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Havfram’s entry confirmed

Havfram’s entry into the offshore wind installation market has been confirmed today, as it announced its first newbuild WTIV order with CIMC Raffles in China, with options for more vessels. Its entry had been expected for some time, as Havfram last year signed an LOI with CIMC Raffles for a “series” of vessels and last month secured USD250m from Sandbrook Capital (PE) to fund its newbuild programme. Havfram today said it has raised another USD250m in equity from PSP Investments (via Sandbrook Capital), leaving it with total equity funding of USD500m, which we estimate could cover at least three newbuilds, assuming c60% debt financing. Havfram’s entry and solid funding imply increased competition in the wind turbine installation vessel (WTIV) market, which we consider on the downside for the established contractors (Cadeler, Eneti, Seaway 7). However, as we expect Havfram to be disciplined given its PE backing, and we continue to see increasing demand towards the end of this decade when we forecast a supply deficit of 13 vessels (before Havfram’s newbuild), we believe there is room for additional newbuilds. Nevertheless, we consider new entrants with access to capital to be on the negative side for established players.