POSH to acquire SMM's stake in harbour services JV for US$679,000

MAINBOARD-LISTED PACC Offshore Services Holdings (POSH) has agreed to acquire the 50 per cent stake held by Sembcorp Marine (SMM) in harbour services provider Pacific Workboats Pte Ltd (PWPL) for over US$679,400 in cash.

PWPL is currently a 50:50 joint venture between POSH and Dolphin Shipping Co, a unit of SMM. Post-acquisition, POSH will continue to offer harbour services in Singapore independently while redeploying select assets from PWPL for longer-term charters overseas.

For the acquisition to proceed, PWPL will first have to distribute US$34 million worth of dividends each to POSH and Dolphin, primarily in the form of vessels. Assuming the distribution was done in end-June, the 50 per cent stake in PWPL would have an adjusted book value of US$877,000. Otherwise, the 50 per cent stake had a US$34.9 million book value as at end-June. 

This decision to acquire the rest of PWPL is aligned with POSH's ongoing comprehensive review, the company said in a press statement on Wednesday. 

POSH chief executive Lee Keng Lin said: "The prospects for the harbour services sector remain attractive, and we look forward to this next chapter and will work to grow our business both in Singapore and abroad. This decision on PWPL marks another proactive step forward in our comprehensive business review, as we continue to sharpen our strategy and be better positioned for our next phase of growth."

In a separate bourse filing, SMM said that it is divesting its stake in PWPL as part of its plan to renew and operate its tugboat fleet based on its own LNG-hybrid tug designs. 

Both POSH and SMM do not expect the transaction to have a material impact on their earnings or net tangible assets for the financial year ended December. 

Shares of POSH closed at S$0.098 on Wednesday, down 0.1 cent. Shares of SMM fell one cent to close at S$1.19.