Vallianz extends charter duration for half its vessels in new contracts worth up to US$458m

Mr Ling Yong Wah, CEO of Vallianz Holdings.
Mr Ling Yong Wah, CEO of Vallianz Holdings. PHOTO: VALLIANZ HOLDINGS

SINGAPORE - Catalist-listed Vallianz Holdings said Monday that it has signed new contracts worth up to US$458 million (S$628 million) that involve lengthening the charter duration of 19 of its offshore support vessels (OSV) with an existing customer in the Middle East.

"While charter rates for our vessels in the new contracts have been revised lower by about 10 per cent on average, the adjustment is less than the rate cuts seen in the offshore marine industry," Vallianz chief executive officer Ling Yong Wah said in a statement

"More importantly, it has enabled the group to lengthen the charter duration for half of our fleet of owned vessels to year 2020 including options," he said.

"This further strengthens our relationship with the customer, and also reflects our focus on maintaining a resilient business model for the Group to ride through business cycles," he added.

Currently, the 19 vessels support the offshore oil and gas operations of the customer, which is one of the world's largest national oil companies (NOC).

The 15 anchor handling tug supply vessels and four platform supply vessels will continue to be deployed to the customer until June 2018, with an option to extend for two more years until June 2020.

Vallianz said it is also working to strengthen its position with the NOC customer and has successfully offered it a wider range of value-added, specialised solutions. In December 2014, Vallianz was awarded a US$97 million time charter to supply a customized offshore floating storage and supply vessel to the NOC for up to 5 years. Earlier this month, the Group secured a time charter worth up to US$300 million to supply two self-elevating platforms to support the NOC's offshore oil production activities for up to 7 years.

With the new contracts secured in July this year, Vallianz's order book now stands at record US$968 million.

Mr Ling said this "reflects the group's ability to overcome the prevailing industry headwinds. Our order book comprises mainly of long term charters that now stretch up to 2022, thereby improving visibility and stability of the group's future revenue streams."