October 29, 2007
SembCorp Marine takes stake in Pipavav
Singapore's SembCorp Marine (SCM) has signed an agreement with India's Pipavav Shipyard Limited (PSL) and its promoters, SKIL Infrastructure Limited (SKIL) that will see it invest S$29.12 million (about US$20 million) for a 3.31 percentage share in PSL at placement price.
Located within the vicinity of Pipavav Port, Gujarat in India, PSL is strategically located on the west coast of India along the Middle East --Singapore sea route.
The 85 hectares shipyard is poised to be one of the largest shipbuilding yards in India. The shipyard to-date has secured contacts worth a total of US$1 billion for the construction of 22 panamax-sized ships with options for an additional 4 vessels. Currently, the shipyard infrastructure is under development and construction and is scheduled for completion in September 2008.
Facilities will include a 600 m long VLCC dry dock equipped with shipbuilding workshop facilities and equipment. The shipyard infrastructure is geared towards the building of large vessels up to VLCC size in the future.
A major investor in the yard is Punj Lloyd Ltd (PLL), with a 25% stake. It is one of the largest engineering construction companies in India.
On the rationale for the partnership with PSL and SKIL, SembCorp Marine's Mr. Ng Thiam Poh, Senior Vice President, Corporate Development said "SembCorp Marine was invited by SKIL to be its strategic partner and subsequently entered into a Technical Assistance Agreement with PSL. SCM's role includes advising on the design of the shipyard, its layout and infrastructure, setting up of the management and technical systems and to provide training to PSL."
"With this investment, SembCorp Marine would be able to establish other business ventures in close collaboration with our Indian partners and to grow our marine and offshore business in India" added Mr. Ng.
The investment is not expected to have a material impact on SembCorp Marine's earnings per share and net tangible asset per share for the current financial year.
It will be funded from SembCorp Marine's own internal resources.
SKIL Infrastructure Ltd (SKIL) , the holding company of SKIL Group, has successfully developed pioneering infrastructure projects, including the Port of Pipavav in joint venture with the Gujarat Government.