Nam Cheong to acquire stake in RI shipping firm, sells three vessels

By Romel S. Gurky

SGX-listed Nam Cheong Limited, a global offshore marine player, which builds offshore support vessels (OSV), announced Monday that it has entered into a binding Heads Of Agreement (HOA) with Marco Polo Marine Limited (MPML) in relation to a proposed investment in MPML?s indirect subsidiary, IDX-listed shipping firm PT Pelayaran Nasional Bina Buana Raya Tbk (BBR).

This is the second significant initiative undertaken by Nam Cheong to further extend its interests in the attractive Indonesian oil and gas market, following the forming of a joint venture in Indonesia in September 2013 to own, operate and charter marine vessels, the company said in a statement.

MPML is an SGX mainboard listed integrated marine logistic company, principally engaged in the business of ship chartering and shipyard services while BBR is an indirect subsidiary of MPML in which MPML holds a 49.6 percent deemed interest. BBR is a reputable shipping company based in Indonesia and listed on the Bursa Efek Indonesia (IDX), primarily engaged in the business of ship owning and chartering through its two divisions of tugs and barges division, and offshore marine division.

Under the HOA, Nam Cheong has agreed to subscribe up to 1.6 billion new shares in BBR?s rights issue, at an issue price of Rp 230 per share, which was determined on a ?willing-buyer, willing-seller basis?. Upon the completion of the rights issue, the group may hold up to approximately 30 percent of the enlarged share capital of BBR, for a total consideration of approximately US$30.7 million (approximately S$39.0 million 1), funded through the group?s internal resources, the statement explained.

Leong Seng Keat, Nam Cheong?s Chief Executive Officer said: ?It is our plan to develop strategic partnerships with regional players to strengthen our position in cabotage-protected countries. Investing in BBR provides us with the platform to gain a foothold in the cabotage-protected Indonesia market given BBR?s extensive network and strong presence in the country.?

With the proposed investment of $30.7 million (approximately S$39.0 million 1), BBR will utilize part of the proceeds to purchase five small- and mid-sized OSVs, which are appropriate for plying Indonesian waters, from Nam Cheong for $85.0 million, Nam Cheong said.

Leong added: ?The investment serves not only to increase our vessel sales but also lays the groundwork for potential future vessel purchases by BBR from the group.

Elsewhere, Nam Cheong said in a separate press statement Monday that it has sold three vessels worth approximately US$41.0 million (aboutS$52.1 million).

These three contract wins are on the back of five vessel sales to BBR, secured during the same month, bringing the total orders in September 2014 to eight which are collectively worth approximately US$126.0 million, the company said.

Nam Cheong said one 5,150 bhp Anchor Handling Towing Supply Vessel (AHTS) was sold to a Norway-based repeat customer, Vega Offshore Group, which is in-line with the customer?s fleet expansion plan.

In addition, orders for two 6,500 bhp AHTS vessels were also secured from repeat customers of which one is based in Asia and the other, from Vroon B.V. which is based in the Netherlands.

Editing by Reiner Simanjuntak