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December 31, 2003

SembCorp Marine sells stake in one Chinese yard

Singapore's SembCorp Marine Ltd today announced that its subsidiary, Sembawang Shipyard (S) Pte Ltd has disposed of its entire 50 percent share of the registered capital in China's Bohai Sembawang Shipyard (Tianjin) Co Ltd ("Bohai Sembawang Shipyard") to its joint venture partner, China Offshore Oil Bohai Corporation.

The sale consideration was S$25.3 million (about U.S. $14.8 million) and was determined based on the prevailing net tangible asset value. The payment would be in the form of cash and what the SembCorp Marine announcement described as "a mutually agreed fixed asset item." SembCorp says its gain from the divestment is S$1.9 million (about U.S. $1.1 million).

Located in Tanggu, Tianjin in the People's Republic of China, Bohai Sembawang Shipyard's principal activities include ship repairs and basic conversions.

SembCorp says the divestment of Bohai Sembawang Shipyard is due to the joint venture partner's internal restructuring. "In line with SembCorp Marine's hub strategy in China, this divestment would also allow SembCorp Marine to restructure its investment in China and to enhance its participation with COSCO in the growing ship repair market in China."

SembCorp Marine is a joint venture partner with COSCO in Dalian Cosco Marine Engineering which operates from a 35-hectare site located at Dalian, China's marine technology and industry hub. Equipped with three docks totaling 340,000 dwt and 1,582 meters berthing quays, Dalian Cosco Marine's main activities comprise ship repair (including tankers, bulk carriers and container vessels), ship conversion and offshore engineering. It will be interesting to see whether that "mutually agreed fixed asset item" from Bohai Sembawang now winds up in Dalian.

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