Viking Joins SEI in Construction of a $180M Jackup at CMHI Yard in China
Singapore's Viking Offshore & Marine Limited (Viking or the Group) announced Monday that it will venture into the mainstream offshore rig-building and rig charter market by partnering Singaporean rig building veteran Chan Kwan Bian (Chan) to construct a jackup at a cost of approximately $180 million. The cantilever CJ46-X100-D GustoMSC designed jackup is for use in water depth up to 375 feet and can accommodate 120 men during operation.
Singapore Exchange (SGX) Catalist-listed Viking said its newly setup investment holding subsidiary Viking Asset Management Pte Ltd (VAM) has entered into a conditional Sales and Purchase Agreement to acquire a 30 percent-stake, valued at $5.4 million, in Smart Earl Investment Pte Ltd (SEI), an investment vehicle belonging to Chan, that has the rights to build the jackup.
The purchase consideration will be satisfied in cash and will be funded partly through the cash proceeds from the rights-cum-warrants issue completed in May 2013.
Chan is a renowned industry veteran within the offshore and marine industry with extensive experiences in the rig and shipbuilding space. He was also a co-founder of Labroy Marine Ltd, a then-SGX listed offshore and marine specialist which was sold to Dubai Drydocks World LLC for $1.6 billion (SGD 2.4 billion) in January 2008.
The drilling rig will be built by China Merchant Heavy Industries (Shenzhen/Jiangsu) Co Ltd (CMHI), a state-owned Chinese yard with extensive experience in offshore rig building, and which, is one of the best offshore yards in the world.
Daniel Lin, executive director of Viking and son of Andy Lim, chairman and controlling shareholder of Viking, has been appointed the CEO of VAM, responsible for the success of this partnership. Daniel Lin commented, “Viking has been offered an exceptional opportunity to participate in the fast growing rig building and rig charter market with an attractive proposition. The contractual terms extended to SEI and Viking give us the opportunity to build and co-own a jackup without straining our cashflow and funding ability.
Daniel Lin added that, “Through this investment, Viking has initiated its move into the mainstream offshore and marine business, in line with the asset-based strategic growth initiative it had planned for. This foray into the offshore rig market is timely to capitalize on the market view that jackups of this capacity are expected to see demand outstripping supply in the next few years.”
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