Vallianz in US$36.09m asset deals with parent firm

Singapore

TO further raise its profile as an offshore marine player, Vallianz Holdings has entered into two deals to acquire assets from its controlling shareholder Swiber Holdings for US$36.09 million.

Vallianz, a provider of offshore support vessels, is buying Newcruz International Pte Ltd (NIPL) for US$18.59 million and a 49 per cent stake in PT Swiber Berjaya (PTSB) for US$17.5 million.

NIPL is an investment holding company which owns Newcruz Shipbuilding & Engineering Pte Ltd (NSE), operator of a shipyard located at Tuas, Singapore. The yard spans an area of 3.6 hectares with a 220-metre water frontage.

The PTSB stake purchase is aimed at gaining entry into Indonesia's offshore support vessel (OSV) market. The remaining 51 per cent stake in PTSB will continue to be held by PTSB's Indonesian shareholder.

PTSB owns and charters OSVs to support the oil and gas exploration and production activities of oil majors and national oil companies in the Indonesian waters. It operates a young and diversified fleet of 18 OSVs and has plans to add another four vessels to its fleet. For the financial year ended Dec 31, 2013, PTSB recorded a net profit of US$3.4 million.

The acquisition is to be satisfied by a combination of perpetual securities and new Vallianz shares.

Vallianz will issue US$22.50 million worth of senior perpetual securities to Swiber. It will also issue 160 million Vallianz shares to the latter at 11 Singapore cents each, amounting to some US$13.59 million.

After the transaction, Swiber, which holds a 23.36 per cent stake in Vallianz, will become a 27.02 per cent shareholder.

Swiber expects to make a gain of about US$11 million from the asset disposals.

Swiber said while the assets to be sold complement its engineering, procurement, installation and construction (EPIC) services, they are not core.

"The proposed disposal represents an exit opportunity for the company to realise its investment in target group," Swiber said.

As for Vallianz, its chief executive officer, Darren Yeo said, the transaction is a major step forward for the group.

"The acquisition provides Vallianz with a platform to gain immediate access to the cabotage-protected OSV market in Indonesia, and will enable us to ride on the burgeoning prospects of the country's offshore oil and gas market. In addition to generating a new source of income, the acquisition will also increase the geographical diversity of the group's earnings base."

Vallianz last week posted a more than doubling in net profit to US$4.82 million for the third quarter ended Sept 30, 2014. Revenue was US$39.25 million, up from US$6.49 million a year ago.

It is looking to increase this base to 38 vessels by the end of 2014.

Vallianz closed trading on Monday at 9.7 Singapore cents, down 0.2 cent. Swiber eased one cent to 38.5 Singapore cents.