Malaysian OSV operator and builder Nam Cheong reckons the worst is over for the hard hit offshore sector and that it should pull through its restructuring, the most severe test it has faced since the company was founded 50 years ago. Nam Cheong chairman Datuk Tiong Su Kouk conveyed these thoughts yesterday in a letter to shareholders.
Nam Cheong sought restructuring in April last year following a host of other troubled Southeast Asian offshore entities.
The company has managed to obtain waivers on a substantial portion of liabilities previously owed to trade creditors amounting to RM557.5m ($134.5m). In addition, the company’s liabilities are expected to further reduce by over RM500m.
The net proceeds from a proposed fund-raising exercise will be used mainly for working capital and partially for the cash payment to creditors.
The Nam Cheong chairman said the company has been making efforts to expand its vessel chartering segment by getting idle assets back into business and setting up its own fully-fledged chartering operation.
“With these strategies in place, we believe that we will emerge from this protracted industry cycle stronger, as we look ahead towards longer-term prospects for this segment,” Tiong maintained.
According to VesselsValue, Nam Cheong currently operates a fleet 28 OSVs with another 45 newbuildings on order.