Australian OSV operator and services provider MMA Offshore has struck a deal to sell its shipyard facility in Batam, Indonesia to Wasco Engineering Group.
Wasco is paying $15m for the shipyard facility MMA acquired in 2014. The purchase price will be paid in tranches, with the total amount payable on or before the completion date. The Perth-based firm said it would use the cash from the sale to strengthen its balance sheet.
The transaction is expected to complete by December 30, 2022. The Batam facility will remain subleased to Wasco for the period until completion, with rent structured to deescalate upon receipt of the tranche payments.
MMA’s managing director, David Ross, commented: “The sale of the Batam shipyard is an excellent outcome for the company and in line with our strategy to divest non-core assets. The consideration of $15m (A$20m) will materially reduce our net debt position, deleveraging our balance sheet and positioning the company well to take advantage of growth opportunities in an improving market.”
MMA will retain a portion of the Batam facility and have access to the wharf for a period of five years following the completion of the sale. According to MMA, the shipyard has delivered over 30 offshore vessels in the last 20 years. However, with the decline in newbuilding activity, the shipyard is now a laydown and project preparation facility for the company’s vessel activity in Southeast Asia and is also being used to support its clients’ varied onshore marine-related requirements.