The cash consideration for the purchase is US$5 million. This was arrived at on a willing buyer and willing seller basis taking into account the net assets of the company and existing contracts.
With the acquisition, FELS Setal will become a wholly owned subsidiary of Keppel O&M, and will be renamed Keppel FELS Brazil SA.
The sale by PEM Setal is due to PEM Setal's restructuring program for its group of companies.
Keppel O&M is a global leader in offshore rigs and ship conversion and repair as well as a specialized shipbuilder. Its subsidiary is the industry leader in Brazil and operates the best-equipped offshore yard in South America.
The book value and net asset value of the sale shares as at 31 Dec 2003 was US$1.74 million.
The transaction is not expected to have any material impact on the earnings per KCL share and net tangible assets per KCL share for the financial year 2005.
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