Sembcorp Marine has landed the remaining 15 per cent stake it did not own in PPL Shipyard for US$115 million (S$155 million).
The company had fought tooth and nail to get this stake in 2010, including going to the courts, after Baker Technology sold the stake to a group led by China-based rig- building rival Yangzijiang Shipbuilding for US$155 million.
SembMarine claimed then that it had the right to buy the stake before the Chinese rival.
PPL Shipyard, an 85 per cent subsidiary of SembMarine, designs, constructs and repairs oil rigs and ships. SembMarine said last night that it is buying the stake from PPL Holdings and its unit, E-Interface Holdings.
After the deal goes through, PPL Shipyard will become a wholly owned subsidiary of SembMarine.
From 2001 until last year, PPL Shipyard made cumulative profits of over $1.6 billion. In the same period, cumulative cash dividends received by SembMarine from PPL Shipyard came to about $540 million.
SembMarine said in a statement: "Over the years, the investment in PPL Shipyard has helped propel the company to be a global player in the design and construction of jack-up and semi-submersible rigs."
BECOMING A GLOBAL PLAYER
Over the years, the investment in PPL Shipyard has helped propel the company to be a global player in the design and construction of jack-up and semi-submersible rigs.
SembMarine said it had taken a positive view on the long-term potential of PPL Shipyard and the offshore rigs sector in 2001 and made an initial 50 per cent investment in the company.
In 2003, SembMarine increased its stake to 85 per cent and agreed on the terms for the sale of the 15 per cent stake in PPL Shipyard held by PPL Holdings and E-Interface Holdings. It deemed that the selling price would be based primarily on the net tangible assets of the company at the point of sale.
The net tangible asset value of the PPL Shipyard sale shares was about US$113.15 million as of June 30.
Including this latest acquisition, the total purchase consideration for SembMarine's 100 per cent investment in PPL Shipyard is about $186 million.
In a separate statement, Yangzijiang Shipbuilding, which is listed on the Singapore Exchange and owns a 45 per cent interest in PPL Holdings, said the consideration amount it will get from the sale is US$51.8 million. Yangzijiang said it intends to apply the net proceeds towards its working capital.