Vallianz's Subsidiary to Acquire Shipyard in Batam, Indonesia for $15.6M

Vallianz Holdings Limited (Vallianz or the Group), a fast growing provider of offshore support vessels and integrated marine solutions to the oil and gas industry, announced Monday that its wholly-owned subsidiary Vallianz Shipbuilding & Engineering Pte. Ltd. (VSE) has entered into a conditional sales and purchase agreement (SPA) to acquire a shipyard facility in Batam, Indonesia for $15.6 million (SGD 19.8 million) (Consideration) to establish its own marine base.

Pursuant to the SPA, VSE will acquire the entire share capital of Singapore-incorporated Jetlee Shipbuilding & Engineering Pte Ltd (Jetlee) and its 99 percent owned Indonesian entity PT United Sindo Perkasa (PTUSP and together with Jetlee, the Jetlee Group) (the Acquisition). PTUSP owns a fabrication and engineering shipyard located at Kabil, Nongsa, Batam City, Kepulauan Riau Province, Indonesia (Marine Base). The Marine Base occupies a land area of about 21.7 acres (8.8 hectares) with a water front of about 1,279 feet (390 meters) in length.

The Consideration shall be satisfied by the issue of approximately 143.3 million ordinary shares in the capital of Vallianz (Consideration Shares) at an issue price per Consideration Share of $0.1088 or SGD 0.138 (Issue Price). The Issue Price represents a significant premium of 24 percent to Vallianz’s volume weighted average price of $0.088 (SGD 0.1116) per share Sept. 19. The Consideration was arrived at on a willing seller and willing buyer basis after taking into account existing assets, valuation of the Marine Base and financial position of Jetlee Group.

CEO of Vallianz, Darren Yeo said, “With direct ownership in a shipyard facility, Vallianz will have its own marine base to dock and carry out maintenance operations for our vessels and third-party vessels that are managed by the Group. As we continue with our fleet expansion program, we expect to reap greater cost savings and operating efficiencies from having our own marine base as compared to leasing third-party shipyards.”

Yeo added, “The shareholders of Jetlee are industry veterans with decades of experience in the marine sector. They will be allotted new shares in Vallianz that are priced at $0.1088 (SGD 0.138) per share, which is a significant premium to the current share price. This clearly underscores their confidence in the Group’s business and growth prospects.”

The shareholders of Jetlee Group include Ng Chee Keong, Chan Kwan Bian and Teo Guo Ping, who have a combined stake of 90 percent in Jetlee. Ng Chee Keong, who founded Jetlee in 1992 as a joint venture with Pan-United Marine Limited, is experienced in the marine and engineering field. Chan Kwan Bian is an industry veteran in the marine and offshore sector and was a co-founder of Labroy Marine Ltd. which was formerly listed on the SGX-ST and subsequently sold to Dubai Drydocks World LLC in 2008 for $1.7 billion. Teo Guo Ping, who was with Pan-United Corporation Limited prior to joining Jetlee in 2002, has over 20 years of experience in the shipbuilding industry.

The Acquisition is subject to the fulfillment of several conditions including approval for the allotment and issue of the Consideration Shares, and receipt of licenses or permissions that are deemed necessary in respect of the Acquisition.