Keybanc Says Brazil Deal Could Explain Why McDermott (MDR) Pulled from Conference
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Analysts at Keybanc comments on McDermott International Inc. (NYSE: MDR), which has surged recently on takeover speculation. The firm said a Brazil deal may be why they pulled out of a conference.
The firm comments, "As per news magazine, "energiahoje", MDR has joined with Construcap, a Brazilian company focused on large civil construction projects, to construct and operate a shipyard at the Suape industrial complex in Pernambuco. We believe a Brazil article published over the weekend regarding this venture could be partly the reason for MDR pulling out of attendance in a peer conference earlier on this week. MDR will cover 40%, or $179 million of the $448 million yard capital spending cost, which is scheduled for operation in 2013. The CMO Consortium, which includes Orteng (another Brazilian company that manufactures electrical equipment) and Construcap (a Brazilian civil construction company), will allegedly be using an optimized plant layout that will allow the yard to construct modules in nine months, vs. the typical year, in various weather conditions. The trend for these partnerships is likely to continue due to increased local content provisions, and we would view this investment, if confirmed, to be a positive for MDR growing its presence in Brazil."
The firm comments, "As per news magazine, "energiahoje", MDR has joined with Construcap, a Brazilian company focused on large civil construction projects, to construct and operate a shipyard at the Suape industrial complex in Pernambuco. We believe a Brazil article published over the weekend regarding this venture could be partly the reason for MDR pulling out of attendance in a peer conference earlier on this week. MDR will cover 40%, or $179 million of the $448 million yard capital spending cost, which is scheduled for operation in 2013. The CMO Consortium, which includes Orteng (another Brazilian company that manufactures electrical equipment) and Construcap (a Brazilian civil construction company), will allegedly be using an optimized plant layout that will allow the yard to construct modules in nine months, vs. the typical year, in various weather conditions. The trend for these partnerships is likely to continue due to increased local content provisions, and we would view this investment, if confirmed, to be a positive for MDR growing its presence in Brazil."
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