OFFSHORE-RELATED Vallianz Holdings has agreed on Jan 24 to place 550 million new shares at S$0.043 each to two units of China's state-owned supplier of rail transit equipment for S$23.65 million.
The two units are CSR Zhuzhou Electric Locomotive Research Institute (Hong Kong) Co Limited and CRRC (Hong Kong) Co Limited - both of which are subsidiaries of CRRC Corporation (CRRC), which is listed in Hong Kong and Shanghai stock exchanges and has a market value of US$41.2 billion on Jan 22.
At S$0.043 each, the placement price is at a 4.6 per cent premium to the weighted average price of S$0.0411 for trades done on Jan 14, the last full trading day prior to trading halt and signing of the subscription agreement.
The new placement shares - which represents 16.1 per cent of Vallianz's existing issued share capital - will be subject to a moratorium period of one year from the date of completion of the placement. Vallianz's two major shareholders, Swiber Holdings and Rawabi Company Holding, have also undertaken to observe a similar moratorium period on their current stakes.
After the placement, CRRC will become a major shareholder of Vallianz, with a 13.9 per cent stake. Together with Swiber and Rawabi, the three will have a combined stake of 53.6 per cent.
Ling Yong Wah, CEO of Vallianz, said the group views CRRC as a strategic technology partner which can enhance its vessel operations.
"Given the scale and geographical reach of our vessel operations, Vallianz will be able to provide an ideal platform for CRRC to extend the applications of its technologies and products into the global offshore and marine market."
Mr Ling added that "by leveraging on CRRC's diesel electric technology, the group will be able to gradually move towards wider use of more environmentally-friendly vessels utilizing electric propulsion systems. This will help to raise our vessels' fuel efficiency and yield cost savings for customers".
Jiang Yi, deputy general manager of CRRC Zhuzhou Electric Locomotive Research Institute, said Vallianz will be able to help CRRC realise its plans to expand into the offshore and marine sector.
"Vallianz is an established owner and operator of offshore support vessels with a wide geographical reach as it serves national and international oil companies in Asia Pacific, Middle East and Latin America. Together with its track record, in-house shipbuilding and design capabilities, we are confident that Vallianz can pave the way for CRRC to penetrate a new customer segment and showcase our offshore and marine technologies to the world."
Vallianz plans to use the net proceeds of S$22.90 million from the proposed placement, which is subject to the completion of due diligence among others, for general working capital needs.