Cargotec Proceeds with MacGregor Sale as Offshore Wind Dispute Gets Resolved
Cargotec has decided to proceed with the sale of MacGregor, its offshore wind solutions business, after settling a dispute with a customer related to a monopile installation vessel project.
The dispute, which was announced in Cargotec’s interim report for January-March 2024, has been resolved, with MacGregor agreeing to pay approximately $27 million to settle the issue. The costs will be reported as items affecting comparability, as they are related to a one-off pilot project and the product is no longer in MacGregor’s sales portfolio.
MacGregor’s core businesses, including merchant and services, are performing well, while its offshore business has been unsatisfactory. The traditional offshore solutions business has performed well and has been profitable, but projects related to two new offshore wind solutions have caused losses due to their pilot nature and technical challenges.
As a result, MacGregor has decided to stop offering the monopile installation solution, and it is no longer in MacGregor’s sales portfolio. Another offshore wind solution, containing advanced technologies for the servicing of offshore wind turbines, is still part of MacGregor’s offering.
There are approximately ten smaller loss-making offshore pilot projects to be finalized mainly in 2024. MacGregor will not commit to any new pilot projects until all technical challenges are solved.
Offshore wind turbines
These actions are the final stage of the restructuring program to turn around the offshore business. Offshore wind projects represent less than half of MacGregor’s offshore equipment-related order book, which amounted to $94.3 million at the end of the first quarter 2024.
“It is an important milestone for us to reach a settlement with the customer related to the monopile installation vessel project. Our solution is technically advanced, but we were unable to reach agreement between the companies on the way forward in the lengthy project. Having the dispute resolved means that we are in an even stronger position than before to further build on our profitability journey,” said Leif Byström, President, MacGregor.
Leif Byström, President, MacGregor
Cargotec’s Board of Directors decided in November 2022 that MacGregor would not be part of Cargotec’s portfolio in the future. However, from a value creation perspective, the timing for divesting the business was not ideal. Since then, MacGregor’s performance and market conditions have improved, and with the dispute now being settled, Cargotec has decided to proceed with the sale process of MacGregor.
