedent, including both parties obtaining the necessary consents and approvals.

"We are excited to pursue this new opportunity with AIS, having worked with Avalotis Corporation on many past coating projects," said Steinar Nerbovik, President and CEO of Philly Shipyard. "This potential transaction will allow us to focus our efforts on our core operations and six-ship order backlog - the construction of five National Security Multi-Mission Vessels (NSMVs) and one Subsea Rock Installation Vessel (SRIV). We anticipate operational and overhead cost savings as a result of AIS taking over our plate priming facility."

"Avalotis Industrial Services is excited to take over the prime plate operations. This transaction will allow us to establish new business opportunities all along the Eastern seaboard, while servicing the needs of Philly Shipyard. This is a win-win situation for both organizations," said Joe Professori, President of Avalotis Industrial Services.

In addition to servicing PSI's plate priming requirements, Avalotis intends to market its plate priming services to third party industrial and government clients.

About Avalotis Corporation

Avalotis Corporation is certified by the Society for Protective Coatings (SSPC) for the QP1 and QP2 nationally recognized certification programs and offers specialized industrial services including surface preparation and abatement, painting protective coatings, specialty coatings and linings, flooring systems, scaffolding and containment, and related services.

For more information about Avalotis, please visit www.avalotis.com.

About Philly Shipyard

Philly Shipyard, Inc. (PSI) is a leading U.S. shipbuilder that is presently pursuing a mix of commercial and government work. It possesses a state-of-the-art shipbuilding facility and has earned a reputation as a preferred provider of oceangoing merchant vessels with a track record of delivering quality ships, having delivered around 50% of all large ocean-going Jones Act commercial ships since 2000. PSI is the sole operating subsidiary of Philly Shipyard ASA. Philly Shipyard ASA is listed on the Oslo Stock Exchange (OAX: PHLY) and is majority-owned by Aker Capital AS, which in turn is wholly-owned by Aker ASA (Aker). Aker is an industrial investment company that exercises active ownership to create value. Aker has ownership interests in oil and gas, renewable energy and green technologies, maritime assets, marine biotechnology and industrial software, and its portfolio includes companies like Aker BP, Aker Horizons, Aker BioMarine, Cognite, and Aker Solutions.

For more information about Philly Shipyard, please visit www.phillyshipyard.com.

Media Contacts:

Avalotis Industrial Services
Joe Professori
724-771-8333

Philly Shipyard, Inc.
Matt Cassidy
484-340-2871

SOURCE: Philly Shipyard ASA

View source version on accesswire.com:
https://www.accesswire.com/714834/Philly-Shipyard-Avalotis-Industrial-Services-Sign-Term-Sheet-for-Transfer-of-Prime-Plate-Facility-Operations

FAQ

What is the recent agreement between Philly Shipyard and Avalotis Industrial Services?

Philly Shipyard and Avalotis Industrial Services signed a term sheet for Avalotis to take over the operations of PSI's Prime Plate Facility for steel priming.

How will the transfer of the Prime Plate Facility affect Philly Shipyard?

The transfer will allow Philly Shipyard to concentrate on its core shipbuilding operations and reduce overhead costs.

What are the expected benefits for Avalotis Industrial Services from this transaction?

Avalotis expects to establish new business opportunities along the Eastern seaboard while servicing Philly Shipyard's priming needs.

Is the agreement between Philly Shipyard and Avalotis Industrial Services finalized?

No, the transaction is subject to reaching a definitive agreement and obtaining necessary approvals within 90 days.