Otto Marine strengthens balance sheet with sale and leaseback of vessel at US$100 million

Mainboard-listed Otto Marine, which owns and operates more than 60 offshore support vessels globally, and also engaged in specialized shipbuilding, repair and conversion of offshore support vessels, announced on Monday that its shipyard division has sold an anchor handling tug supply vessel (AHTS) to an unrelated third party for US$100 million (S$132.34 million).

The vessel, which is the fourth and final of the company's VS491 series, is currently under construction at Otto Marine's shipyard in Batam, Indonesia, and is expected to be completed in the second quarter of 2015.

Otto Marine subsidiary GO Offshore (L) Pte Ltd will charter the vessel for 8 years upon its completion.

The company said the transaction is expected to make a positive contribution to the consolidated net tangible assets per share and earnings per share of the group for the financial year ending December 31, 2014.

Said Mr Michael See, group executive director:

"While the OSV (offshore support vessel) market turned increasingly competitive given the recent regional developments and the instability of oil prices, the sale of the AHTS vessel and recent delivery of a subsea IMR vessel, once again, demonstrates our shipyard capability in shipbuilding and conversion of larger and complex OSVs, as well as our reputation among customers."

"In addition to the sale and leaseback of the AHTS and the recently delivered Subsea and IMR (Inspection, Maintenance and Repair) vessel currently deployed in Australia, the group will be delivering four AHTS vessels to a renowned unrelated third party Indonesia customer in the next two months."

The group's net order book stood at approximately US$500million at 30 September 2014.