SembCorp Snags Indian Shipyard
SembCorp Marine and Pipavav Shipyard and its promoters, SKIL Infrastructure have signed an investment agreement to subscribe to 17.5 million fully paid up equity shares in PSL at Rs 45 (Indian Rupees Forty five only) per share aggregating to Rs 787.5 million (Indian Rupees Seven hundred eighty seven and point five million) payable in cash of approximately S$29.12 million or 3.31 percentage share in PSL at placement price.
Located within the vicinity of Pipavav Port, Gujarat in India, PSL is strategically located on the west coast of India along the Middle East - Singapore sea route. The 85 hectares shipyard is poised to be one of the largest shipbuilding yards in India. The shipyard to-date has secured contacts worth a total of US$1 billion for the construction of 22 panamax-sized ships with options for an additional 4 vessels. Currently, the shipyard infrastructure is under development and construction and is scheduled for completion in September 2008. This comprised a 600-meter long VLCC drydock equipped with shipbuilding workshop facilities and equipment. The shipyard infrastructure is geared towards the building of large vessels up to VLCC size in the future.
On the rationale for the partnership with PSL and SKIL, Mr. Ng Thiam Poh, Senior Vice President, Corporate Development said "SembCorp Marine was invited by SKIL to be its strategic partner and subsequently entered into a Technical Assistance Agreement with PSL. SCM's role includes advising on the design of the shipyard, its layout and infrastructure, setting up of the management and technical systems and to provide training to PSL."
"With this investment, SembCorp Marine would be able to establish other business ventures in close collaboration with our Indian partners and to grow our marine and offshore business in India" added Mr. Ng.
The investment is not expected to have a material impact on SembCorp Marine's earnings per share and net tangible asset per share for the current financial year. It will be funded from SembCorp Marine's own internal resources.
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