Vallianz Holdings Limited (Vallianz and together with its subsidiaries the Group), a fast growing provider of offshore support vessels and integrated marine solutions to the oil and gas industry, is proposing to acquire a 49 percent stake in PT Swiber Berjaya (PTSB) for $17.5 million (the Acquisition) to gain entry into Indonesia’s offshore support vessel (OSV) market.
The Group will be acquiring the 49 percent equity interest in PTSB from Swiber Holdings Limited (Swiber). The remaining 51 percent in PTSB will continue to be held by PTSB’s Indonesian shareholder. Upon completion of the Acquisition, Swiber will continue to benefit from PTSB through its direct shareholding of 23.36 percent in Vallianz.
Established in 1996, PTSB owns and charters OSVs to support the oil and gas exploration and production activities of oil majors and national oil companies in the Indonesian waters. It operates a young and diversified fleet of 18 OSVs comprising mainly Anchor Handling Tug vessels (AHT), Anchor Handling Tug Supply vessels (AHTS), Flat Top Barges (FT Barges) and Accommodation Work Barges (AWB). To address the demand for OSVs in the Indonesia market which is regulated by the cabotage law, PTSB plans to add another 4 vessels to its fleet.
CEO of Vallianz, Darren Yeo said, “This is a major step forward for the Group. PTSB is an established OSV operator with a strong track record. The Acquisition provides Vallianz with a platform to gain immediate access to the cabotage-protected OSV market in Indonesia, and will enable us to ride on the burgeoning prospects of the country’s offshore oil and gas market. In addition to generating a new source of income, the Acquisition will also increase the geographical diversity of the Group’s earnings base”.
Group CEO and President of Swiber, Francis Wong said, “This deal makes good business sense for all parties. With its management expertise and wide network in the global OSV markets, we are confident that Vallianz will provide the impetus for PTSB to build and strengthen its market position in Indonesia. As a major shareholder of Vallianz, Swiber stands to benefit from Vallianz’s and PTSB’s future growth. At the same time, Swiber can continue to offer its customers a complete and integrated suite of offshore construction and support services through its group of companies.”
The prospects of the Indonesian oil and gas sector remain vibrant. Capital expenditure in the sector is expected to rise 32.6 percent year-on-year to $25.6 billion in 2014, according to Indonesia’s oil and gas regulatory body, SKK Migas. Of this, oil and gas companies operating in Indonesia have set aside $5.3 billion to develop oil and gas fields, a 23.1 percent increase from last year, while exploration spending will increase by 104.6 percent to $3.84 billion.
The consideration for the Acquisition is to be satisfied by a combination of perpetual securities and new ordinary shares in the capital of Vallianz. It was arrived at on a willing seller and willing buyer basis, and after taking into consideration the assets, earnings, financial position, and business prospects of PTSB. For the financial year ended Dec. 31, 2013, PTSB recorded earnings before interest, tax, depreciation and amortization of $17.5 million and net profit after tax of $3.4 million.
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