November 27, 2007
SembCorp Marine in Saudi shipyard venture
Singapore's SembCorp Marine Ltd is in a joint venture to set up and operate a new yard at the Yanbu Commercial Port in Saudi Arabia.
Sembcorp Marine and its joint venture partner Nasser Mohammed Al-Mukairish and Partners Company (Al Mukairish) have agreed to form SembMarine (Middle East) Pte Ltd ("SMME").
SMME will be a founding shareholder in a Saudi Arabian joint stock company named Floating Dock for Shipbuilding and Ship Repair Company ("FDSCO") which will build, own and operate the new shipyard over a 30-year term.
The 21 hectares FDSCO Yard will be constructed on Al Jazeera Island which is a part of the Yanbu Commercial Port, facing the Red Sea. It is in a strategic ship repair location, particularly for ships operating in the Red Sea and accessing the Mediterranean Sea via the Suez Canal. The FDSCO Yard will offer a wide range of shipbuilding, ship repairing, marine engineering facilities and services to the regional heavy industry.
Fully operational by 2009, the FDSCO Yard will have a shiplift system for new building and repair of vessels up to Handymax size and a floating dock for repair of vessels up to Suezmax size. Other associated facilities will include ship construction halls, wet and dry berths, final outfitting and commissioning quay, supporting infrastructures and services as well as training facilities.
SCM will invest US$6.6 million in cash in SMME through a subscription for 60 percent of SMME, and subscribing to 6.6 million fully paid equity shares in SMME at US$1 each. Al Mukairish will subscribe the balance of 40 percentage through a US$4.4 million investment.
SMME will retain US$1 million as working capital and will invest US$10 million into FDSCO for a 2.5 percent equity stake. In addition, SCM and Al Mukairish may provide SMME with shareholders' advances of between US$10 million to US$30 million at a later stage to acquire an additional 2.5 percent to 7.5 percent equity stake in FDSCO over and above the initial 2.5 percent stake. SCM also has an option to acquire up to 80 percent shareholding of SMME within a three-year period from the date of incorporation.
SembCorp Marine's Mr. Ng Thiam Poh, Senior VP, Corporate Development said "We are honored to be chosen by Al Mukairish to be its strategic partner in the development and operations of FDSCO Yard in Yanbu, Saudi Arabia. Through SMME, SCM will invest in and provide technical and management services to FDSCO. SMME will also provide opportunities for SCM to grow its marine, oil and gas business in the Middle East."
Mr Saleh Al Mukairish, the CEO and main shareholder of Nasser Mohammed Al-Mukairish and Partners Company said "We are grateful for the friendship that SembCorp Marine has shown us and we are excited for this opportunity for SembCorp Marine to bring their world-class skills and experience as our distinguished partner to develop the strategic FDSCO Project for the benefit of the Kingdom of Saudi Arabia. In this regard, I am confident that the FDSCO Project will be a mutually beneficial and successful one."
Nasser Mohammed Al-Mukairish and Partners Company (Al Mukairish) Al Mukairish is a Saudi Arabian company owned by Saleh Mohammed Al-Mukairish and his brother Nasser Mohammed Al-Mukairish. Its main business is real estate trading and real estate and infrastructure development projects. It has concluded several major projects in the city of Jeddah and in Sudan.