Tuesday 21 April 2020

Norway's Aker ASA holding company has industrial and financial investments

Aker ASA is a Norwegian holding company engaged in offshore fishing, construction and engineering. The company is listed on the Oslo Stock Exchange. It is controlled by Kjell Inge Røkke with 66.66% ownership through TRG Holding. The corporate headquarters are located in Oslo, Norway. The company was founded in 2004. The name comes from the former Akers mekaniske Verksted, which was closed in 1982. The company's stock is traded as OSE: AKER. The huge company's revenue was NOK 64,647 million in 2008). The number of employees is 26,600 (2008). The official company website is www.akerasa.com.

A holding company is a company that owns the outstanding stock of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies to form a corporate group.

The Financial Stock, Aker ASA, is an interesting investment. Companies in the financial sector have receive lots of coverage today as analysts think hard about these investments.

Aker’s ownership interests are mostly in industries which we have in-depth knowledge of: oil and gas, fisheries & biotechnology and maritime assets. These key Norwegian industries are international. Each Aker investment portfolio company is well positioned to benefit from the growing demand for sustainable production of energy and food.

Aker performs these successful tasks: driving operational and strategic improvement, assisting with financing and capital structures, assessing M&A and restructuring opportunities, and continuously developing the capability of the human resource base. Aker certainly has much industrial and financial expertise. The company goal, of course, is long-term profitable growth. The objectives are also competitive market positions and sound organisational cultures. Sustainable value creation for all shareholders is also the goal of the company.

Aker’s industrial holdings totalled NOK 54.2 billion at the end of 2019. This equates to 88 per cent of the total asset value of Aker ASA and holding companies. The industrial holdings portfolio has investments in: Aker BP, Aker Energy, Aker Solutions, Akastor, Kvaerner, Ocean Yield, Aker BioMarine and Cognite. Aker has a long-term investment horizon for these companies.

Aker’s financial investments totalled NOK 7.7 billion at the end of 2019, including NOK 3.7 billion in cash. This equates to 12 per cent of the total asset value of Aker ASA and holding companies. The financial investments are: cash, equity investments in listed companies such as American Shipping  Company, Philly Shipyard, REC Silicon and Solstad Offshore, the real estate development company FP Eiendom and other assets  and receivables. In 2019, Aker Energy and Cognite were reclassified from the financial to the industrial portfolio.

At year-end 2019, Aker had cash holdings of NOK 3.7 billion. The company’s liquidity reserve, including undrawn credit facilities,  totalled NOK 6.6 billion as at 31 December 2019.

At this time, 1 United States Dollar equals 10.64 Norwegian Krone.

The history of Aker ASA is interesting. Kjell Inge Røkke used his investment company Resource Group International to purchase large amounts of Aker shares, and merged the two companies in 1996 to form Aker RGI.

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