ST Engineering picks up rig repair assets in the US for US$25 million

SINGAPORE Technologies Engineering's (ST Engineering) subsidiary, Vision Technologies Marine, Inc (VT Marine), has acquired selected rig repair assets adjacent to ST Engineering's existing yard VT Halter Marine, Inc (VT Halter Marine), in Pascagoula, Mississippi, in the US for US$25 million. These assets of World Marine of Mississippi LLC (WMM) comprise a purpose-built facility of 94 acres for heavy marine fabrication, and offshore oil and gas rig upgrades, repairs and conversions.

ST Engineering said that since the downturn of the offshore and marine industry, the group has been looking to acquire assets that represent long-term value and could enhance its capabilities while offering scale advantages in the marine repair segment. The acquired assets, which are situated in a prime location in the Gulf of Mexico and with close proximity to VT Halter Marine's Pascagoula yard, enable it to leverage resources and derive greater synergies in its ship repair business, the company said.

The purchase consideration was funded internally and was satisfied fully in cash at closing, and was arrived at, after arm's length negotiations between the parties, taking into account asset values, current financial performance and future growth prospects. The unaudited net book value of the fixed assets of WMM as at Dec 31, 2016 was about US$14 million. The company added that the acquisition was not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of ST Engineering for the current financial year.