SembCorp Acquires 50% Stake in PPL Shipyard
SembCorp Marine has signed a Sale and Purchase Agreement with PPL Holdings Pte Ltd to acquire a 50 percent equity stake comprising 10,000,000 shares of $1.00 each in PPL Shipyard Pte Ltd (PPLS) for $16,000,000.
The purchase consideration, which was arrived at after taking into consideration the net asset value of PPLS, would be fully paid using SembCorp Marine's internal funds.
PPLS' business is primarily in oil rig and vessel construction as well as steel fabrication. It has recently secured a contract for the construction of two jack-up drilling rigs, each having a value of US$125 million, from Santa Fe International Corporation with a construction period of 24 months for each rig. There are also options for four additional jack-up drilling rigs to be built for Santa Fe International Corporation. Last year, PPLS delivered a semi-submersible drilling rig named "Cajun Express" to US offshore drilling company, Transocean Sedco Forex Inc.
The Sale and Purchase Agreement was signed by Mr Tan Kwi Kin, president of SembCorp Marine and Dr Benety Chang, PPLS' chairman.
Said Mr Tan: "PPLS has established a strong track record in rig buildings and our acquisition will give us a foothold in this business. Furthermore, rig building has a strategic fit with our core businesses of ship repair, shipbuilding, ship conversion and offshore engineering."
Dr Chang added: "We are proud to be part of SembCorp Marine. This strategic alliance will enable us to grow further."
This acquisition is not expected to have a material impact on the earnings and the net tangible assets per share of SembCorp Marine. None of the Directors or substantial shareholders have any interest, direct or indirect, in the acquisition.
PPLS was incorporated in Singapore in November 1997. Located on the West Coast of Singapore, the shipyard has a land area of 141,791 square meters with a water frontage of 700 meters and a water depth of 6.5 meters.