New entrant in turbine installation market with alternative funding
After announcing its intention to transition into offshore wind in 2020, legacy oil service company Havfram today announced an LOI to build a series of wind turbine installation vessels (WTIVs). These are to be built at CIMC Raffles in China and will be owned by JP Morgan Global Alternatives (asset manager), while Havfram will lease operate the vessels. Hence, it appears to have an asset-light business model in an asset-heavy industry, as a third-party asset manager will own the vessels, allowing Havfram to lease them. While the lease economics are unknown, turbine installation is a capital-intensive industry with specialised vessels which would normally imply a high lease rate. For existing players, we consider it on the negative side that alternative capital is entering the industry, allowing a new entrant to get established should the LOIs translate into firm yard orders.
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