Vallianz to review IPT policy following SGX query on non-disclosures

CATALIST-LISTED Vallianz Holdings said on Monday that it would take measures to "comprehensively review" its interested person transactions (IPT) policy in its response to queries from the Singapore Exchange (SGX).

This was over certain advances and corporate guarantees it had extended to its subsidiaries and joint venture companies - namely Holmen Heavylift Offshore (HOL), Rawabi Vallianz International Company (RVIC), Rawabi Vallianz Offshore Services Company (RVOS) and Resolute Pte Ltd (RPL).

The offshore support vessel provider said that its move to review its IPT policy will aim to tighten measures to ensure that all future transactions will be analysed for possible IPTs prior to contract and for compliance with relevant regulatory disclosure requirements.

According to Vallianz in a July 24 announcement, the company had realised the non-disclosures and/or non-compliance of the IPTs, and that its sponsor had informed SGX of the matter. This was following sponsor queries regarding its 2019 annual report and clarifications provided.

"The non-disclosures and/or non-compliance are unintentional and resulted from inadvertent oversight by the company," it added at the time.

One of the subsidiaries, RVIC, is a 50:50 joint venture set up in December 2015 with Rawabi Holding Company (RHC). It had obtained bank facilities for vessel acquisitions and working capital purposes, of which RHC and Vallianz had given corporate guarantees in proportion to their shareholding interests.

In addition, subsidiary RVOS had extended a US$92.7 million advance to RVIC during fiscal 2019 to repay bank loans and for working capital. The advance was interest free and repayable on demand.

The provision of RVIC's corporate guarantee and the advance by RVOS was not viewed as prejudicial to the interests of the company and its minority shareholders by Vallianz's audit committee.

As at March 31, the company's share of RVIC's corporate guarantee or outstanding bank facilities stands at a total of US$222.9 million.

Vallianz had also provided corporate guarantees to RPL, HOL and RVOS.

RPL is 51 per cent owned by Vallianz and 49 per cent owned by Swiber Holdings Limited (SHL). Both had in June 2011 provided corporate guarantees for bank facilities obtained by RPL on a joint and several basis. The company's exposure of corporate guarantees provided to RPL as at March 31 is US$31.7 million.

HOL is a 75 per cent owned subsidiary of Vallianz, with the remaining 25 per cent owned by SHL. The company had provided 100 per cent of the corporate guarantee to HOL in relation to bank facilities which was extended to HOL. Vallianz also made principal repayment and interest payment on these bank facilities. This included SHL's 25 per cent share of these payments. The company's exposure to HOL's corporate guarantee stands at US$91.1 million as at March 31.

Meanwhile, RVOS is company which Vallianz and RHC each hold a 50 per cent stake in. Vallianz and RHC had in September 2018 and March 2019 provided corporate guarantees to RVOS in their respective shareholding for RVOS's bank facilities. Vallianz's exposure of the corporate guarantee provided to RVOS stood at US$36.5 million as at March 31.

This brings Vallianz's total exposure of corporate guarantees to S$159.3 million as at March 31.

Vallianz shares last traded at 12.3 Singapore cents on Friday, down 0.6 cent or 4.7 per cent.