Singapore: One of the best known names in the Singapore shipyard scene has made a big comeback today.
Tan Boy Tee, who sold his co-founded Labroy Marine to Dubai Drydocks World, nearly six years ago, is buying into Viking Offshore and Marine, in the process advancing the yard’s range of products.
Viking is selling Tan 40m new shares worth S$3.2m with an option for the same quantity and amount to be exercised in the next 90 days, which would give him a 10.1% stake in the company.
Andy Lim, the chairman of Viking, said, “We are glad to have the support of Mr Tan Boy Tee as we venture into the fast-growing rig building and rig charter market. His international reputation, track record, corporate experience and strategic connections, particularly in the offshore and marine industry, will help Viking capture significant new opportunities.”
Viking also announced today that it will venture into the mainstream offshore rig-building and rig charter market by partnering Singaporean rig building veteran Chan Kwan Bian to construct a drilling jack-up rig at a cost of approximately US$180m. The rig is a cantilever drilling jack-up CJ46-X100-D GustoMSC designed for use in waterdepth up to 375ft and can accommodate 120 men during operation.
SGX Catalist-listed Viking said its newly setup investment holding subsidiary Viking Asset Management (VAM) has entered into a conditional sales and purchase agreement to acquire a 30%-stake, valued at $5.4m, in Smart Earl Investment, an investment vehicle belonging to Chan, that has the rights to build the jack-up rig.
Chan is a renowned industry veteran within the offshore and marine industry with extensive experiences in the rig and shipbuilding space. He was also a co-founder of Labroy Marine.
The drilling rig will be built by China Merchant Heavy Industries in Shenzhen.
Daniel Lin, executive director of Viking and son of Andy Lim, chairman and controlling shareholder of Viking, has been appointed ceo of VAM.
Lin commented, “Viking has been offered an exceptional opportunity to participate in the fast growing rig building and rig charter market with an attractive proposition. The contractual terms extended to SEI and Viking give us the opportunity to build and co-own a jack-up rig without straining our cashflow and funding ability. Through this investment, Viking has initiated its move into the mainstream offshore and marine business, in line with the asset-based strategic growth initiative it had planned for. This foray into the offshore rig market is timely to capitalize on the market view that jack-up rigs of this capacity are expected to see demand outstripping supply in the next few years.”
The contract to build the jack-up rig is expected to complete within 26 months. The joint venture intends to resell or charter the rig to prospective Viking customers in the Southeast Asia region. [04/11/13]