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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: CommanderCricket who wrote (13880)	10/11/2002 5:25:02 PM
From: Tomas	Read Replies (1) \| Respond to of 206362

Moe the merrier in new PGS role Upstream, October 11 By Knut Evensen Norwegian industrialist Jens Ulltveit-Moe once again finds himself in the limelight. The jovial self-made multi-millionaire, who has built a fortune on turnaround cases and high-risk projects, has now set his sights on the fading star that is seismic and production outfit Petroleum Geo-Services (PGS) Ulltveit-Moe entered the 27 September extraordinary general meeting of PGS holding the 11% of company shares he purchased in recent weeks -- and determined to make some swift changes. One hour later, Ulltveit-Moe was company chairman and PGS founder Reidar Michaelsen had been reduced to an ordinary board member. Two hours later the new board, hand-picked by Ulltveit-Moe, voted to move PGS headquarters from Houston to Oslo -- and not to London as the old board decided only weeks earlier. The two US board members, Michael Mathews and Mark Frantz, were swept out of the boardroom along with most of the American investors. Some of them are now complaining about the process. They say it went too fast, giving them only a couple of weeks to act, whereas the usual US notice is four weeks. "This process has been in the best tradition of the market economy," says Ulltveit-Moe. "The changes were done very swiftly for the good of the company. It's painful to have such processes running for a long time." He adds: "The market showed little confidence in the previous board." Ulltveit-Moe must now wield the cost-cutting axe on the debt-ridden company. The old board prescribed $70 million to $80 million in annual cost savings, but that will not be enough. With $930 million in debt maturing in the second half of next year, it is widely accepted that Ulltveit-Moe needs to build trust among bankers and PGS' beleaguered investors. It is a giant task, but Ulltveit-Moe has been down this road before. "As I see it, PGS has great assets and a very able organisation, which should have long-term value. The challenge is to find the right capital structure for the company," says Ulltveit-Moe. Complicating the issue is French seismic company CGG, which recently acquired 7.5% of PGS and has stated very clearly that it would like the two outfits to join forces. "It is true that there is a oversupply of seismic vessels and we can't rule out restructuring in the seismic industry, but that is certainly not my first priority," says Ulltveit-Moe. "My first task is to rebuild the financial health of PGS. Then we'll see about the best future structure." Ulltveit-Moe started his career empty handed, but with a head full of ideas, a bachelors degree from the Norwegian School of Economics and a masters degree in international affairs from Columbia University. From that position he has become one of the most influential people in Norway, with an impressive network of interests and a net worth of between $300 million and $400 million. Ulltveit-Moe is president of the Confederation of Norwegian Business & Industry, a member of state oil company Statoil's election committee and board member of a number of numerous companies, including PGS. He is also a former president of the Norwegian Shipowner Association. A telling moment in his history came in 1975, when he ditched a potentially brilliant career at McKinsey's office in New York to start working for Frits Fentener Van Vlissingen at Dutch conglomerate SHV. "Instead of a life as a bridesmaid I wanted to be a bride -- I wanted to implement the advice I gave," says Ulltveit-Moe. He became managing director of SHV subsidiary Asterix in London, where he was given $100 million to build a tanker fleet operation. This experience led him back to Norway, where creditors appointed him to rescue the troubled shipping company Knutsen OAS in 1980. "The debt (at Knutsen) far exceeded the assets, and the deal was that the banks got everything up to zero and the owners everything above," he says. By 1984 Ulltveit-Moe had turned the company around, was managing director and held 60% of the company (a share he retains today). He had also earned enough money to start his own business, known as Umoe. During the 1990s Ulltveit-Moe became Norsk Hydro's preferred supplier of offshore construction installations -- having bought and merged the HMV and Sterkoder yards -- in what proved to be a stormy relationship. After winning the construction contracts for both the production semisubs Troll C the Visund, costs at the yards escalated. "My company lost millions of dollars and was facing bankruptcy," says Ulltveit-Moe. Hydro was under enormous financial pressure, with oil at $10 per barrel, but Ulltveit-Moe's yard was thinly capitalised and would not survive without additional funds -- leaving Hydro with the choice of picking up the inflated tab or swallowing the delays and further cost overruns that would follow in the wake of the yards' collapse. In the end Hydro paid the bill while Ulltveit-Moe slapped additional money on the table, using his shipping assets as collateral. Two years later the yards were sold to ABB for more than $100 million. That money has been invested in a diversified range of businesses, from Norway's largest pizza chain -- Peppes -- to a 58% stake in ship equipment retailer Unitor, an 11% stake in ship control and dynamic positioning system company Kongsberg and, of course, Ulltveit-Moe's 11% stake in PGS.