VIKING Offshore and Marine is going into the rig building and chartering business.
It announced today that it's paying US$5.4 million (S$6.7 million) to acquire a 30 per cent stake in Smart Earl Investment (SEI), which has the rights to construct a jack-up rig.
SEI is an investment vehicle that belongs to Labroy Marine co-founder Chan Kwan Bian.
The jack-up rig, expected to be built at a cost of US$180 million (S$223.8 million), is designed for use at a water depth of up to 375 feet.
It will be built by a state-owned Chinese yard, China Merchant Heavy Industries, and is expected to be completed within 26 months.
Viking said in a statement that it initiated the move into the mainstream offshore and marine business to "participate in the fast-growing rig building and rig charter market."
It is currently in the business of providing services to the offshore and marine industry, including solutions for heating, ventilation and deck machinery.
The deal is subject to shareholders' approval.
Separately, another co-founder of Labroy Marine, Mr Tan Boy Tee, is taking a stake in Viking.
He's buying 40 million new Viking shares worth $3.2 million and will become a substantial shareholder of Viking.
Mr Tan also has the option of subscribing for another 40 million new shares for $3.2 million.